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RCO





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PostPosted: Fri Mar 03, 2017 2:53 pm    Post subject: low cap and trade auction results for Quebec/California Reply with quote

( this cap and trade market doesn't look to be doing too well )


Mar 01, 2017 | Vote 0 0

Low cap-and-trade auction ahead of Ontario's


A joint Quebec-California cap-and-trade auction has yielded less-than-stellar results, just three weeks ahead of Ontario's first auction and a year before the province plans to link its own system with that market.

Ontario is set to hold an auction on March 22 in its new cap-and-trade system, which limits how much pollution companies can emit.

Businesses covered under cap and trade will buy permits or allowances through quarterly government-run auctions or from other companies that come in under their limits.

The latest Quebec-California auction — the 10th one held since their respective carbon markets were linked on January 1, 2014 — saw just 18 per cent of the current allowances sold, according to results released Wednesday.



Their previous auction saw a promising upswing with 88 per cent of the available credits sold, after results before that of 35 per cent and 11 per cent.

A spokesman for the Ministry of the Environment said since 2014 about three quarters of the credits offered at auction have been sold.

"With a market system, there will be fluctuations both in price and purchasing uptake," Gary Wheeler said in a statement.

"The most important measure of success is reductions of greenhouse gas emissions and individual auction results are not indicative of the overall strength of the market."

Ontario hopes to raise $1.9 billion a year from its cap-and-trade system — $8 billion by the end of 2020 — and promises to spend all of it on programs that reduce emissions and help businesses and consumers adapt to a low-carbon economy.

Most large emitters will receive allowances for free until 2020, which the government says is meant to prevent them from moving to jurisdictions without carbon pricing.

Though the first auction isn't until later this month, cap and trade has already increased the cost of gasoline by about 4.3 cents per litre and boosted the cost of natural gas home heating by up to $6.70 a month.

Auditor general Bonnie Lysyk has said households will also pay another $75 per year by 2019 in indirect costs on goods and services.

Both Lysyk and the environmental commissioner have said that Ontario's cap-and-trade program won't actually limit greenhouse gas emissions through to 2020 because it will often be cheaper for Ontario polluters to purchase California allowances.

Ontario businesses will pay approximately $466 million for Quebec and California allowances by the end of 2020, Lysyk predicted.

By Allison Jones, The Canadian Press

http://www.durhamregion.com/ne.....ontario-s/
RCO





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PostPosted: Fri Mar 03, 2017 2:53 pm    Post subject: Reply with quote

Reconsider cap-and-trade market if auctions don't pick up, NGO urges Ontario


Ainslie Cruickshank

Friday, March 3rd, 2017



Environmental Defence wants Ontario to reconsider joining the Quebec and California cap-and-trade market next year if there isn’t a persistent improvement in allowance auction results.

“The results out of this last auction are a bit lacklustre, that’s for sure, and it is a bit concerning,” said Keith Brooks, the environmental organization’s programs director.

The results from Quebec and California’s first emissions allowance auction of 2017 were released this week and just 18 per cent of the available credits were sold.

The last auction in December saw 88 per cent of available credits purchased, but in the two before...

http://ipolitics.ca/2017/03/03.....s-ontario/
RCO





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PostPosted: Fri Mar 03, 2017 2:54 pm    Post subject: Reply with quote

Low results in Quebec California cap and trade auction weeks ahead of Ontario's



Allison Jones — Canadian Press

Wednesday, March 1st, 2017


A joint cap-and-trade auction in Quebec and California has yielded less-than-stellar results, just three weeks ahead of Ontario’s first auction and a year before the province plans to link its own system with that market.

Ontario is set to hold an auction on March 22 in its new cap-and-trade system, which limits how much pollution companies can emit.

Businesses covered under cap-and-trade will buy permits or allowances through quarterly government-run auctions or from other companies that come in under their limits.

The latest joint auction in Quebec and California, a market Ontario plans to join next year, saw just 18...


https://ipolitics.ca/2017/03/01/low-results-in-quebec-california-cap-and-trade-auction-weeks-ahead-of-ontarios/
RCO





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PostPosted: Fri Mar 03, 2017 2:57 pm    Post subject: Reply with quote

California’s cap and trade auction another washout

March 1, 2017 1:17 PM

David Siders - dsiders@sacbee.com

By Dan Walters


dwalters@sacbee.com


February’s quarterly auction of carbon dioxide emission allowances under California’s cap and trade program was another financial washout for the state.

