Results of the most recent Cap and Trade auction announced yesterday, where only 2% of carbon credits were sold, pose risks to Caltrain electrification funding, the High Speed Rail project, and other state transportation and housing goals. The auction brought in $10 million, compared to $150 million that the state was expecting.
The LA Times reports that the reason for the low auction reports is unclear. It could be lower carbon emissions leading to less need for credits buyers’ concern about the risk than pending litigation will rule against the program, or other market speculation.
Caltrain is seeking $225 million from state Cap and Trade funds this summer to be able to move ahead with the electrification project, and High Speed Rail’s budget depends on a 25% earmark of Cap and Trade funds. The budget has a $500Million reserve in case of auction shortfalls, but cuts are expected to spending for programs that had been depending on the funds.