March 17, 2015 / 10:51 PM / 4 years ago

California carbon revenue hits $1.6 billion

SAN FRANCISCO, March 17 (Reuters) - California’s February carbon permit auction raised $629.5 million, bringing the state’s total from the program’s 10 quarterly auctions almost to $1.6 billion, state officials said on Tuesday.

Funds raised by the sale of the permits to large emitting businesses like oil refineries and cement manufacturers are deposited into a state account dedicated to funding clean energy programs including California’s ambitious high speed rail project.

In 2013, California Governor Jerry Brown borrowed $500 million from the account to help plug holes in the state budget, $100 million of which has been repaid. The remaining $400 million from the loan is dedicated to the bullet train project.

California’s over two-year-old carbon cap and trade program is a key component of the state’s goal of reducing output of heat-trapping greenhouse gases to 1990 levels by the end of the decade, or about 15 percent below a business-as-usual scenario. The state is currently on track to meet that target, officials said.

By 2050, the state plans to ultimately cut greenhouse gas emissions 80 percent below 1990 levels.

The February auction was the state’s largest to date and its first since the program expanded in January to cover transportation fuels like gasoline and diesel and home heating fuels like natural gas.

California’s cap-and-trade program operates in conjunction with the Canadian province of Quebec, which has similar environmental goals. California officials hope to expand the program to other U.S. states but the near-term prospects of that are dim given a lack of enthusiasm in other state legislatures.

California and Quebec’s next carbon permit auction will be held in May. (Reporting by Rory Carroll; Editing by David Gregorio)

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