Figure 1. CCA Pricing Chart (CARB Workshop Timeline - July 7th, 2023 to Present): |
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In the Cap-and-Trade workshop held on July 27th, 2023, California Air Resources Board (CARB) presented considerations for allowance budget scenarios that would require 48% or 55% reductions in greenhouse gas (GHG) emissions by 2030 or maintaining the current 40% reduction from 1990 levels.
A 48% reduction would result in a final 2030 allowance budget of 173 million tons and a 55% reduction would result in a budget of 149 million tons, compared to the current 40% target resulting in a 200 million ton budget. Rajinder Sahota noted that the 48% target in the Scoping Plan was heavily reliant on carbon capture and sequestration (CCS) and direct air capture (DAC) technologies and could anticipate renewable hydrogen volumes climbing 426 times greater than the current levels by 2030.
CARB also stated that approximately 115 million to 390 million allowances would cumulatively need to be removed from the budget to meet the target set by each scenario. Staff also mentioned they are considering removing allowances from the cost-containment and auction and allocation pools to help accelerate reductions. This would adjust annual budgets for 2025-2030 and set a decline path using a constant annual percent change between 2024 and 2030.
Potential pools to retire California Allowances: |
Potential 2021-2030 Allowance Budgets: |
Potential Budget Scenarios: |
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