A month after a bruising political battle to extend California’s cap-and-trade program, the state received a big vote of confidence in the policy’s future.

Cap and trade requires oil refineries, food processors and other facilities to buy permits to release greenhouse gas emissions into the atmosphere, and state regulators auction off the permits several times a year.

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Even though the cost of permits has been rising, it may not happen fast enough to provide an adequate financial incentive for companies to clean up their operations, said Danny Cullenward, a Stanford University energy economist.

State regulators should take steps to ensure they’re auctioning the right number of permits because making too many available could allow too many emissions, he said.

“Lurking in the background is a much more serious issue,” he said.

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