Many had hoped that the start of quarterly auctions under California’s new cap-and-trade program would usher in an era of rapid growth for the cleantech sector.
But a pair of lawsuits filed by business groups challenging the program’s validity has cast a cloud of uncertainty over the program, says Morrison & Foerster partner William Sloan. The first two auctions—held in November and February—were important milestones for cleantech, Sloan says, because now there is a clear market price on carbon emissions. That gives entrepreneurs a more direct way to place a monetary value on their innovations for potential customers and investors.
A court decision in favor of the program could provide a real cleantech boost. Also on the sector’s wish list: an expansion by state regulators of the types of carbon-reducing projects–also known as offset projects–that carbon emitters can invest in to help fulfill their compliance obligations.