Results for last week’s auction were posted Wednesday morning, revealing that just 16.5 percent of the 74.8 million metric tons of emission allowances were sold at the floor price of $13.57 per ton.



California State Sen. Fran Pavley, D-Agoura Hills, Calif., holds a bill signed by Gov. Jerry Brown, after Brown signed legislation in Los Angeles on Sept. 8, 2016, setting a new goal to reduce greenhouse gas emissions 40 percent below 1990 levels by 2030. The legislation didn’t contain reauthorization of the state’s cap and trade system of auctioning emission allowances and recent auctions, including one in February, have produced paltry results. Richard Vogel - AP

The state auctions emission allowances to polluters and speculators as part of its program to reduce greenhouse gases. The proceeds are supposed to be spent on public programs to slow climate change.

February’s auction is being closely watched by market analysts because the last three quarterly auctions in 2016 posted sub-par results.

Almost all of February’s proceeds went either to California’s utilities, who sell allowances they receive free from the Air Resources Board, or the Canadian province of Quebec, which offers emission allowances through California. Both are first in line when auction proceeds are apportioned.

The ARB was offering 43.7 million tons of state-owned emission allowances, but sold just 602,340 tons of advance 2020 allowances, which means the state will see only $8.2 million, rather than the nearly $600 million it could have received from a sellout.


The paltry auction revenues will likely stall Gov. Jerry Brown’s 2017-18 budget plan to spend $2.2 billion on a variety of climate-related programs and projects, including $800 million on his bullet train project.

Analysts have cited a glut of emission allowances on the market, and political and legal uncertainty over the cap and trade program for weak auction interest. The current program’s legality is being challenged in a lawsuit and expires in 2020. Brown wants it to be reauthorized by a two-thirds legislative vote to remove the legal cloud.

“Today’s anemic auction results demonstrate that the state’s landmark cap and trade program is in need of reform and the kind of market certainty that only the Legislature and governor can provide via statute,” Senate President Pro Tem Kevin de León said in a statement. “We need a program that both reduces pollution and provides stable funding to clean up climate emissions.”

Read more here: http://www.sacbee.com/news/pol.....rylink=cpy
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PostPosted: Fri Mar 03, 2017 2:59 pm    Post subject: Reply with quote

( this cap and trade market appears to be a bust and another looming fiscal disaster for wynne but why are we not surprised , anything she touches turns to dust )


Bombing cap and trade auctions in California, Quebec threaten Ontario’s $8-billion climate change plan


Brian Platt, Postmedia News | August 24, 2016 10:19 AM ET
More from Postmedia News
.
Ontario Premier Kathleen Wynne announces climate change policy with Ontario Minister of Economic Development, Employment and Infrastructure Brad Duguid, left, Ontario Minister of the Environment and Climate Change Glen Murray, right, at Evergreen Brickworks in Toronto in June.



The cap-and-trade program Ontario’s set to join next year is having big trouble in California and Quebec, and it could mean Ontario’s much-heralded $8.3-billion Climate Change Action Plan has far less money to spend in reality.

For the second time in a row, a joint cap-and-trade auction held by California and Quebec has failed to sell most of the emissions allowances on offer. It leaves the two governments hundreds of millions of dollars short on revenue projections, and nobody can say for certain why the auctions are failing.

Cap-and-trade auctions are held quarterly, and see businesses buying allowances from the government to cover their expected greenhouse gas emissions during a time period. Businesses can also trade allowances in between auctions. In a cap-and-trade system, there is a total cap on emissions and only enough allowances to fit within that cap. The cap comes down over time.

Ontario has budgeted for about $2 billion annually from cap-and-trade auctions, starting next year — a figure that will be impossible to meet if these auction results continue.
.
California and Quebec have been holding joint auctions since November 2014. The first five sold out completely, while the sixth sold 95 per cent of the allowances on offer. But Joint Auction #7, held in May, was a bust that saw only 11 per cent of allowances sold, and observers were anxiously awaiting results of the August auction to see if the market would rebound.

