Prices for air pollution allowances under Washingtonòòò½ÊÓƵ™s cap-and-trade law climbed again at the stateòòò½ÊÓƵ™s first auction of the year.
The Department of Ecology on Wednesday said allowances the state offered on March 5 sold for $50 each. Thatòòò½ÊÓƵ™s about 24% higher than the $40.26 sale price at the previous auction in December. The latest sales will net another $230 million for the state.
Itòòò½ÊÓƵ™s the second auction in a row where prices were up, following a slump before voters rejected a ballot measure last year that could have repealed the law. Prices last September fell below $30 after rising above $50 and even $60 in some cases the prior year.
Since the auctions under the Climate Commitment Act began in 2023, theyòòò½ÊÓƵ™ve generated about $2.8 billion in state revenue. Businesses in Washington that produce large amounts of carbon emissions must meet a cap on that pollution set by the state or purchase the allowances.
Rebounding prices will be welcome news for Democrats in the Legislature who are grappling with a shortfall in the stateòòò½ÊÓƵ™s operating budget estimated to be between $12 billion and $15 billion over four years, along with a $1 billion gap in the next two-year transportation budget.
Thereòòò½ÊÓƵ™s likely to be more debate in the weeks ahead on how to use Climate Commitment Act revenue. Republicans this week proposed diverting a share to fund the Working Families Tax Credit òòò½ÊÓƵ” a tax refund for lower-income state residents. The lead budget writer for Senate Democrats has rejected the idea.