California carbon prices ride policy rails for years — until supply and demand start to bind in the 2030s.

The auction floor, the reserve-price (APCR) tiers and the ceiling are the rails this market trades on. For years the price simply tracks them; only when the bank draws down far enough does supply and demand start to bind and pull prices up the rails — bounded, in the end, by what carbon can politically add to a gallon of gasoline.

ICE Dec-26 · updated daily

$33.09

California Carbon Allowance ($/tonne)

●●● over the floor

Price forecast — probability fan

3,000 probability-weighted runs across the bank, abatement, MDI, offset, CCS, linkage and recession assumptions.

Nominal $/allowance. The band is widest in the late-2020s — the open question is when the market tightens — then narrows through the 2030s as policy limits clamp the range.

Median (P50) Base case P25–P75 P10–P90

Key figures & milestones

How we compare

Our house view against CARB’s own average, ClearBlue, and the regulatory floor.

Where we sit in the full range of the official record — from EDF/Greenline at the floor to CARB’s own UC Davis model near the ceiling.

How we compare — seven forecasters

Our forecast benchmarked against UC Davis, CARB, ClearBlue, Québec, Cullenward, DOF and EDF/Greenline — with the gap to each explained.

What drives it 🔒 Client detail

The forecast turns on a handful of assumptions. The specifics — and the ability to change them — are for clients.

The cap cut −000 Mt

The adopted path removes allowances from 2027–30 budgets, steepening the annual decline. Cumulative 2027–45 supply falls to a level set in our assumptions register.

MDI reserve +000 Mt

The industrial decarbonization reserve adds allowances back above the cap. Our release share, timing and demand effect are model assumptions.

The bank ~000 Mt

The private bank is the shock absorber. Its starting level and the floor it defends set the timing of reserve reliance.

Affordability ceiling $0/gal

A political limit on combined CCA + LCFS pass-through to pump prices caps the forecast below the nominal reserve ceiling.

Assumptions & methodology

The bank level, abatement, MDI release, offset treatment, the marginal-cost backstop and the affordability limits are proprietary — and fully adjustable in the client model.

Alpha View Mechanics 🔒 Client detail

The full price-case logic — and the scenarios you can run against it.

Rails, not a clearing price. Price sits over the forward floor while the bank is ample; it only leaves the rail when the bank thins.

APCR shadow release. When the bank hits its floor, the shortfall is met from the reserve tiers in turn — the ceiling essentially never.

Marginal-cost backstop. As carbon capture becomes commercial it caps the upside through the 2030s, so the peak fades rather than running away.

Floor behaviour post-2040. The floor’s path changes once the abatement curve takes over and the program behaves more like a tax.

Washington linkage. Modeled across candidate years with a capped, declining net effect on the combined pool.

Offsets as supply. Treated as a net-positive supply source on our assumptions, pushing the squeeze out.

Run your own scenarios

Clients dial every assumption and re-solve the balance and price live:

✓Recession — short or long, any year
✓Washington links 2027 / 28 / 29
✓MDI release 0–100%, any weighting
✓Aggressive load — data centres, EV, electrification
✓Bank & abatement sensitivity
✓Custom Monte Carlo + Excel export

● Client access

Run your own scenarios. Pull the model.

The public view above is our base case. Clients get the full interactive model — change any assumption and watch the balance and price re-solve, then export it.

✓Scenario editor — bank, abatement, MDI, offsets, CCS, recession, Washington-linkage year
✓Year-by-year supply / demand / bank / APCR tables
✓Downloadable Excel model with live formulas
✓Monte Carlo fan on your own assumptions
✓Weekly refresh — prices, budgets, macro
✓CA + Québec + Washington integrated balance