A summary report of Joint Auction #8 was released Tuesday, and it shows only 35 per cent of the total allowances were sold — an improvement from May, but a far cry from what the governments had budgeted for.

“Thirty-five per cent is definitely showing that there’s a problem,” said Duncan Rotherham, a carbon market expert who has done cap-and-trade modelling for Ontario energy firms. “And this is twice as scary as the first one because it’s a trend.”

In fact, the underlying numbers for California are even worse. Almost all of the allowances purchased in the California auction were special “consignment” allowances given to energy utilities; the state government sold just one per cent of its allowances on offer, which is disastrous for projects — such as California’s high-speed rail plan — that are supposed to be funded from auction revenue. California had been raising about $650 million to $800 million (Canadian) per auction, but May’s only raised about $13 million and August’s will be even worse. Quebec has raised roughly $200 million per sold-out auction, but only raised $20 million in May’s auction.

The same problem could be about to hit Ontario’s government. The five-year, $8.3-billion climate change action plan is to be funded entirely from cap-and-trade revenue. The plan is seen as crucial to meet Ontario’s emissions-reduction targets, and is supposed to fund electric vehicle incentives, home energy retrofit programs, and many more green initiatives.

A statement from Environment and Climate Change Minister Glen Murray’s office said the province has built its action plan so it can adjust to auction results.

“As it is a market system, fluctuations are expected and the result of one single auction is not an indicator of the strength of the market,” the statement said, despite the fact Postmedia asked about two poor auctions in a row.

“It’s important to note that, on average, 80 per cent of total current allowances offered have been sold at auction,” the statement continued. “The Climate Change Action Plan has specific built-in ranges to adjust to auction results and was designed with that flexibility.”

Ontario’s cap-and-trade program starts up in January 2017, but for the first year the auctions will be isolated within the province. The joint auctions with California and Quebec start in 2018, and the total revenue from those auctions will be split proportionally between the three jurisdictions.

Rotherham said it’s unclear what will happen when Ontario starts its auctions —— even when the auctions are Ontario-only. He said the secondary market, where businesses can trade the allowances they’ve purchased in auctions, could start seeing large discounts if nobody’s buying at the regular auctions.

“You could have buyers in Ontario saying, maybe we need to sit out of these Ontario auctions,” he said. “Why would I buy fully priced Ontario allowances when I can wait and buy discounted (California and Quebec) allowances?”

He also pointed out that if California businesses have stopped buying but Ontario’s are ready to gobble up allowances, the split auction revenue results in “a massive transfer of wealth from Ontario to California.”

When trying to diagnose the problem with the auctions, most people point to legal and political uncertainty in California. A lawsuit arguing the program is an unconstitutional tax is working its way through the courts, and the state government is battling political opponents over how to extend the program past 2020.

Dave Sawyer, whose EnviroEconomics firm has done cap-and-trade analysis for the Ontario government and other clients, said it’s not surprising the auctions are struggling, given the uncertainty in California. But he said it could also simply be that cap-and-trade is working and emissions reductions are happening faster than expected, meaning fewer allowances are necessary.

He said observers need to be patient because the system is so complex, and it will take a long time to know whether deeper problems are at play — or if this is just short-term turbulence from California’s political situation.

“I don’t know if this is a trend yet,” he said. “Does it indicate an underlying structural problem? I don’t think one can conclude that. There’s all kinds of reasons you could find to explain it.”

http://business.financialpost......hange-plan
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PostPosted: Fri Mar 03, 2017 3:19 pm    Post subject: Reply with quote

Another failed idea? How will we know if this plan lowers global temperatures, anyway? How will we know if it even lowers atmospheric CO2?

Aren't these the same people who felt that higher power costs were the solution to the problem (if it is a problem) anyway? How can they complain if they get what they want, even if it doesn't work?

Maybe it works by forcing industry to go to China?

Maybe the Conservatives can offer a compromise so it won't be so embarrassing to the government?
RCO





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PostPosted: Fri Mar 03, 2017 3:29 pm    Post subject: Reply with quote

Bugs wrote:
Another failed idea? How will we know if this plan lowers global temperatures, anyway? How will we know if it even lowers atmospheric CO2?

Aren't these the same people who felt that higher power costs were the solution to the problem (if it is a problem) anyway? How can they complain if they get what they want, even if it doesn't work?

