Glossary

Offset Pricing Monthly Market Digest – December 2018

Offset Pricing Monthly Market Digest – December 2018

Offset Pricing Monthly Market Digest – December 2018


Offset Supply Information:
All CCOs issued to date: 141.46 million
Compliance credits awaiting issuance: 16.87 million

CA and General Market Commentary:
Market activity was muted over the holiday period. Low trading volumes were reported for both allowances and offsets.
ARB will hold its next allowances auction on February 20th. The new 2019 floor price of $15.62 will be in effect.

ClimeCo Corporation is a respected project developer, advisor and trader of environmental commodity market products. Specialized expertise in regional criteria pollutant trading programs, California cap‐and‐trade, voluntary markets and project development and financing of internal CO2 abatement systems complement ClimeCo’s diverse commodity portfolio. Within the Climate Action Reserve, ClimeCo is the largest developer of U.S. GHG‐offset projects and producer of U.S. voluntary carbon offsets, managing projects that reduce more than four million tonnes of CO2e per year. For information, contact 484‐415‐0501 or nmarshall@climeco.com.

Offset Pricing Monthly Market Digest – December 2018

Offset Pricing Monthly Market Digest – October 2018

Offset Pricing Monthly Market Digest – October 2018

Offset Supply Information:

  • All CCOs issued to date: 139.78 million
    Compliance credits awaiting issuance: 14.04 million
    CA and General Market Commentary:
  • Prices for offsets dropped dramatically at the end of the month, as the deadline passed for entities completing their final submissions for the full 3-year 2015-2017 triennial period (CP2). While prices for CA Allowances were up $0.08 from September, CCOs dropped $0.30-$0.40.  This reaction was to be expected, as buyers of offsets today will not need them for compliance until October 2019.

The backlog of compliance credits awaiting issuance dropped dramatically as ARB apparently expended significant energy to issue to CCOs prior to the November 1st deadline for CP2 compliance. Only 1.3 million new ROCs were registered and added to the backlog during October, while ARB issued 20.91 million CCOs, reducing the backlog by a net 19.6 million ROCs.

Three potential market-moving events are on the horizon:

  • On November 14th, ARB will hold its last quarterly allowance auction for 2018, and results will be announced on November 21st.  The clearing price for the last auction, held in August, was $15.05.  Last year, auction clearing prices ticked upward throughout the year, with November’s auction settling well above the anticipated floor price for the next year.
  • On November 15th, the Board of ARB will hold a public meeting to discuss proposed amendments to the Cap and Trade Regulation.  Meeting announcement and supporting documents can be viewed here: https://www.arb.ca.gov/regact/2018/capandtrade18/capandtrade18.htm
  • On December 1st, ARB will announce the auction reserve (floor) price for 2019 auctions. 

ClimeCo Corporation is a respected project developer, advisor and trader of environmental commodity market products. Specialized expertise in regional criteria pollutant trading programs, California cap‐and‐trade, voluntary markets and project development and financing of internal CO2 abatement systems complement ClimeCo’s diverse commodity portfolio. Within the Climate Action Reserve, ClimeCo is the largest developer of U.S. GHG‐offset projects and producer of U.S. voluntary carbon offsets, managing projects that reduce more than four million tonnes of CO2e per year. For information, contact 484‐415‐0501 or nmarshall@climeco.com.

Offset Pricing Monthly Market Digest – December 2018

Offset Pricing Monthly Market Digest – September 2018

Offset Pricing Monthly Market Digest – September 2018

Offset Supply Information:

All CCOs issued to date: 118.87 million
Compliance credits awaiting issuance: 33.51 million

CA and General Market Commentary:

  • Prices for offsets that can be delivered before the November 1st compliance deadline continued to be elevated in September. This year is of particular importance, as entities are going to be completing their final submissions for the full 3-year 2015-2017 triennial period.
  • The backlog of compliance credits awaiting issuance held relatively steady from August to September. Most credits in the backlog are from forestry projects.  Many of these have been in the queue for an extended period of time.  For example, one particularly large project, the Finite Carbon Ahtna Native Alaskan Improved Forestry Management project was issued 14.86 million ROCs by the American Carbon Registry on 12/10/2017, and these ROCs are still awaiting ARB approval nearly 11 months later.

