CARB chairwoman Mary Nichols said the delay to the program’s start date, from January 2012 to January 2013, was because of the “need for all necessary elements to be in place and fully functional”, the L.A. Times reported.
More specifically, the New York Times reported, the CARB is delaying the program to protect it from potential market manipulation. “It was the issue of making sure there isn’t gaming,” Nichols said, according to the paper.
The initiative has been subject to ongoing lawsuits. This spring, a San Francisco superior court judge ruled that the board had not adequately analyzed alternatives to a cap-and-trade program. Last week an appeals court ruled that the CARB could keep working on program rules while waiting for the outcome of its appeal against the original decision.
The L.A. Times said that the board’s work to draft an analysis of alternatives, in compliance with the judge’s order, has given it less time to design the program regulations. But according to the New York Times, Nichols said that the agency is still on track to finish the regulations by its internal deadline of the end of October.
CARB will also release details on offset protocols and allowance distribution within the next two weeks, the New York Times said.
“CARB’s suggested course of action is prudent and will give the cap-and-trade program its best chance of success,” the Environmental Defense Fund’s director of strategic climate initiatives Derek Walker said. “This is a smart and responsible step that also ensures that the greenhouse gas pollution reductions required by the program remain unchanged.”
But Peter Asmus, a senior analyst at Pike Research, told the New York Times, “I think it’s a sign of a lack of faith in the whole cap-and-trade concept, which was also shot down at the federal level, too. [It] shows the push back on environmental regulations is even occurring in California.
“Hard to imagine CARB will abandon the cap-and-trade framework, though [governor] Jerry Brown’s history is peppered with examples of radical shifts in policy,” Asmus added.
The ARB’s news comes in a tumultuous week for international carbon markets. The price of carbon on the European market fell to a two-year low on Friday, the Australian reports, then fluctuated wildly early this week, according to Point Carbon.
The nosedive for CO2 prices followed the EU’s publication last week of an energy efficiency directive, which investors feared would dampen demand for carbon allowances, Environmental Finance reported.
The fall in European prices sent New Zealand’s carbon prices to an all-time low, and market participants said there were no short-term prospects of a rebound, Point Carbon reported.
For more on carbon markets, check out the latest issue of EL Insights.
Picture credit: dana robinson