Charges For Greenhouse Gas Emissions Are Set To Be Implemented In Washington State

An auction of greenhouse gas emissions is being held in Washington state this week, marking the first step in a statewide program aimed at reducing greenhouse gases and increasing costs for companies.

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In 2021, Gov. Jay Inslee signed into law the Climate Commitment Act, which established the cap-and-invest program in Washington. Emissions of greenhouse gases are capped statewide under the program. In addition, businesses are required to purchase pollution allowances, which become increasingly expensive and encourage them to reduce emissions.

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According to the new law, businesses that emit 25,000 metric tons of CO2 annually must buy emission allowances at a government auction held by the Washington Department of Ecology. Allowances will be created only to the extent allowed by the program's limit, which will be lowered each year. A cap on the emissions of companies is now imposed in Washington, joining 14 other states who have adopted such a program.

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Last year, Oregon enacted a cap-and-trade program after California became the first state to do so in 2013. California has set a target of achieving an 85% reduction in emissions by 2045, but Washington has set a goal of reducing carbon emissions by 95% below 1990 levels by 2050.

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Clean energy projects and climate-adaptation measures will benefit from the state's auction revenue, which is expected to total roughly $1 billion a year.

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Washington has set the most ambitious binding limits on climate pollution of any state in the country since the program was announced in 2014, said Pam Kiely, associate vice president for U.S. climate at Environmental Defense Fund.

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A regulatory air quality program is also included in Washington’s Climate Commitment Act, along with a cap on emissions, to assist overburdened communities in reducing air pollution. 35% of the revenue generated by the cap-and-invest program must go to communities that are disproportionally affected by climate change.

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A council on environmental justice must also be consulted when imposing policies and spending revenue under the legislation.

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The program will also help reduce local air pollution in communities that have been on the front lines of environmental harms". According to Kiely, the program will reduce climate pollution while providing innovative tools to reduce local air pollution. 

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A cap-and-trade program similar to the one Washington, California, and Oregon use was announced in January in New York. Despite this, some experts argue that these programs are unlikely to be widely adopted nationwide.

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CarbonPlan's Danny Cullenward believes these programs won't be a wave anytime soon.

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"Despite the appeal of market-based climate policies, setting them up is much more challenging in practice," Cullenward said.

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