Following weakness earlier in the month, secondary market prices for California carbon allowances rebounded during the week ended May 29 following the latest quarterly auction.
At month's end, the May 2018 vintage 2018 California carbon contract was pegged in a bid-and-offer spread of $14.84/tonne to $14.86/tonne, increasing 18 cents from the middle of May.
As of May 29, the benchmark December 2018 vintage 2018 California carbon contract was marked in a bid-and-ask range of $15.15/tonne to $15.21/tonne, also rising 18 cents from May 15 assessments.


The latest quarterly allowance auction held by the Western Climate Initiative, which includes California, Quebec and Ontario, saw 100% of the more than 90.5 million current vintage allowances sell at $14.65/tonne. This was up 4 cents from the previous auction clearing price.
Results for the May 15 sale, which were issued May 23 by the California Air Resources Board, also show that 100% of the more than 12.4 million vintage 2021 carbon allowances on offer sold at the market reserve price of US$14.53/tonne.
In the WCI's February auction, 100% of the more than 98.0 million current vintage allowances sold at US$14.61/tonne, and more than 8.5 million, or 69%, of the 12.4 million vintage 2021 carbon allowances were purchased at US$14.53/tonne.
Under the WCI, the California and Quebec cap-and-trade programs were formally joined at the start of 2014, with their first joint auction held in November 2014. Ontario became the third member of the WCI on Jan. 1, 2018, allowing the three governments to hold combined auctions under the program.
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