The publisher publishes the annual update to its market-leading forecast for WCI Cap-and-Trade. The 2021 compendium combines the latest industrial data across each major sector to give an update on the near-term emissions outlook as the North American economy climbs its way out of the effects of COVID-19. The new report also is sensitive to the change in Federal climate policy after Biden's April announcements.
Our updated forecast finds that WCI 2020 emissions are expected to be slightly higher than earlier predicted in our January 21 model run.
Perhaps most significantly, the analysis includes potential program scenarios and price pathways through to 2050. The 2050 scenarios are built around the targets presented in California and Quebec's Climate Goals. This represents one of the market's first-ever 2050 carbon price forecasts under multiple regulatory and economic scenarios, this sort of time-range will be crucial for long-horizon decision-making for businesses throughout California and Quebec.
This report estimates Californian and Quebec emissions in specific sector and entity-level detail for 2020 and 2021, and in the light of the recent pandemic, it charts the probable pathways back to a more normal level of economic activity. We have also updated the model scenarios to better reflect the new normal which economies may well be heading towards.
The publisher has combined past emissions data with company annual reports and industry-level production data, thus enabling a high degree confidence in accurately predicting the still unannounced 2020 and 2021 emissions. The report is an update to our previous year's effort, adding in new facility production data from 2020 and a revised emissions, supply-demand, and price forecast. We have then combined our 2030 and 2050 Forecast into the report from our general equilibrium model which is explained below.
We have modeled 4 scenarios in this report till 2030 and 5 scenarios till 2050:
- Present Trajectory Scenario
- Off-the Rails (high emissions) Scenario
- Meeting Climate Goals Scenario
- Accelerated Climate Action Scenario
- Delayed Climate Goals Scenario
Table of Contents
Glossary of terms
1 Executive Summary
1.1 Cap-and-Trade Background Brief
1.2 Sectoral Emission Reduction Programs
1.3 Report Results
2 Introduction
2.1 The Global Context
2.2 Legislation in California
2.3 California Covered Emission Trends
2.4 Legislation in Quebec
2.5 Quebec’s Covered Emission Trends
3 California’s Covered Emissions Forecast 2021
3.1 Expectations of 2020 Validated Emissions and 2021 Forecast. 19
3.2 California’s Covered Emissions Forecast for 2020 and 2021
3.3 California’s Overall Emissions
4 California Key Sectors: Review and Forecast
4.1 Transportation Fuels
- Review
- Outlook and Impact of COVID
- Transportation Sector Forecast for 2020 and for 2021
4.2 Natural Gas Suppliers
- Review
- Outlook and impact of COVID
4.3 Refineries and Hydrogen Plants
- Review
- Outlook and Impact of COVID
- Refineries Sector Forecast for 2020 and 2021
4.4 Oil and Gas Production
- Review
- Outlook and Impact of COVID
- Forecast for Oil and Gas Sector in 2020 & 2021
4.5 Fossil Fuel Power Generation
- Review
- Emissions Forecast for 2020 and 2021
4.6 Electricity Imports
- Review
5 Quebec’s Covered Sector Forecast for 2019 & 2020
5.1 Quebec’s Overall Emissions Trajectory
6 Quebec’s Key Sectors
6.1 Transportation
- Review
- Forecast
6.2 Natural Gas Distribution by End-Use
- Review
7 2030 Emissions Forecast
7.1 The forecast is based on CaliforniaCarbon’s model
7.2 Key variables considered for the present forecast
7.3 Covid-19 impact on the 2030 WCI market: excess allowances remain in the market
- Estimate for the Covid relief
7.4 Long term scenarios considered
- Present Trajectory scenario
- Off-the-rails scenario
- Meeting Climate Goals scenario
- Accelerated Climate Action Scenario
- Interpreting the scenarios
7.5 Sectoral Emissions analysis
- Covid-19 shows up again
- Transportation and electricity emissions linked: driven by EVs
- Detailed sector analysis
8 2030 outlook for offsets
8.1 California’s AB398 is reshaping offsets in this decade
8.2 Larger entities are likely to keep using offsets
8.3 Jurisdiction-wise outlook for Offsets till 2030 and role of DEBs and non-DEBs
9 Demand-supply gap of allowances and ‘Tension Ratios’
9.1 The market is sitting on about 490.5 million ‘bank of allowances’ 59
9.2 The demand-supply gap tension has reduced
- Role of Covid-19 (again) and progress in the transportation sector
- Defining Tension Ratios
9.3 The bank will likely start to get depleted in 2023
10 Year wise CCA Price Forecast up to 2030
10.1 Forecasted auction prices
- Model assumes rationality, but markets are irrational
10.2 Drawdown of reserves in comparison with the allowances allocated/sold and offsets issued
10.3 Balances in entity and jurisdiction accounts
10.4 Value of allowances auctioned and offsets bought
11 Crystal Ball 2050
11.1 Assumptions for constructing the post-2030 market
11.2 Observations and key variables at play
11.3 Scenarios till 2050
- Present Trajectory Scenario
- Off the Rails Scenario
- Climate Goals met Scenario
- Accelerated Climate action Scenario
- Delayed Climate Goals Scenario
- Year wise CCA Price Forecast up till 2050
11.4 Drawdown of reserves in comparison with the allowances allocated/sold and offsets issued
12 Variables factored in and key assumptions
12.1 California Allowance Budget till 2030 (million tons of CO2e)
12.2 Quebec Allowance Budget till 2030 (million tons of CO2e)
12.3 Variables taken into account in the forecasting
13 Information sources
- Data sources for Analysis
- About the Publisher
- Disclaimer
