California's first carbon market takes flight

The $230 million generated from the sale of 2013 allowances will be distributed to the state’s electric investor-owned utilities to provide directly to their customers. On the basis of a proposed decision issued last Friday from the California Public Utilities Commission, which regulates the IOUs, the lion’s share will be set aside for California households.

The $55 million generated from the sale of 2015 allowances will be deposited in a special fund in the state treasury. Governor Brown’s FY 2012-2013 budget earmarks a portion of the funds for General Fund expenditures that reduce carbon emissions and advance the goals of AB 32.

Over the long-run, under the terms of AB 1532 and SB 535, which Governor Brown signed in September, CARB will develop investment plans with the Department of Finance to capitalize on opportunities to drive emission reductions and maximize returns for the California economy. SB 535 ensures at least 10 percent of those projects are located in the state’s most disadvantaged communities, and 25 percent of all proceeds benefit those communities.

The auction proceeds will be distributed to the utilities and deposited in the state treasury on Dec. 10.

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