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Price of Allowances Drops 20% from 3rd Quarter

(Seattle, WA) December 13, 2023 – On the same day the world has committed to transition away from fossil fuels at COP28, the state’s leading climate policy, the Cap-and-Invest Climate Commitment Act (CCA), generated another half billion dollars to assist Washington residents and businesses in shifting to cleaner and cheaper transportation fuels.

Regulated parties purchased nearly $500 million allowances in order to comply with our state’s carbon emissions limit.  Closing prices averaged $50.13, dropping over 20% from the 3rd quarter auction settlement price.

“This demonstrates that our carbon market is working,” said Michael Mann, Executive Director of Clean & Prosperous Washington, an organization that worked tirelessly with businesses, environmental groups and others to ensure the CCA passed. “Prices are adjusting to market conditions to ensure our carbon reduction targets in Washington are met at the lowest cost.”

A majority of the money raised (estimated $289 million) in this auction will be used to invest in green energy and energy efficiency.

“These funds are the ‘green power’ Washington needs to lead the country in transitioning away from fossil fuels,” continued Mann.  “They will fund climate-resilience programs and clean energy projects in communities across Washington state.”

Auction proceeds will also be used to reduce energy expenditures for Washington businesses and residents.  Nearly $200 million additional dollars will be directed to natural gas utilities to primarily benefit low-income ratepayers.

“States and regions who are first in this transition away from fossil fuels will be the economic leaders in the clean energy future,” continued Mann.  “Every electric vehicle on our roads, every heat pump in our homes keeps our energy dollars circulating in our local economies and reduces costs for households and businesses.  The Climate Commitment Act is the engine to transition to cheaper and cleaner fuels for all Washingtonians.”

“More than 150,000 Washington residents and businesses are already driving for the equivalent of $1.50 per gallon by driving on electricity,” Mann continued. “We need to SURGE (Strategy for the Urgent Reduction of Greenhouse Gas Emissions) our investment in this transition by giving a sales tax holiday for every purchase of a zero-emission vehicle in Washington state and this funding will allow us to do just that.”

The money raised from the auction pays for direct, high value public benefits including incentives for electric trucks and buses, new hybrid ferries, job training, hundreds of new electric charging stations, sustainable aviation fuel, tribal community investments, fish passages for salmon, dairy digester projects and more.

Additionally, Washington is moving toward linking its Cap-and-Invest carbon market with those in California and Quebec to broaden the market and to facilitate increased market efficiency. California and Quebec’s markets most recently closed at $38.78 per ton.

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.


  • Total estimated raised from December 6, 2023 auction = $481 million 
    • $289 million for state
    • $192 million consigned to natural gas utilities)
    • $50.13 weighted average of all allowances sold in December auction
      • down over 20% from 3rd Quarter Auction
  • “The soft cap (“Allowance Price Containment Reserve”) was not triggered, as the current year settlement prices were below  $51.90.  The total volume of APCR allowances sold in two APCR Auctions this year was 6.05 million, well below the central forecast of the Preliminary Regulatory Analysis (10.3 million forecast).
  • Full year average prices were $53.10.  This is 9% below the primary forecast of the economic modeling in the Preliminary Regulatory Analysis ($58.31).  Prices were lower than the primary forecast despite a lower volume (and higher price) of APCR allowances than originally expected.  This result in the first year of CCA auctions, alongside 2026 Vintage allowances that sold for lower prices twice this year (average of $38.06), indicate that the market is functioning as intended.


Additional information and other updates can be found at Clean & Prosperous Washington. Media, please contact Lee Keller for interviews at 206.799.3805 or

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.



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