Maybe it works by forcing industry to go to China?

Maybe the Conservatives can offer a compromise so it won't be so embarrassing to the government?


the media has simply believed wynne and trudeau's spin that cap and trade is wonderful and financially a winner

however these failed auctions seem to indicate its a doomed idea and going absolutely nowhere

Ontario was even crazy enough to budget or claim there is going to be $2 billion dollars annually in revenue from this plan a figure which is almost certaintly going to be much lower
RCO





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PostPosted: Sun Mar 05, 2017 8:09 pm    Post subject: Reply with quote

Wynne’s carbon crap shoot
Ontario’s premier is gambling her government can make billions of dollars from a stock market that keeps crashing


lorrie-goldstein
By Lorrie Goldstein, Toronto Sun
First posted: Saturday, March 04, 2017 05:06 PM EST | Updated: Saturday, March 04, 2017 05:45 PM EST

wynne
When the California /Quebec market first crashed last May, Ontario Premier Kathleen Wynne initially took an alarmingly cavalier attitude toward it, suggesting she didn’t understand the potential financial implications for Ontario. (ERNEST DOROSZUK/TORONTO SUN)



The California/Quebec cap and trade market Ontario Premier Kathleen Wynne is counting on to fund her $8.3-billion climate action plan just crashed, again.

This is the highly speculative carbon trading stock market Ontario will join next year that Wynne is relying on to fatten her government’s coffers by $1.9 billion annually.

This so it can fund its various and sundry green energy initiatives, such as subsidizing Ontario’s electricity rates by up to $1.3 billion - which isn’t actually a green energy initiative.

The problem now confronting Wynne is that in three of the last four quarterly auctions under the California/Quebec cap and trade carbon pricing scheme, only a fraction of the available carbon permits have been bought by industrial greenhouse gas emitters.

Since the sale of these permits is how governments make money from cap and trade, it means their anticipated revenues from carbon pricing have been repeatedly slashed by hundreds of millions of dollars, throwing the future of their green energy programs into doubt.

Ontario will hold its first internal carbon permit auction later this month, although it’s hard to see how even the Liberals could screw that up since they set all the rules.

But once Ontario joins the California/Quebec cap and trade market next year, all bets are off.

In its just-completed February auction, only 18% of the available carbon permits sold.

That’s particularly alarming because this round of permit sales was expected to be strong, since 88% of available permits sold in the last auction in November, 2016.

That followed two weak auctions where only 35% of the available permits were sold in August, 2016 and 11% in May, 2016.

When the California /Quebec market first crashed last May, Wynne initially took an alarmingly cavalier attitude toward it, suggesting to me she didn’t understand the potential financial implications for Ontario.

Wynne dismissed the crash with a non-answer, saying: “California is ahead of us, and we’ve got some catching up to do. We’re pushing ahead, and there’s a lot of innovation that I know can happen in Ontario, and that’s what our cap-and-trade program is going to be about.”

A week later, perhaps after being briefed by someone who understood what had happened, Wynne acknowledged her government might have to lower its anticipated revenues of $1.9 billion annually from cap and trade in light of the crash of the California/Quebec market.

At that point Wynne told CBC Radio: “It’s a market. We know that there will be highs and lows ... It was this round that it was not as good. We just don’t know what the market will be. That ($1.9 billion) is our projection. If we have to revise the projection then we will.”

Of course, if Ontario has to slash its anticipated $1.9 billion in annual revenues from cap and trade, how is it going to pay for Wynne’s $8.3 billion (over five years) climate action plan, without raising taxes or plunging the province even further into debt?

Even if Ontario realizes $1.9 billion a year from cap and trade, that will be paid for by Ontarians in the form of higher retail prices for almost all goods and services.

Meaning either way, we lose.

http://www.torontosun.com/2017.....crap-shoot
RCO





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PostPosted: Fri Mar 31, 2017 7:32 am    Post subject: Reply with quote

( we will soon find out the results of Ontario's first cap and trade auction )

Expect Ontario's cap-and-trade auction to get off to a slow start

iPolitics Insights



Thursday, March 30th, 2017


THE CANADIAN PRESS/Darryl Dyck


Erica Morehouse


On Apr. 3, the Ontario government will announce the results of its first ever auction of pollution permits under its new cap-and-trade program aimed at cutting the emissions that contribute to global warming. As historic and newsworthy as the event may be, it would be wrong to read too much into the results as a measure of the success of the overall environmental program.

