Washington Finalizes Regulations to Implement Carbon-pricing Program

The Washington Department of Ecology has finalized regulations to implement the state’s cap-and-invest program, according to a Sept. 29 press release. The initiative is the mainstay of the state’s plan to drastically cut carbon emissions towards achieving carbon neutrality by 2050.

The program aims to deal with the root cause of global warming by reducing carbon emissions, investing in cleaner energy and phasing out fossil-based energy generation systems. In 2020, the state legislature passed a law requiring the state to reduce greenhouse gas emissions by 45 percent in 2030 and 70 percent in 2040 and 95 percent by 2050, relative to 1990 levels. The Climate Commitment Act enacted in 2021 directed the department to implement a cap-and-invest program by Jan. 1, 2023 to decarbonize the state’s economy and improve air quality.

Under the program, entities that account for 75 percent of the state’s emissions must obtain quotas to cover their emissions. Some emission allowances or quotas would be awarded free of charge, while auctions held every quarter beginning mid-February 2023 would be employed to sell the rest. The cap-and-invest program will continually slash allowances to push businesses and organizations to adopt cleaner and energy-efficient technologies to reduce their greenhouse emissions.

Under the program, funds realized would be invested in programs to help local communities deal with the impact of climate change, air pollution and emission reduction programs. The program’s objective is to encourage innovation in emission reduction, incentivize businesses to take steps to reduce their carbon footprints and attach financial costs to greenhouse emissions that contribute to climate change. With the cap-and-invest program, companies and utilities would have to cut back their emissions or buy permits. Overtime, emissions would become more expensive as allowances are capped.