Last week the California Air Resources Board (CARB) issued an update to its November 19, 2012 report summarizing the results of the State of California’s first auction of greenhouse gas emissions allowances. The results in the initial November 19 summary report included submitted bids that CARB disqualified for failing to comply with the auction rules and limits on bidding. The summary statistics in the December 6 report now include only qualified bids that met the holding limit, purchase limit, and bid guarantee requirements.

The updated CARB report states that “a very small number of auction participants exceeded their purchase limit, holding limit, or bid guarantee,” and that the exclusion of these bids resulted in an adjustment of the ratio of total bids to the total number of 2013 allowances from 3.10 to 1.06. It is difficult to understand how CARB considers a ratio drop of 3.10 to 1.06 to be “very small.” In effect, CARB disqualified two-thirds of the bidding demand.