When Democratic California Gov. Gavin Newsom vowed Monday to create a state electric vehicle tax credit if President-elect Donald Trump eliminates the federal credit, Newsom indicated he would tap the state’s carbon market for money.
But the market, which generates billions for state climate projects, is expected to disclose its own financial uncertainty Wednesday when it announces the results of its auction last week of “credits” that polluters must buy if they exceed emissions limits.
Analysts expect the state to take in $150 million to $200 million less from the auction than it could have if it had moved forward with plans to tighten market regulations. The total revenue available for the state to spend on climate programs is expected to be roughly $1 billion instead of $1.2 billion.
The California Air Resources Board, which runs the carbon market, has postponed releasing a proposal to strengthen market rules and further decrease carbon emissions. The market aims to reduce emissions by setting annual limits on large emitters and forcing those that exceed limits to pay the state with credits they have bought and saved.
