Results show that the Cap-and-Invest Climate Commitment Act continues to work for Washington families and businesses.
Allowances sold out, showing continued strong demand. The settlement price, just under $30 per metric ton and nearly identical to the previous quarter’s price, demonstrates continued market stability and is consistent with what has been observed in other carbon markets.
Also encouraging is that this auction price is closely aligned with the most recent price in the California and Quebec market (to which Washington may link).
Revenues raised by this quarterly auction will be invested in projects and programs across the state that clean the air, mitigate climate change impacts, and lower energy costs for families and businesses.
Click HERE for the full Auction #7 Summary Report from the Department of Ecology.
Highlights:
- All 7.9 million allowances sold out at a price of $29.88, nearly identical to the previous auction in June ($29.92). This allowance price is right in line with California and Quebec’s most recent price at the August Auction of $30.24 as the two systems continue to explore the potential of linking their Cap-and-Invest programs.
- Total revenue raised: $157 million for state-directed investments into communities through the seven investment accounts of the CCA. Another $80M in consigned revenue, primarily for specified uses by natural gas utilities, including lowering energy bills for low-income customers.
- There continues to be strong demand at prices above the minimum “price floor” of $24.02, with 20% more bids than allowances available (similar to the 25% and 24% in the first two auctions of 2024).
Much like in other major cap-and-invest programs (see chart below), Year 2 (2024) prices have settled well below the initial peaks of Year 1 (2023) as the program matures and more entities secure enough allowances to meet several years of compliance deadlines (most emissions for 2023 and 2024 require compliance via allowances in November 2027, a mechanism that differs substantially from a direct tax).
