The California Air Resources Board just released the results of its second auction of GHG allowances. While the auction for vintage 2013 allowances was still healthy, with all allowances sold at $13.62/allowance, the future auction, for vintage 2016 allowances, did not fare so well. Fewer than half the allowances sold, and the clearing price was CARB’s reserve price of $10.71/allowance.
Why the disparity? It’s significantly above any reasonable discount rate. … More