Ontario’s cap-and-trade program, launched on Jan. 1, requires emitters such as power plants to surrender a “carbon allowance” for every ton of pollution they produce. The ‘cap’, or limit on emissions, will be reduced over time, ensuring continuing reductions of emissions. The ‘trade’ — allowing emitters to sell excess allowances on the market — provides emitters with a flexible, cost-effective path to going green.

The Ontario government will auction many of these carbon allowances, as they did this month, and the new climate law requires all proceeds to be reinvested in public transit, green technologies and other environmental endeavors that reduce carbon pollution.

The actual auction was held Mar. 22, and offered for sale a total of 28 million allowances at about $17 each. Theoretically, that means the final result announced in April could be hundreds of millions of dollars raised by the province for investments in green projects.

History suggests the actual sum could be considerably less.

Results from recent California and Quebec auctions, which could influence Ontario’s results, have varied widely; those auctions sold 88 per cent and then 18 per cent of available allowances in the two most recent auctions.

There’s a number of reasons why cap-and-trade programs can get off to a relatively slow start.

open quote 761b1bRelatively soft auction results in the early stages of a cap-and-trade program may simply indicate that the system is working exactly as it was designed.

In the initial stages, for instance, many polluters can find relatively simple ways to cut their emissions enough to meet their cap for the year and thereby avoid having to buy allowances. Or, since they have a few years before they are required to turn in the required allowances, they could simply wait to purchase them.

Many allowances also will be provided to businesses for free — especially those energy-intensive businesses that have competitors in other jurisdictions not subject to similar climate regulations.

Relatively soft auction results in the early stages of a cap-and-trade program may simply indicate that the system is working exactly as it was designed — by allowing industries to make a gradual transition to lower emissions without causing undue economic upheaval or job losses.

Cap-and-trade programs already are showing that economic prosperity and ambitious climate action can go hand in hand. Ontario’s system is modeled after the joint program between Quebec and California, which have both seen carbon pollution decline even as their economies thrived in their first four years of cap-and-trade. In fact, in the first four years of California’s program, emissions under the cap declined while jobs were added faster than the national average — and California’s GDP grew to make the state the fifth largest economy in the world.

The Ontario scheme is designed to achieve similar environmental and economic results by easing consumers, businesses and industries gradually into the new cap-and-trade regime which will put the province on track to a low-carbon economy.

Ontario was able to develop and implement a rigorous but flexible emission-reduction program in less than half the time it took California and Quebec, an example of how climate giants can spur faster and more ambitious action by working together.

A significant feature of Ontario’s plan is that it includes a proposed linkage with Quebec and California’s market. That would mean carbon allowances could be used interchangeably in all three locations, and that Ontario would begin auctioning allowances at the same time as California and Quebec, who held their last auction in February.

Ontario has a rich history of environmental innovation, and its cap-and-trade program is poised to be a key component of its larger climate policy.

As tempting as it may be to judge the Ontario cap-and-trade program by the revenues it will generate, by far the more important measure of success is what it will do for the environment.

http://ipolitics.ca/2017/03/30.....low-start/
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PostPosted: Fri Apr 21, 2017 7:23 am    Post subject: Reply with quote

California, Quebec and Ontario push forward with cap-and-trade program


Tamsin McMahon - U.S. CORRESPONDENT


SAN FRANCISCO — The Globe and Mail


Published Thursday, Apr. 20, 2017 10:11PM EDT



Canadian and U.S. political leaders vowed to press ahead with a joint cap-and-trade program involving California, Quebec and Ontario despite what some fear are mounting legal and political hurdles to establishing North American carbon market.

California and Quebec already hold joint auctions for carbon allowances as part of the Western Climate Initiative. Ontario, which launched a cap-and-trade program earlier this year and held its first auction in March, has pledged to link up with California and Quebec next year. The cross-border program is also seen as a critical plank in the Canadian government’s push for a national carbon-pricing plan to meet its target of reducing greenhouse gases by 30 per cent below 2005 levels by 2030.

But the program has been beset by political and financial uncertainty.

