California held its first carbon auction Nov 14 and it seems to have been a success. According The California Air Resources Board the first auction attracted lots of participants, all the greenhouse gas allowances available (23 million allowances) were sold in about three hours and were sold for slightly more than the opening price of $10 per ton of carbon. And the state has raised $233 million.
AB32 is the legislation that mandated carbon trading for about 350 companies in California. In the first two years 90 percent of the credits will be free. In other words, based on their emssions history companies will get 90% of their emission allowances for free from the state. But by 2016, all allowances will be sold.