The Californian Emissions Trading System and Electricity Market

This report analyses the influence of the Cap and Trade (CaT) system and the electricity market in California along two main questions: How do CaT design features affect the environmental effectiveness of the system and the quality of the carbon price signal? How do electricity market design features affect the carbon price induced abatement in the power sector? Based on publicly available data and expert interviews, we derive four main findings on the impact of the electricity market structure on the quality of the California Carbon Allowances (CCA) price.