Last week, California held its first auction of greenhouse gas pollution allowances, and the results are in.
Even though companies ended up paying just a few cents over the minimum price for each ton of carbon, the state pulled in $290 million in revenue.
23.1 million allowances for 2013 were sold at $10.09 each - the minimum price was $10. It also sold 14% of allowances for 2015.
Despite the low price paid, the auction demonstrated the start of a competitive market, because all allowances for next year are sold out.
After the announcement of the auction results, some firms said they would now be willing to invest in clean energy projects in the Golden State.
"This does make me want to invest more in California and send more of my companies there," said Robert Day, partner at Black Coral Capital, a private equity firm that focuses on the clean-tech and renewable-energy sectors.
350 companies participated in the auction, which own about 600 facilities in the state.
To get the cap-and-trade program off the ground, California decided to give 90% of allowances for free to polluters. If they exceed the carbon cap, however, they will have to buy credits.
It's kind of amazing that $10 buys the right to emit one metric ton of greenhouse gases, but as an example, cement maker CalPortland expects to emit a million tons of greenhouse gases this year. A typical passenger vehicle emits about 5 metric tons per year.
Learn more about California's cap-and-trade program: