Murray slyly claims of California: "Most allocations expire after three years, meaning the majority of the excess permits in the joint market will be gone by 2018 when Ontario joins."
and yet... the only reason California finally sold the allocation of permits up for auction in its last auction of 2016 (at minimum price) is demonstated in this report from Utility DIVE: "To address allowance over-supply issues, the proposed amendments to the program would clarify that businesses can use current allowances to cover their emissions after 2020..."
If they expired they were worthless - but extended they were valued at the lowest bidding price set for the auction.