California's Carbon Market Reaches an Inflection Point (economist.com) 44
California's carbon allowance auction results released May 29th revealed prices had hit rock bottom, signaling weak corporate demand and casting doubt over the future of the nation's fourth-largest carbon market. Companies that typically purchase quarterly credits to cover their greenhouse gas emissions are skipping auctions while waiting to see whether the cap-and-trade program will survive beyond its current 2030 expiration date.
The poor auction performance compounds California's existing $12 billion budget deficit, as the state relies on carbon credit revenues to fund climate programs. Governor Gavin Newsom is pushing to reauthorize the program through the annual budget bill, which must pass by mid-June, but lawmakers are debating fundamental changes to pricing mechanisms and spending priorities.
The uncertainty extends beyond California's borders, with Washington state exploring whether to link its carbon market to California's system and Oregon lawmakers reviving their own cap-and-trade legislation.
The poor auction performance compounds California's existing $12 billion budget deficit, as the state relies on carbon credit revenues to fund climate programs. Governor Gavin Newsom is pushing to reauthorize the program through the annual budget bill, which must pass by mid-June, but lawmakers are debating fundamental changes to pricing mechanisms and spending priorities.
The uncertainty extends beyond California's borders, with Washington state exploring whether to link its carbon market to California's system and Oregon lawmakers reviving their own cap-and-trade legislation.
Free Carbon Credit (Score:2)
‘Market’? (Score:5, Interesting)
Seriously though, why would anyone buy these credits? They are not helping the planet, and the only people who are benefiting are the apocalypse-peddling green scammers who have done little if anything to improve the quality of our environment.
Re: (Score:3)
how do you suggest reducing CO2 emissions if it's not by a market solution such as cap and trade, or a carbon tax? "Subsidize and ban" is much less effective.
Re: ‘Market’? (Score:3)
Unless it's done at a global level or enforced carbon emission based tariffs, a market solution is only going to move the problem outside of California.
Re: (Score:2, Troll)
Hi; it seems like you completely fail to understand how the atmosphere works.
Let me ask you this; Do you feel it's okay for someone to piss in a public swimming pool, just because there is already definitely some amount of piss in it?
Any reduction is a reduction. You're just upset that you might have to be the responsible one and be inconvenienced by getting out of the pool before relieving yourself.
=Smidge=
Re: ‘Market’? (Score:2)
If you only stop people from pissing in the shallow end, they're only going to relieve their bladders in the deep end, and in the end, you have just as much urine in the pool. You either need to control the entire pool (global) or you need to make it very expensive to swim for people who piss in the pool at all.
Re: (Score:1)
Okay so, for the record, you are perfectly okay with pissing in the pool as long as you're not the only one.
Glad we could set that straight, along with verifying that you do not understand how the atmosphere works.
=Smidge=
Re: ‘Market’? (Score:2)
Okay so, for the record, you are perfectly okay with pissing in the pool as long as you're not the only one.
Contrary to popular belief, nobody was ever hurt by peeing in the pool. What do you think divers do when we have to pee while wearing a wetsuit? Easy: We just pee in the wetsuit. Your dive buddy won't care, and he probably did the same thing two minutes before you did while you were swimming right behind him in an unseen trail of urine. And a seal probably let out four times as much in that very spot five minutes before that for you both to later swim in.
If you're really that skittish, you should be far mor
Re: (Score:2)
I think you're missing the point of the analogy...
We are forced to share the atmosphere. Any reduction in pollution is better than no reduction at all (even if it's still a net increase, because it didn't increase as much as it could have) and it does not matter where those emissions come from. Do you agree or disagree with this? Because if you agree, then the argument "Why should we do anything to reduce our emissions when 'they' are producing emissions too" is complete nonsense.
Sure, there's always going
Re: ‘Market’? (Score:2)
That's not what's going on. What's going on is you're paying someone on one end of the pool not to piss in the pool so you can go piss in some other part of the pool and not feel bad about it. Same amount of piss in the pool it's just in another part of the pool until the pump comes on, then it's everywhere.
Re: (Score:2)
And how exactly do you suggest we get this at the global level? Is removing the California carbon market bringing us any closer to world-wide acceptance of a carbon market?
Re: ‘Market’? (Score:2)
Sounds like you understand my point
Re: (Score:2)
Yeah but your point is empty, it's "our laws don't apply to China so let's just not do anything until they do", that's why they were asking for your solution.
National sovereignty is just a reality of the world but why would we let that stop ourselves from improving and making life better? Just setting an example on the world stage is important and has real implications.
Re: (Score:2)
Except if your point is "let's find any excuse to ensure pollution remains free forever", no, I don't.
Re: (Score:2)
Not everything that pollutes can be moved out of California. And as other states and countries adopt similar systems, polluters will find it more difficult to relocate to somewhere less regulated. And depending on the activity, the cost to bring the product back to California may be high enough to negate the savings from not having to pay the tax.
