First cap-and-trade auction a bust for California budget - Business - The Sacramento Bee
A low price for credits and minimal demand for future offsets suggest California will see a mere fraction of the $1 billion that Gov. Jerry Brown and lawmakers estimated the state would receive this fiscal year.
If demand remains similar in two forthcoming auctions, the state would generate only about $140 million, the nonpartisan Legislative Analyst's Office estimated Wednesday.
As California sells credits, it stands to benefit financially. Brown and lawmakers assumed California would take in $1 billion total this year, spending $500 million on state budget relief and $500 million on curbing greenhouse gas emissions.
The California Air Resources Board sold $289 million in credits this month, but most of the money is dedicated for utilities and their ratepayers. That leaves $55.8 million for the state.
Had ARB sold all of its 2015 credits rather than just 14 percent of them, it would have raised nearly $400 million for the state this month.