On November 14, 2012 California held its first auction of greenhouse gas allowances. The auction included a so-called “Current Auction” of 2013 vintage allowances and an “Advance Auction” of 2015 vintage allowances. Pursuant to auction statistics published by the California Air Resources Board (ARB) Settlement Price Per Allowance cleared at $10.09 for 2013 vintage allowances and at $10.00 for 2015 vintage allowances. Auction Reserve Price for both sets was established at  $10.00.


The proportion of total submitted bids to total 2013 allowances available for sale for 2013 vintages was 3.10 showing moderate interest in auction, however the same value for 2015 vintage allowances amounted to 0.14 only, which resulted in only 5,576,000 2015 vintage allowances being sold from the totality of 39,450,000 2015 allowances available for sale at this auction.


Interesting parameter is that compliance entities bought 97.0% of 2013 vintage allowances and 91.0% 2015 vintage allowances at California November 14, 2012 auction. It appears to show that speculative trading in California allowances has the potential to rise.


Moreover, Herfindahl–Hirschman Index (a measure of the concentration of allowances purchased by winning bidders relative to the total sale of current vintage allowances in the auction) shows in my opinion rather low level of concentration (the values 1133 for 2013 vintages and 1485 for 2015 vintages.


The next California auctions in 2013 will be held on 19 February, 16 May, 16 August and 19 November.


Auction application due dates are respectively: 22 January, 16 April, 17 July and 21 October.




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