InSights

The offset program has proved one of the more contentious aspects of the WCI Cap-and-Trade market opening in California and Quebec. A rich insight, telling data visualisations, and insider opinion regarding the dynamics in both supply and demand of the market history from 2013-2020. This report is also one of the first publicly available studies to comprehend and analyze the upcoming impact of AB398. This will guide you through the extent of this change and highlight the lucrative opportunities emerging in this new market setting.

Oregon has recently passed a legislation which marks its proposed entry into the Cap and Trade program to achieve its climate objectives holding the economic idea popularly known as the ‘Polluters Pay Principle’. Here the costs are basically environmental costs with respect to the amount of CO2 emissions released into the environment.

Using time-series econometric analysis, it is expected that the greenhouse gas emissions from the covered sectors is likely to decrease from 340.3 MMTCO2e in 2015 to 322.4 MMTCO2e , 309.9 MMTCO2e and 297.5 MMTCO2e in 2020, 2025 and 2030 respectively. It is expected to decrease at a higher rate post-2020 keeping macro economic growth, industrial growth rate, technological advancement and proposed sector specific emissions reductions target in mind. The joint California-Quebec-Ontario allowance market is expected to remain oversupplied through 2020. Annual surplus turns into annual shortage in 2019, but average allowance prices move significantly away from the floor only after cumulative allowance shortage comes into play. With cumulative shortage in the range of 396 to 811 million tons, the 2030 allowance price is expected to significantly exceed the reserve price (US $30.77), in the range of US $91 to US $111 under different emissions and supply scenarios. Ontario is expected to face annual shortage from 2018 onwards and thus expected to be a net importer of compliance instruments from the other WCI members