California Cap-and-Trade: Positive Market Outlook Ahead of Upcoming Market Reforms
California has long been a national leader in ambitious climate policy, having set its original greenhouse gas (GHG) reduction targets in 2006 and implemented its cap-and-trade program in 2013. Prices for California carbon allowances (CCAs) have moved up strongly in the last two years, though we believe the outlook for continued price gains remains very positive. With the implementation of new market policies that introduce supply-tightening measures and continued allowance demand from steady emissions, we see continued support for the KraneShares California Allowance Strategy ETF (Ticker: KCCA).