Washington’s Climate Act Revenues Invested Nearly $500 Million in 2023-2024 for Projects Statewide

The Washington Department of Ecology released a new report detailing the distribution of $472 million of 2021 Climate Commitment Act investments among 37 state agencies. The agencies used the funds to support projects such as habitat restoration, clean energy, and energy bill assistance from Jul. 1, 2023, to Jun. 30, 2024. These projects have the potential to reduce over 335,000 metric tons of carbon dioxide equivalent.

The 2021 act established the cap-and-invest program, a market-based incentive to reduce greenhouse gas emissions in the state. The department sells emissions allowances at quarterly auctions for regulated entities to cover their emissions. The state uses the revenue from these carbon auctions to fund projects to reduce pollution and mitigate the effects of climate change in vulnerable communities. Washington voters on Nov. 5 rejected Initiative 2117, a ballot measure that sought to repeal the 2021 Climate Commitment Act, which established the cap-and-invest program, a key component of the state’s efforts to achieve emission limits set in law and progress toward net-zero carbon emissions by 2050.

The department will hold its eighth greenhouse gas allowance auction, which will offer allowances for current and future years. The current auction will offer 2023 and 2024 allowances totaling nearly 8 million and the advance auction will offer 2027 allowances totaling about 2.2 million. A summary report is expected to be released on Dec. 11. At the previous auction, allowance prices settled at $29.88 per allowance.

The act also directs the department to submit an annual report on revenue distribution. During the fiscal year 2024 reporting period, 37 state agencies received a total of $3.2 billion in appropriations, of which almost $473 million was spent.

At the 2024 legislative session, the Washington legislature identified around $645 million that could not be spent until January of next year as the results of Initiative 2117 were still pending. The initiative called for the repealing of the CCA and preventing state agencies from using the cap-and-trade system to reduce carbon emissions. As the initiative failed, agencies will have until June 2025 to spend these appropriations.