Ontario's second cap-and-trade auction sold out of its current allowances this month, bringing the program's total revenue so far to nearly $1 billion.

The June auction in the system aimed at lowering greenhouse gas emissions follows the inaugural one in March, which also sold out.

Environment Minister Glen Murray said the results show Ontario's carbon market is working and that businesses are engaged in it.

"The real measure of the market's success is the reduced pollution guaranteed by the end of our four-year compliance period through our cap on emissions," he said in a statement.

The system puts caps on the amount of pollution companies in certain industries can emit, and if they exceed those limits they must buy allowances at auction or from other companies that come in under their limits.

The first auction in March brought in $472 million and the June results, released Tuesday, show the second auction brought in about $504 million.

That puts the province on track for the $1.8 billion the Liberal government expects to come from the quarterly auctions this year. Projections were recently revised downward for subsequent years, with the government expecting about $1.4 billion annually, assuming the auctions sell an average of 80 per cent of allowances.

Revenues are being put toward green projects, such as a $200-million fund that Premier Kathleen Wynne announced Tuesday would be established for schools to improve energy efficiency, such as installing new windows, lights and furnaces.

Demand appears to have increased from the first auction to the second, with about 22 per cent more bids than available allowances, up from the first auction that was 16 per cent oversubscribed.

At the second auction, the settlement price was $18.72 per allowance, compared to $18.08 in the first auction.

Sales of future vintage credits also increased. In addition to current allowances, bidders could also purchase credits for the year 2020, sales of which an analyst said show confidence in the longevity of the market.

"Either businesses are expecting they'll need those allowances to cover their emissions, or that they'll be cheaper now than they will be in the future, or that they will actually be able to save them and bank them past 2020," said Erica Morehouse, a senior attorney for Environmental Defense Fund.

In the first auction about one quarter of the future allowances were sold, compared to more than half in the June auction.

Ontario intends to link its market in 2018 with a joint California and Quebec one. The latest auction in that market also sold out, a stark improvement from the previous one in which only 18 per cent of its offerings sold.

"Since those results are tracking pretty closely (with Ontario's) it seems like there's an expectation from the market that California, Quebec and Ontario will keep moving towards a linkage in the future," Morehouse said.

Since Jan. 1, cap and trade has added 4.3 cents per litre to the price of gasoline and about $80 a year to natural gas home heating costs, in addition to indirect costs that will be passed onto consumers.

The next auction is set for Sept. 6.