Vox’s Dave Roberts has a long story up on the failure of the California Air Resources Board to address allowance oversupply in the state’s cap-and-trade program:
Concerns about oversupply in the California system have been raised for years, dating back at least to May 2016, when allowance prices collapsed and 90 percent of allowances went unsold. Later that year, Danny Cullenward, policy director at the think tank Near Zero, and Andy Coghlan of UC Berkeley published a paper in The Electricity Journal warning of “structural oversupply.”
The Carbon Market Supply Association warned CARB in September 2016 that oversupply was “as high as 300 million tons.” Warnings were echoed by the LAO (in February 2017 and again in December 2017), Chris Busch at the energy policy firm Energy Innovation in December 2017, the Environmental Commissioner of Ontario (in a January 2018 report contemplating that province’s own carbon pricing system), Near Zero in March 2018 (and many times since; see here for a synthesis), and the Independent Emissions Market Advisory Committee in October 2018.
The entire story is well worth a read.