A new effort to fight climate change in Washington state just got a financial boost. Tuesday, the state announcement the results of its first cap-and-invest auction. He raised an estimate $300 million polluting companies to fund projects such as building clean energy, reducing emissions from buildings and transportation, and adapting to the effects of rising global temperatures.
Washington has set a goal to reduce its carbon emissions by 95% below 1990 levels by 2050. In this effort, the state is imposing a statewide carbon emissions limit which gradually decreases over time. Under the cap and invest system, companies buy “allowances” for the greenhouse gases they emit. But these permits will become more expensive over time – both an incentive to reduce emissions and a method of raising money to fight climate change.
At the first Washington auction, held last week, the permits sold for an average of about $49 per ton of carbon dioxide. The price was nearly double that of the most recent cap and trade auction held by California and Quebec, where the average was $28 per ton.
“The auction price is potentially higher because Washington’s program requires stronger climate pollution reductions than anywhere else in the country,” said Kelly Hall, Washington director of the regional nonprofit. lucrative Climate Solutions. “There is strong competition for these allocations.”
The Washington auction, which will take place four times a year, is expected to bring in nearly $1 billion a year. At least 35% of revenues should be directed to projects that benefit communities historically and disproportionately affected by pollution. By the end of April, once the budget process has been ironed out, the state will begin the process of putting these various climate initiatives in place, said David Mendoza, director of public engagement and policy at The Nature Conservancy in Washington. .
The state cap-and-invest system, which began in January, follows in the footsteps of several state and regional cap-and-trade systems — with a few key changes. It relies less on carbon offsets and is also designed to address some equity concerns around cap and trade. In California, for example, studies have shown that pollution in black and Latino communities actually increased over the years since the start of that state’s cap and trade program.
Washington’s system takes the new approach of pairing cap and trade with an air quality regulatory agenda to crack down on large and small sources of pollution in the hardest-hit areas. While the state is still working out the details, last week its ecology department announced that it had identified 16 communities where it plans to focus its efforts to improve air quality. South Seattle, Tacoma and Spokane were on the list, as were some rural areas.
Cap and trade programs are now operational in more than a dozen US states, including Oregon and a regional program in the Northeast. Yet the approach remains controversial. The Washington program has collected reviews for granting a pass to some large emitters, such as oil refineries and paper mills. Although these polluters can purchase allowances at little or no cost for the next twelve years, they are still covered by the program’s declining emissions cap.
The state is currently considering linking its cap and trade program with California and Quebec, which have already joined the markets. In Washington, it is required that they can only link markets if the state determines that doing so will not “negatively impact overburdened communities in either jurisdiction,” Mendoza said.
After studying the potential benefits — and consequences — of linking the programs, the state is expected to issue a recommendation on whether to join the California market by the end of the summer.