Important news from the California Air Resources Board.
Mary Nichols, Chair of the California Air Resources Board, announced at a state Senate panel yesterday that the first auction of greenhouse gas emission allowances would be delayed by 3 months and held in November. This makes sense as no protocols regarding how the auction would be conducted have been released as of yet.
Mary Nichols did state that the California Air Resources Board does intend to hold a "practice auction" in August. The practice auction in August is meant to give covered entities (companies that actually will have to purchase these greenhouse gas allowances) an opportunity to see how the system will actually work.
Since the compliance obligations do not actually go into effect until 2013, pushing back the first actual auction should not cause any real delays to the implementation of the cap and trade program overall. But the need to delay the initial auction does speak to the difficulties of implementing the cap and trade program.
Given the complexity in the program, it likely makes sense for covered entities to participate in the practice round and get their feet wet.