And as you note, nothing says that the US can't pass a carbon import tariff in the future.
Re: (Score:2)
not only a carbon tariff, but also low-emission industries will tend to have intensive to move into California from elsewhere, because with carbon market revenues, California can afford to charge less legacy taxes compared to other jurisdictions while offering similar services.
Re: (Score:2)
Seriously though, why would anyone buy these credits?
Legal requirements. You don't seem to understand that such a market is backed by regulations.
They are not helping the planet
Objectively they are. They are being used directly to fund emission reduction projects, it's right there in the summary. Not only do they fund projects like that but they also raise the cost of being a dirty polluter thereby incentivising a reduction.
Re: (Score:1)
In other words, money is confiscated from industry that actually does things people need and is then given to the well connected green groups that peddle 'solutions' that don't really do anything. Cap and trade is a farce. No different than many of the carbon offset programs. Most environmental legislation is a racket that deeply funds leftist politicians in return for feeding more tax money in to their pockets.
Yes, there are some legitimate and useful environmental things that get done. But the vast ma
Re:Econ 101 (supply and demand) (Score:4, Informative)
Why guess when we can just check the data
https://fred.stlouisfed.org/se... [stlouisfed.org]
Looks like manufacturing in CA is still quite high and well over where it was a decade ago
Re: (Score:2)
Maybe you should phrase the question more specifically next time ya silly goose.
It's also more a point to take the 7 seconds it takes to check a fact rather than just concern trolling because you have a preset narrative you want to maintain
Cowrie shells (Score:1)
You might as well use cowrie shells as currency. Just like a carbon credit, they have no intrinsic value and no utility whatsoever. Gold, on the other hand, is used to make a lot of things. Cryptocurrency is even worse than a carbon credit because it relies on energy to be used and stored. If you think about it, cryptocurrency is subject to inflation as long as carbon credits exist. You'd need carbon credits to maintain cryptocurrency's functionality.
Funny (Score:2)
Washington State's is going strong. I guess this is what happens when California forgets to hide the audit trail from the public.
a functional carbon market would require (Score:2)
Libertarians and anarchist cryptobros will disagree, but some things absolutely require regulation if they're gonna function properly. Food safety, nuclear safety, financial systems, and carbon
Re: (Score:3)
I don't know what you define as functional. Corporations could go on polluting while advertising carbon neutraility. Nobody gained from that because no carbon was cut, only consumers had to pay that extra tax.
If you think a functional carbon tax market somehow helps with carbon emissions then I have bad news for you.
Re: (Score:3)
If you think a functional carbon tax market somehow helps with carbon emissions
Taxes have little or nothing to do with reducing carbon emissions. They are a politically correct way to fund gibs. If the emissions actually went down, the taxing authority wold receive less revenue and either have to increase the rate or encourage more of the activity you were told that they would be reducing.
Can't maintain revenue? Then we'll have to take it out of the children's education budget.Which has f* all to do with carbon. But it makes for tragic news.
Re: (Score:2)
Sin taxes do work. Cigarette taxes, alcohol taxes, gas taxes. They drive up the price of the "undesirable activity", and reduce its incidence.
The fact that the government becomes addicted to the tax revenue is a separate problem.
Cap and Trade is a bad way to implement it. Cap and Tax would be better.
Re: (Score:2)
The way Cap and Trade works is that industries are motivated to sell their credits when its economically possible to do so. They receive a reward in the form of payment for them.
With Cap and Tax, the price signals become distorted. And because the entity that controls the cap is motivated by income as well, they have an incentive to keep the caps higher. The government addiction to tax revenue can't just be thrown out of the equation just because you don't like the answer.
Carbon market is not the easiest solution (Score:2)
Re: (Score:3)
Cap and trade is first and foremost a rubberstamp, second a way for politicians to get kickbacks, and third a mechanism for allowing those who pollute less than they can do for free to profit from those who pollute more than they can do for free. Both the first and third things enable the second.
Cap and tax would reduce carbon emissions. Cap and trade does not.
You don't seem to be reading serious articles if your conclusion is that we should do something worthless.
P.S. (Score:2)
Did you accidentally hit submit here, or run out of VRAM?
Arbitrage not a solution (Score:2)
The gap between ambition and execution is widening. Global energy-related carbon dioxide emissions reached a record 37.4 billion tonnes in 2023. This raises an uncomfortable question: Are we genuinely decarbonizing or merely engaging in high-cost carbon arbitrage?
Let me suggest it is the latter. That the idea that it is unlikely that attempting to raise the cost of carbon emissions through cap and trade type arbitrage will lead to significant reductions in emissions.
major reason (Score:2)
Calif carbon tax is a major reason that utility bills are so high.
Old argument (Score:2)
I feel like Martin Luther had basically the same argument with the Catholic Church back in the 16th Century.