California launches carbon permit auction as carbon dioxide levels in atmosphere reach 800,000-year high

California launched its first-ever carbon permit auction in a bold effort to reduce carbon emissions while shielding residents from the costs of moving toward a non-carbon economy.

All of the 23.1 million permits offered at the auction to cover 2013 emissions were bought, raising $233 million. The money will be given to the state’s utility companies, which must use it to protect ratepayers.

The state’s carbon auction is a key step in the initiation of its “cap-and-trade” program, a policy where the state sets a limit, or cap, on the amount of heat-trapping gases released by manufacturers, oil refineries, electric utilities and other large emitting businesses.

Those companies can then either reduce their emissions or purchase carbon permits, also known as “allowances,” on the open market from companies that have extras – the “trade” part of cap and trade. The number of allowances in the system will decline over time.

The goal of the cap-and-trade system is to use market mechanisms to reduce greenhouse gas emissions. Thirty European countries have been using it since 2005, and markets are operating or in development in Australia, China, Japan, Kazakhstan, New Zealand, Quebec and South Korea.

The World Meteorological Organization (WMO) reported this month that atmospheric volumes of greenhouse gases blamed for climate change hit a new record in 2011.

The volume of carbon dioxide (CO2), the primary greenhouse gas emitted by human activities, reached 390.9 parts per million (ppm), 40 percent above the pre-industrial level.

Fossil fuels are the primary source of about 375 billion tons of carbon that has been released into the atmosphere since the industrial era began in 1750. There is now more CO2 in the atmosphere than at any time in the last 800,000 years.

There is wide consensus among scientists that global warming due to carbon emissions will increase both droughts and flooding, cause massive population displacements as oceans rise, disrupt food production, and contribute to widespread species extinctions.