California nets $860 million from carbon auction

SACRAMENTO - California will collect $860 million from auctioning carbon-emissions permits after the allowances sold out at a record price for the second straight quarter, according to state data released Tuesday.

Auction results released by the California Air Resources Board showed that demand remains strong for pollution permits since California lawmakers renewed the state's cap-and-trade program in July. The program requires polluters to obtain a permit for each ton of greenhouse gases they release. The number of available permits declines each year.

Auction proceeds pay for a variety of environmental, transportation and other projects including high-speed rail and clean-vehicle subsidies.

Permits sold for $15.06 for current emissions, the highest price ever. That's the nearly $1.50 above the auction floor and up from $14.75 in August. Permits for emissions in 2020 and beyond sold for $14.76 in last week's auction.

Lawmakers voted in July to reauthorize the cap-and-trade program through 2030. Before that demand for permits plummeted as businesses waited to see if the program would continue.

Gov. Jerry Brown has lauded the program around the world, including earlier this month at climate talks in Europe. California and the European Union agreed to host regular meetings, also working with China, on improving carbon markets, which aim to reduce pollution by putting a price on carbon emissions.

Cap-and-trade supporters say the program is the most cost-effective way to reduce greenhouse gases because it creates financial incentives for polluters to cut back their emissions without strict mandates. But some environmentalists criticize the program, saying that flexibility allows oil refineries to continue fouling the air.

California emissions in 2016 dropped nearly 5 percent from the year before, largely due to the state's renewable portfolio standard, which requires power utilities to increase the share of electricity that comes from renewable resources, according to state data released earlier this month.

California has set a 2030 goal of the reducing greenhouse gas emissions 40 percent below their 1990 levels.