California’s emissions covered by the WCI carbon market rose 0.8% in 2014 to 146.1 million tonnes, up from 145.0 million a year earlier, data released by regulator ARB on Wednesday showed.
The data means the market’s first two-year compliance period has a surplus of 31 million allowances, in line with analyst expectations of 30-33 million.
“Emissions from the oil and gas sector were up by about 1.8 million year-on-year, all the other sectors were more or less unchanged,” said Chandan Kumar, an analyst at Climate Connect.
An ARB spokesman said that part of the reason for the rise was due to another year of low output from hydroelectric generators, and also a slight increase in emissions from cement makers, which “is expected as the economy grows”.
Part of it is due to another low hydro year (drought), and emissions from cement makers grew slight which is expected as the economy grows.
The deadline for 2013-2014 compliance under California and Quebec’s linked markets was Nov. 1.
Industrial plants and power stations covered by the scheme had to surrender allowances covering all their 2014 emissions and 70% of their 2013 emissions. They were required to hand in permits covering the first 30% a year ago.
Around 290.2 million units were turned in compared to California’s 290.7 million tonne cap, or 99.8% of the total, leaving around 500,000 tonnes unaccounted for, the regulator said on Tuesday.
“We are pleased and proud that California is showing the world how to make cap-and-trade work to reduce pollution and create jobs,” said ARB Chair Mary Nichols in a statement.
Entities not in compliance must hand in four times the required allowances to avoid breaching the law, an oversight that could carry with it a bill of up to $20 million based on current market prices.
Separately, ARB said California had listed 3.9 million early action offset credits from a single forestry project.
It has until Aug. 2016 to clear an administrative backlog of project applications, which officials last week said was at around 9 million units.
By Ben Garside – firstname.lastname@example.org