CLIMATEWIRE | Washington state is set to launch the West Coast’s second carbon market trading program.
The state’s first carbon auction — with bids on pollution permits Tuesday — fulfills a yearslong quest by Gov. Jay Inslee and other Democrats who have struggled to make Washington a touchstone of climate action in the Pacific Northwest.
The auction could raise between $137 million and $504 million largely for climate-related programs, marking the first time that Washington companies would have to pay the state for their emissions. It’s one piece of a broader climate law passed by the Democratic-controlled Legislature in 2021.
Washington state businesses that generate more than 25,000 metric tons of greenhouse gas emissions annually must participate in the state’s new cap-and-invest program. Businesses can reduce their emissions beneath the cap, purchase a limited number of “offsets” in projects that cut greenhouse gas pollution or buy allowances at auction or from other businesses.
Washington’s market is structured similarly to those in California and Quebec, Canada, which hold their quarterly cap-and-trade auctions simultaneously. Washington plans to evaluate whether to link its auctions to other jurisdictions, and aims to make a decision this summer.