SPOKANE, Wash. — This week, the Department of Ecology finalized its most recent round of auctions of carbon allowances as part of the state’s Climate Commitment Act.
December’s auction settlement price lies at $40.26, an almost 35% increase from September’s.
Businesses that emit large amounts of greenhouse gases participate in the quarterly auction, the funds generated go towards climate resiliency programs in the state.
“If the price is higher, that means more revenue for the state,” said Caroline Halter, the communications manager for the Department of Ecology. “That means we’re investing in more clean transportation. We’re investing in wildfire prevention, those types of projects that are really important to communities.”
Bids started at $48.50 and peaked at $63.03 the first year. While the initiative was on the ballot and the program was in jeopardy, demand and prices went down.
Now that the initiative failed, prices are back up.
This month, prices are up more than 30% from the last auction.
“Consumers are going to see impacts in the price of fuel and the price of natural gas,” Peter Godlewski, the Government Affairs Director of energy, environment, and Water Policy with the Association of Washington Business said.
The Climate Commitment Act was on the line in the last election with Initiative 2117. 62% of voters rejected the measure that would have repealed the CCA. Climate activists argue Washingtonians made it clear they support these auctions.
While the Washington Business Association is not pushing for an outright repeal, it feels the CCA needs revisions.
“Our specific concern is that it’s happening too fast,” Godlewski said. “These costs are kicking in at way too high of a value for consumers and businesses to adjust to them and not giving them the time or resources to be able to plan out a sort of slower start to this program.”
The Washington Police Center, a think tank says this jump in allowance will equate to a $0.32 increase per gallon for gas. But the Department of Ecology says there are many factors that influence gas prices.
“It’s difficult to determine the exact impact, at least when you’re talking about the price at the pump because we just don’t have insight into all the factors that go into that price,” Halter said.
The next auction is set for March of 2025.
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