ClimeCo Corporation is a respected project developer, advisor and trader of environmental commodity market products. Specialized expertise in regional criteria pollutant trading programs, California cap‐and‐trade, voluntary markets and project development and financing of internal CO2 abatement systems complement ClimeCo’s diverse commodity portfolio. Within the Climate Action Reserve, ClimeCo is the largest developer of U.S. GHG‐offset projects and producer of U.S. voluntary carbon offsets, managing projects that reduce more than four million tonnes of CO2e per year. For information, contact 484‐415‐0501 or nmarshall@climeco.com.

Offset Pricing Monthly Market Digest – December 2018

Offset Pricing Monthly Market Digest – August 2018

Offset Pricing Monthly Market Digest – August 2018

Offset Supply Information:

All CCOs issued to date: 116.71 million
Compliance credits awaiting issuance: 33.39 million

CA and General Market Commentary

Offset prices climbed in August even further to historically elevated levels, but with an important caveat- the prices shown for offsets above are for offsets that can be delivered before the November 1st triennial compliance deadline. This year is of particular importance, as entities are going to be completing their final submissions for the full 3-year 2015-2017 triennial period.

On September 4th, ARB released their Proposed Amendments to the Cap and Trade Program. Included in this release were minor changes to the process for registering and issuing offset credits and some significant changes related to Allowances.  In particular, ARB has introduced new mechanisms to protect against rapid increases in compliance prices.  ARB proposes a price ceiling which starts in 2021 at $65, and two Reserve Tier price levels that we refer to as “speed bumps”, which begin in 2021 at $41.40 and $53.20.  Reserve Tiers are prices at which the ARB would inject additional allowances into the market, via a special auction.  The Reserve Tiers, and the ceiling, effectively attempt to set maximum price expectations in the program for the period 2021-2030.  Both the Reserve Tiers and the Price Ceiling, escalate at 5% per year plus CPI-U, in line with the escalation of the auction price floor.

ClimeCo Corporation is a respected project developer, advisor and trader of environmental commodity market products. Specialized expertise in regional criteria pollutant trading programs, California cap‐and‐trade, voluntary markets and project development and financing of internal CO2 abatement systems complement ClimeCo’s diverse commodity portfolio. Within the Climate Action Reserve, ClimeCo is the largest developer of U.S. GHG‐offset projects and producer of U.S. voluntary carbon offsets, managing projects that reduce more than four million tonnes of CO2e per year. For information, contact 484‐415‐0501 or nmarshall@climeco.com.

Offset Pricing Monthly Market Digest – December 2018

Offset Pricing Monthly Market Digest – July 2018

Offset Pricing Monthly Market Digest – July 2018


Offset Supply Information:
All CCOs issued to date: 113.63 million
Compliance credits awaiting issuance: 32.71 million

CA and General Market Commentary:
• Offset prices have continued to remain at historically elevated levels, but with an important caveat- the prices shown for offsets above are for offsets that can be delivered before the November 1st triennial compliance deadline. This year is of particular importance, as entities are going to be completing their final submissions for the full 3-year 2015-2017 triennial period.

• ARB’s backlog of Registry Offset Credits (ROCs) increased slightly in July. Issuances in July continued to be modest. Several very large forestry projects have remained in the queue for an extended period.

• ClimeCo has again increased its estimate for the 2019 CA Auction Floor price for Allowances up to $15.68. This upward revision reflects recent US data showing that the CPI-U is on pace to be 2.8%-3.0% during the 2017-2018 period. The CA Allowance auction floor price escalates each year at the rate of 5% plus CPI-U.

ClimeCo Corporation is a respected project developer, advisor and trader of environmental commodity market products. Specialized expertise in regional criteria pollutant trading programs, California cap‐and‐trade, voluntary markets and project development and financing of internal CO2 abatement systems complement ClimeCo’s diverse commodity portfolio. Within the Climate Action Reserve, ClimeCo is the largest developer of U.S. GHG‐offset projects and producer of U.S. voluntary carbon offsets, managing projects that reduce more than four million tonnes of CO2e per year. For information, contact 484‐415‐0501 or nmarshall@climeco.com.

Sources

The definitions in this glossary have been reprinted or adapted from the EPA Climate Change Glossary and the Climate Action Reserve Dictionary.

 

Additional Resources

Energy Information Administration’s Energy Glossary

EPA Overview of Greenhouse Gas Emissions

FEMA Extreme Heat Glossary

IPCC Fourth Assessment Report Working Group 1: The Physical Science Basis

IPCC Fourth Assessment Report Working Group II: Impacts, Adaptation, and Vulnerability

National Weather Service Glossary

NASA’s Earth Observatory Library

UNFCCC glossaries