Each share of global warming emissions bought and sold on Washington’s upcoming carbon market will cost between $22 and $81, the state said Thursday.
The final price of each credit will be determined by demand in next year’s emissions auctions, a key program in Washington’s efforts to eliminate carbon pollution from its biggest industries.
But, “Everyone pays the same price for stipends,” said Claire Boyte-White, spokeswoman for the Department of Ecology, the state agency responsible for implementing and regulating the program. .
The Climate Commitment Act and its carbon pricing system is one of three major climate policies that will take effect in Washington early next year. The state’s ability to decarbonize by 2050 and leverage federal support to address climate change is highly dependent on the consistency of these laws.
Final preparations are underway in the rules and operations of the state’s carbon pricing program, the second of its kind in the country and a centerpiece of the CCA, which kicks off January 1.
The first auction of emission allowances will take place at the end of February. The exact dates and the number of quotas to be won will be announced in December. A practice auction will take place in January.
Quarterly auctions will take place in February, May, August and November.
Account registration for the auction platform is underway and training on how to use it will begin next week.
Under the CCA, each credit, or “emission allowance,” represents 1 metric ton of carbon dioxide emissions. Allowances are bought and sold at auction, but over time the number of available allowances will gradually decrease.
The resulting price hike is meant to wean polluters off fossil fuels and encourage investment in clean energy.
Revenue from the program, which will be appropriated by the state legislature, is to be spent on operating costs and then invested in vulnerable communities, indigenous tribes and conservation projects.
The program was initially expected to bring in $220 million in the first year, then $500 million per year in subsequent years through 2040. In October, those estimates were revised. Now the state expects to raise $480 million next year, and nearly $1 billion in 2024 and 2025.
CCA covers 75% of statewide emissions.
Under the law, nearly 100 of the state’s biggest polluters are required to cut their emissions 45 percent below 1990 levels by 2030 and eliminate or completely offset them by 2050.
Nearly half of those emitters will receive emission allowances at little or no cost for at least the next 12 years, a concession that critics say cripples the impact of an already controversial climate fix.
The CCA aims to decarbonize entrenched sources of industrial pollution, while the 2019 The Clean Energy Transition Act aims to remove greenhouse gases from state electricity. The clean fuel standard, whose final rules were adopted on Monday, targets the carbon intensity of fuels in the transportation industry, which accounts for the bulk of statewide and global carbon emissions. .
Yet carbon markets are ambitious but aggressive and often elicit as much opposition as support.
Washington voters twice each rejected a carbon tax and cap-and-invest. Lawmakers nevertheless passed the trio of major climate policies taking effect next year.
In a hearing on Friday, the Senate Environment, Energy and Technology Committee met to discuss the final steps before the laws take effect and how these overlapping policies will interact with each other.
“We can grow and we can do it with a lighter touch on Earth,” committee chairman Reuven Carlyle, D-Seattle, said during the hearing. “We need to ensure that this interconnection of these policies supports meaningful decarbonization in the years to come.”
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