Since the start of last year, several of the quarterly California-Quebec auctions have failed to sell out, sending prices of allowances plunging and leaving an estimated $143-million (U.S.) in unsold carbon allowances.

Concerns around the future of the joint auction were fuelled partly by a legal challenge from California business groups, which accused the state’s cap-and-trade system of being an illegal tax. While the state won a court victory earlier this month, opponents say they intend to appeal the decision to the state’s Supreme Court.

More urgently, California Governor Jerry Brown must also win a battle with his state’s legislature to extend California’s cap-and-trade program beyond 2020.

Meanwhile, Ontario is heading into an election next year in which the opposition Progressive Conservatives have vowed to do away with cap-and-trade.

The election of avowed climate skeptic Donald Trump as U.S. President has only added to the uncertainty surrounding the expansion of a North American carbon market.

In a meeting of political and business leaders and climate scientists in San Francisco on Wednesday, Ontario Environment Minister Glen Murray said his government is working hard to ensure that the province’s cap-and-trade system can’t easily be scrapped. “I didn’t get elected and appointed to cabinet [to do] something in a way that someone could undo it after,” he said. “Once this is done, it’s time to get on with it.”

Linking Ontario and Quebec’s cap-and-trade program to that of California, among the largest economies in the world, “will eventually force a market into North America,” Mr. Murray said.

Mr. Brown, who needs to win two-thirds support from legislators to renew California’s cap-and-trade program, vowed to continue to push an aggressive climate-change agenda in his state. “We’re not waiting for congress, we’re not waiting for the President, we’re going to do everything we can now,” he said.

Canadian Environment Minister Catherine McKenna, in town to press the case for the importance of Canada’s trade relationship with the United States, met with Mr. Brown, signing onto the Governor’s Under2 Coalition of governments pledging to limit the rise in the average global temperature to less than 2 C. She said she has “full confidence” that the California Governor can strike a deal to extend the state’s cap-and-trade program.

“He’s going to have to work hard to get the buy-in that he needs, but I think he’s confident that he will,” she said in an interview. “He’s a very experienced politician and I think there’s a really good case that working together is going to be the way we are going to tackle climate change and the cap-and-trade system is an important part of it.”

Ms. McKenna played down the threat that Mr. Trump’s anti-climate rhetoric could pose to Canada’s ambitious carbon-reduction targets, emphasizing the growing role that provinces, states and local municipalities are playing in pushing aggressively to lower carbon emissions in their communities and across borders.

“We’re willing to be partners with whoever is going to take serious action on climate change,” she said. “I’m going to keep making the case that there is a real economic opportunity that climate action brings, that we are creating good jobs right now in renewable, in clean energy, innovation and that’s what governments want.”

http://www.theglobeandmail.com.....e34770662/
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PostPosted: Thu May 25, 2017 8:04 am    Post subject: Reply with quote

Quebec-California cap-and-trade auction sells out current allowances

.
The Canadian Press
Published Wednesday, May 24, 2017 4:34PM EDT



The latest Quebec-California cap-and-trade auction sold out of its current allowances, a stark improvement from the previous one in which only 18 per cent of its offerings sold.

Ontario, which started a cap-and-trade program this year, will hold its second auction on June 6.

The province, which is expected to join the Quebec-California market next year, saw strong results in the first auction -- it brought in $472 million for green programs -- but the Liberal government has warned of possible volatility in the carbon market.



Since 2014, the Quebec-California market has sold roughly three quarters of its credits at auction.

The system aimed at lowering greenhouse gas emissions puts caps on the amount of pollution companies in certain industries can emit.

If they exceed those limits, they must buy an equal number of allowances at auction or from other companies that come in under their limits.

Ontario had initially been projecting its cap-and-trade program would bring in $1.9 billion per year, but this year's budget projected $1.8 billion for this fiscal year and $1.4 billion annually starting in the next year, an adjustment the government said was to allow for market fluctuations.

Ontario's four-year climate change action plan is funded by cap-and-trade revenues and has planned for a range of between $5.9 billion and $8.3 billion. The money is set to go to green initiatives such as social housing retrofits, an electric vehicle incentive program and public transit.

http://www.ctvnews.ca/canada/q.....-1.3427718
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low cap and trade auction results for Quebec/California

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