A special pool of carbon allowances was auctioned by the Department of Ecology last week and the results figure to pour figurative gasoline on the debate over the cap-and-trade system’s impact on the price of actual gasoline.
This latest auction stems from the state’s Climate Commitment Act which caps the total amount of CO2 that gas suppliers and others can emit in our fair state. …
Based on bid data released by Ecology this week, the department sold all 1.5 million allowances available. Half of those went for $51.90 while the other half sold for $66.68. The latter price is 19 percent higher than the last auction’s offerings. …
The bid data suggest prices will go up. There were three times as many bids for the higher price—$66.68—as available allowances. Bidders probably wouldn’t buy at $66.68 if they thought the price of CO2 allowances will go down.
… To be clear, the allowances that were auctioned off last week weren’t new allowances—these were basically “break glass in case of emergency” allowances that were held in reserve in case the gas market got dicey. Spoiler: it already is for Washingtonians looking to fill up their rides. …
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