** Report Updated on 25th August 2020
CaliforniaCarbon.info analysts have used time-series econometrics to generate a 2030 allowance price forecast and emissions in the California-Quebec carbon market. This report is an update to CaliforniaCarbon.info’s 2030 allowance price and GHG emissions forecast for the WCI carbon market taking the 2018 GHG reported emissions into account, which was released in November 2019. All forecasts are projected into three scenarios of growth: a Reference scenario, an Optimistic scenario and a Pessimistic scenario.

Emissions: Our annual emissions forecast suggests there will be an overall decline in emissions of 1.33 MMT from 2018 to 2019. The following three sectors will witness a decline in emissions over 2018-2030: Electricity Importers, Natural Gas Suppliers and Fossil Fuel Electricity generation. 

Demand and Supply: As per our forecast model, California Carbon Allowance (CCA) annual shortage will trigger in 2020 in both base and high emissions scenarios. Although, in the case of low emissions scenario, CCA annual shortage will occur in the following year: 2021. We expect a cumulative shortage of 360.6 million allowances in the year 2030.

Prices: According to our base case emissions scenario, there would be a cumulative shortage in the year 2028. Under a low emissions scenario, lower demand for allowances to meet the compliance obligations will increase the supply. This has a relative impact on prices which would be stable and low until there is a shortage hit in 2028. Modelling under a high emissions scenario, the year 2026 shows a shortage of 37 million allowances causing a price increase.

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