By Brett Davis
(The Center Square) – Washington state’s inaugural auction of emissions allowances under the cap-and-trade program established by the Climate Commitment Act brought in just under $300 million, according to a Monday report from the state Department of Ecology.
“The Washington Department of Ecology confirmed that a total of $299,983,267 was raised through the sale of carbon allowances at the state’s first cap-and-invest auction, held on Feb. 28,” a department news release reads. “Now that financial transactions for successful bids have settled and funds have been deposited in the state treasury, Ecology confirmed the total revenue in a Public Proceeds Report, posted to its website at noon today, March 28.”
The news release goes on to note, “All 6,185,222 available allowances were sold at a final settlement price of $48.50.”
Per the Climate Commitment Act passed by the state Legislature and signed into law by Gov. Jay Inslee in 2021, Washington’s cap-and-trade program requires emitters to obtain “emissions allowances” equal to their covered greenhouse gas emissions.
Similar to stocks and bonds, these allowances can be obtained through quarterly auctions hosted by Ecology.
“Truthfully, we didn’t have any particular expectation for the auction,” Claire Boyte-White with Ecology’s Climate Commitment Act Implementation Group told The Center Square via email. “We were very pleased that it went off without a hitch and that there was strong participation. Most of the allowances went to businesses covered by the program, rather than to investors, and our independent market monitor confirmed that it was a competitive market with strong demand across sectors. We’re also pleased that the auction raised critical revenue that will be used to fund important climate work throughout the state.”
She added, “That being said, it’s important to note that this is one data point and can’t be extrapolated out to project potential revenue in the future. We would expect both prices and participation to ebb and flow over time, just as has been the case in California.”
Money raised from the auctions goes to the Legislature, which intends to spend it on programs mitigating the effects of climate change, as well as clean energy programs.
Future auctions for 2023 are scheduled for May 31, Aug. 30, and Dec. 6, according to Ecology.
Brett Davis is a staff reporter for The Center Square.
Originally published by The Center Square. Republished with permission.
To read about Washington’s cap-and-trade program, click here, and here.
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