Prices for California carbon emissions permits dropped nearly $5 per ton last week, the first price drop in nearly two years, according to state results announced Thursday.
Last week’s quarterly sale of permits that high-emitting businesses need to cover their operations in California saw prices settle at $37.02 per ton of carbon, close to $5 below the February 2024 price of $41.76.
The reason for this quarter’s price drop, after progressive increases at auctions since November 2022, wasn’t immediately apparent. Experts said the lower price could be a sign of market uncertainty as the California Air Resources Board moves into a rulemaking on amendments to the cap-and-trade program that would increase the program’s stringency and raise credit prices by reducing the pool of allowances.
CARB has been hosting workshops on potential amendments since last summer, when observers suggested that projected increases in credit prices as a result of program changes drove a run on credits that caused prices to spike.
