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2ND CCA AUCTION RAISES REVENUE FOR STATEWIDE CLIMATE PROGRAMS
Today’s Auction Results Validate Cap on Carbon Emissions
The landmark Cap-and-Invest Climate Commitment Act (CCA), which officially became law in January of this year, held its second quarterly “emissions allowance auction,” on May 31 with revenues revealed today for climate-resilience programs, and clean energy/clean transportation projects in communities across Washington state.
“On a day when virtually the entire country of Canada and the East Coast of the United States is experiencing its worst air quality in memory, it’s important to center the results of our carbon auctions on the strength of this climate policy,” said Clean & Prosperous Washington board member and former state Senator Reuven Carlyle, the primary author of the CCA. “Our state has chosen a path of climate action.”
“Today’s second auction results show an emerging pattern of success where the marketplace is validating a firm cap on carbon emissions as an effective tool to fight climate change,” Carlyle continued. “This climate policy allows flexibility for large emitters to responsibly decarbonize in the most economically efficient way for their company or organization. It’s not a top down, one-size-fits-all regulation.”
“We believe the marketplace recognizes that our state’s cap & invest program is working as intended to accelerate decarbonization,” said Michael Mann, Clean & Prosperous Executive Director. “Since this is a new market, we generally expected the reserve ceiling to be reached as large carbon emitters begin to strengthen their decarbonization plans by including more renewable energy, building efficiency, transportation electrification and more.”
The money raised from the auction pays for direct, high value public benefits including incentives for electric trucks, new hybrid ferries, job training, thousands of new electric charging stations, sustainable aviation fuel, tribal community investments, fish passages for salmon, dairy digester projects and more.
Additionally, Washington is considering linking its Cap-and-Invest carbon market with those in California and Quebec to moderate allowance prices while enabling increased market efficiency. “California and Quebec’s markets are considerably more mature – selling allowances for a decade, raising and reinvesting tens of billions of dollars to date, bringing prices down as intended,” added Carlyle.
The Cap-and-Invest program sets a limit, or cap, on overall carbon emissions in the state and requires businesses to obtain allowances equal to their covered greenhouse gas emissions. These allowances can be obtained through quarterly auctions hosted by the Department of Ecology, or bought and sold on a secondary market (just like stocks and bonds). The cap will be reduced over time to ensure Washington achieves its 2030, 2040, and 2050 emissions-reduction commitments, which means the state will issue fewer emissions allowances each year.
ADDITIONAL INFORMATION ON SECOND AUCTION:
- Total raised from May 2023 auction = $557 million
- $50.48 weighted average of all allowances sold in May auction
- “Consigned” allowances from natural gas suppliers (required by law) and possibly, electric utilities (voluntary) have not yet entered the market but will in subsequent auctions.
- Clean & Prosperous Institute estimates 5.35M consigned allowances for natural gas suppliers in 2023. Ecology can apportion those across the auctions in a manner they believe works best.
- The soft cap for CCA auctions was triggered, as the current year settlement prices exceeded $51.90. To mitigate costs, the CCA provides for additional volumes of “Allowance Price Containment Reserve” allowances (up to 9.3M) to be sold in the August quarterly auction.
Additional information and other updates can be found at Clean & Prosperous Washington. Media, please contact Lee Keller for interviews at 206.799.3805 or firstname.lastname@example.org.
More About Clean & Prosperous Washington
Clean & Prosperous Washington is a team of business leaders working with labor, tribes, environmental organizations, and social justice advocates to enact smart climate policies in Washington state. Together we are driving down greenhouse gas emissions while working to improve health and job outcomes, propel a stronger, more globally-competitive economy, and serve as a beacon of best-in-the-nation climate action for other states to emulate. The CaPWA coalition proved effective in helping the cap-and-invest Climate Commitment Act (CCA) win passage in Olympia, and is now actively helping to implement the CCA as the cornerstone of an entire suite of environmental laws including the Clean Fuel Standard and the HEAL Act – Healthy Environment for All. CaPWA brings an action-oriented, data-driven, strategic business approach to moving public- and private-sector climate work forward with urgency.