Danny Cullenward and Shelley Welton published a paper forthcoming in the Yale Journal on Regulation Bulletin (Sept. 2018) discussing recent actions by FERC and implications for state energy and climate policies. A digital preprint is now available.
Managing the excess supply of allowances in California’s cap-and-trade program is arguably the most important question affecting the design of ARB’s post-2020 market
California’s “self-correcting” cap-and-trade auction mechanism does not eliminate market overallocation
ARB staff have suggested that California’s “self-correcting” cap-and-trade auction mechanism will address overallocation. Our calculations show this “self-correction” mechanism will eliminate only a fraction of the overallocation expected by 2020.
The California Air Resources Board’s report on allowance overallocation in the cap-and-trade program does not address whether overallocation will cause the state to exceed its 2030 climate target—and also makes a fundamental methodological error that undermines the Report’s own conclusions.
At a workshop earlier this month, ARB released its initial thinking on how to implement the post-2020 market design reforms required by AB 398. We comment on ARB’s overall market design proposal and proposed interpretation of AB 398 offsets limits.
At a workshop earlier this month, ARB released its initial thinking on how to implement the post-2020 market design reforms required by AB 398. We comment on ARB’s proposal and offer conceptual suggestions regarding market design and oversupply, with a goal of informing constructive discussion on these issues.
The California Air Resources Board has released its initial thinking on how to incorporate new limits on the use of carbon offsets in its post-2020 cap-and-trade market design, as required by AB 398. We review two key issues here.
The auction resulted in carbon prices near the price floor, with the outcome indicating that the bank of extra allowances held in private accounts continues to grow
Comment on CAISO’s Second Revised Draft Final Proposal for regional greenhouse gas accounting in the Electricity Imbalance Market.
Two prominent economists, Severin Borenstein and Jim Bushnell, have argued that proposals to eliminate oversupply in California’s cap-and-trade market would not have much effect—a conclusion we critique in this research note.