The Quebec government says it raised about $215-million in revenue for its Green Fund in the first cap-and-trade greenhouse gas emission credits auction since Ontario bowed out in the spring.
Results from the Aug. 14th joint Quebec-California auction released Tuesday show that all 79 million available current vintage emission units were sold for $19.77 each and all 9.4 million 2021 future units were sold for $19.57.
By comparison, in the May auction that included Ontario, 90.6 million current emission units were sold at $18.72 and six million future emission units sold for $18.56. (An emission unit is the equivalent of one tonne of carbon dioxide.) The earlier sale generated about $190 million for Quebec.
The Ontario government introduced a bill last month to scrap Ontario’s cap-and-trade carbon pricing system, which was one of Premier Doug Ford’s campaign pledges.
Still, bids in the August auction exceeded available credits by a significant margin, pointed out Dave Sawyer, an economist for Ottawa-based consultancy EnviroEconomics.
“I think what we’re seeing here is the continued belief that California and Quebec are serious about the program,” he said.
“I’m a little surprised at how strong the demand looks. There was a belief that Ontario was a net buyer, so that would drive up demand in the other jurisdictions, but it seems not to have affected the market for now.”
He said the long-term loss of Ontario in the market is yet to be seen.
About 91 per cent of the bids for current credits and 75 per cent of the bids for future credits were made by entities covered by emissions compliance law, which suggests speculators didn’t greatly influence the results, Sawyer said.
Soon after being elected in June, Ontario Premier Doug Ford cancelled the Ontario cap-and-trade auctions that had resulted in nearly $2 billion in revenue in four auctions in 2017, prior to it joining with Quebec and California early this year.
The next Quebec-California auction is to take place on Nov. 14.