On the heels of a fruitful legislative session, Washington held its first Climate Commitment Act (CCA) allowance auction of 2024 on March 6-an important reminder that while the Legislature is done for the year, our work to implement these landmark laws continues! 

These auctions occur quarterly, with Washington's biggest polluters purchasing allowances to cover every single metric ton of carbon pollution they emit. At last week's auction, polluters purchased all 7,442,241 available allowances, settling at a price of $25.76 per allowance, and-critically-raising an additional $135.5 million for the state to invest in climate action, and $56 million for utilities to invest in electrification and cut costs for ratepayers.

Auctions, allowances, and price fluctuations - oh my! 

This is just the second year of the CCA and some degree of price variation is to be expected. Last year, the price of allowances increased at each auction (starting at $48.50) and ultimately peaked in the third auction ($63.03) before falling back down in the fourth auction of the year ($51.89). These fluctuations were expected and ultimately in line with the first-year trends of both California's cap-and-trade program and the Regional Greenhouse Gas Initiative, and are largely due to the market uncertainty that comes with a new program. 

At this month's auction, prices continued to lower, and settled at a lower price than we saw in the auctions held in 2023. Aside from general fluctuation, other factors could be influencing allowance prices. First, the Department of Ecology is formally pursuing the possibility of expanding its market through linking with the joint California and Québec carbon market. Exploring linkage has always been an intention of the CCA, per statute, and experts predict that this expanded market could help prices level out in the future. Second- prices for this most recent auction were likely suppressed by the uncertainty surrounding Initiative 2117, which would repeal the Climate Commitment Act. We must vote no on this initiative in November, to protect the incredible clean energy and climate investments that are made possible by the CCA. 

A Recap on 2023 Investments

CCA revenue has unlocked unprecedented investment in clean energy programs and projects to address and mitigate the impacts of climate change. Last year alone, the program raised over $1.8 billion and we are already starting to see some exciting projects come online: 

• Community EV charging: $85M to fund nearly 5,000 EC charging stations in 471 locations across the state (KUOW) 
• Port Electrification: $3M of CCA funds to supplement federal funding for electrification infrastructure to help our ailing ferry system. (KNKX)
• Air Quality Improvement in Overburdened Communities: the CCA funded $10M for a new Ecology grant program to address air pollution in overburdened communities, and Ecology is beginning to work with communities to set that program up now. (TCD) 
• For a map of all current projects, check out this new state-led resource!

2024 CCA Investments in WA Communities Totaled $900 million

The 2024 supplemental budget passed by the State Legislature builds on the successes of the biennial budget through investing an additional $900 million to accelerate reductions in climate pollution and respond to the climate crisis. By attempting to repeal the CCA on this November's ballot, Initiative 2117 poses a colossal threat to all of the below-mentioned investments: 

• Protecting student health through zero-emission school buses and building upgrades: The supplemental transportation budget is adding nearly $40 million to the existing zero-emission school bus grant program, in part thanks to CCA funding, to meet the need and demand from school districts across Washington for clean, diesel-free rides to school. The Legislature also invested $45 million in partial CCA funding for school HVAC retrofits, air filtration, and energy efficiency upgrades to protect indoor air quality and improve resilience to increasing extreme weather events. 
• Protecting indoor air quality and cutting pollution through retrofitting multifamily housing: Low-income residents are the least able to transition off gas, and for tenants of affordable, multi-family housing (MFH) it is largely up to building owners to transition to electric and efficient homes and appliances. The legislature invested $55 million in CCA funds for affordable MFH housing incentives for energy efficiency upgrades and electrification retrofits to help families access these home upgrades. 
• Cleaning up "hard to decarbonize" sectors: The supplemental budget included an additional $25 million towards a Commerce-led incentive program to support industrial decarbonization. The legislature also funded multiple studies and programs related to port electrification, including $14 million to add shore power to Terminal 18 in Tacoma. 
• Investing in community-led decarbonization: The legislature created a new community clean energy program, investing $50 million in this uncompetitive source of funding for decarbonization and resilience projects in overburdened communities to ensure all communities can afford and access the benefits of the clean energy transition.

What's Next for the Climate Commitment Act? 

The latest auction kicks off a long list of CCA implementation work this year, including: three remaining CCA allowance auctions, the next of which takes place on June 5th; more CCA-funded grant programs coming online as agencies work hard to staff up and engage stakeholders; continued build-out of the state's air quality work in overburdened communities; and continued outreach and negotiations around linkage with California and Québec. 

We'll keep you updated as this amazing policy continues to make change in our communities!