POLITICO: "There's a Run on Carbon Credits. That's Good News for the Budget."

A segment in POLITICO's new California Climate newsletter quotes RFF Senior Fellow Dallas Burtraw regarding the state's recent auction of greenhouse gas permits.

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Aug. 23, 2023

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That’s all great news for state coffers: The auction raised about $1.2 billion for the state’s greenhouse gas reduction fund, which goes to things like transportation electrification, affordable housing construction and tree planting, with the majority of benefits going to disadvantaged communities.

But it doesn’t have much impact on actual emissions, energy economists said. Prices would need to be a lot higher to entice industry to change their practices instead of buying permits.

“On the one hand, $35 a ton is real money,” said Dallas Burtraw, a senior fellow at Resources for the Future. “But the price by itself is not sufficient at this level to do the work of driving decarbonization in the California economy.” The primary way that emission reductions have been achieved so far is through regulatory programs and performance standards, he said.

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