High volume, low prices mark California’s first carbon allowance auction

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California’s first carbon allowance auction on 14 November 2012 featured plenty of demand but a lower-than-expected closing price, based on results released on Monday by the California Air Resources Board (CARB). California’s cap-and-trade program requires that certain regulated entities must acquire a carbon allowance for each metric ton of greenhouse gas they emit in the state beginning in 2013.1 CARB put up for auction 10% of the allowances issued for the first (2013-14) and second (2015-17) compliance periods at a minimum price of $10 per allowance. Approximately 75 entities submitted bids.

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