Climate Commitment Act

The Climate Commitment Act (CCA) caps and reduces greenhouse gas emissions from Washington’s largest emitting sources and industries, allowing businesses to find the most efficient path to lower carbon emissions. This puts Washington on a path to meet greenhouse gas emission limits set in state law.

The CCA also puts environmental justice and equity at the center of climate policy, making sure that communities that bear the greatest burdens from air pollution today see cleaner, healthier air as the state cuts greenhouse gases. Finally, funds from the auction of emission allowances will support new investments in climate resiliency programs, clean transportation, and addressing health disparities across the state.

The cap-and-invest program

In the CCA, the Legislature directs Ecology to develop rules to implement a cap on carbon emissions, including mechanisms for the sale and tracking of tradable emission allowances, along with compliance and accountability measures. We are also required to design the rules to allow for linking the program with similar programs in other jurisdictions.

The emissions cap

• The cap-and-invest program works by setting a limit, or 'cap', on greenhouse gas emissions in the state, and then lowering that cap over time to ensure Washington meets the greenhouse gas limits in RCW 70A.45.020.
• When it launches on Jan. 1, 2023, the cap-and-invest program will cover industrial facilities, certain fuel suppliers, in-state electricity generators, electricity importers, and natural gas distributors with annual greenhouse gas emissions above 25,000 metric tons of carbon dioxide equivalent.
• On Jan. 1, 2027, the program adds waste-to-energy facilities.
• On Jan. 1, 2031, the program adds railroad companies. 

Allowances

• Participating entities must obtain  allowances equal to their covered emissions. Most businesses will purchase their allowances at auction.
• The total number of allowances issued each year will be equal to the 'emissions cap', and will decrease over time to meet statutory limits.
• The Legislature determined that 'emissions-intensive, trade exposed' entities (EITEs), natural gas utilities, and electric utilities should be issued allowances at no cost. Businesses can also buy and sell allowances on a secondary market, like stocks.

Auctions

• Businesses that participate in the cap-and-invest program will be able to buy emission allowances at quarterly auctions hosted by Ecology.
• Participants must first register with Ecology. Then they must provide information about their corporate structure and affiliations to make sure the marketplace is fair, safe, and transparent.
• To create a sustainable auction model, Ecology is proposing floor and ceiling prices for allowances in current rulemaking for Chapter 173-446 WAC. The proposed rule language also includes frontloading the Allowance Price Containment Reserve (APCR), a mechanism designed to prevent allowance prices from going too high.
• The floor and ceiling prices were informed by an independent analysis conducted by the modeling firm, Vivid Economics, which studied the economic impact of different auction structures.
• Learn more about the analysis:
  • Economic and Market Modeling and Analysis draft report (released July 1, 2022)
  • Video summary
  • Foreword to the draft report

Offsets

• A portion of a facility’s compliance obligation can be covered by credits generated by projects that reduce, remove, or avoid greenhouse gas emissions, called offset projects. Covered entities can meet up to 5% of their obligations with offset credits through 2026, and 4% from 2027 to 2030. 
• An additional 3% of a facility’s compliance obligation through 2026 can be met through offset projects on Tribal lands, decreasing to 2% from 2027 to 2030. 
• To qualify under the CCA, offset projects must result in greenhouse gas reductions that are real, permanent, quantifiable, verifiable, and enforceable. They must also be in addition to emissions reductions that are required by law.

Promotes environmental justice and equity

The Climate Commitment Act aligns with the requirements of the Healthy Environment for All (HEAL) Act and includes provisions to promote environmental justice and equity, including:

• Requires the Environmental Justice Council to make recommendations to the Legislature on projects funded by the CCA, and requires agencies allocating funding from CCA accounts to report their progress toward environmental justice goals to the council.
• Expands air quality monitoring in overburdened communities
• Requires an environmental justice review every two years starting in 2023 to evaluate whether criteria pollutants and greenhouse gases are being reduced
• Requires Ecology and local clean air agencies to adopt additional measures if emissions do not decrease

Generates revenue for tackling climate change and promoting resilience 

Proceeds from the auction of allowances must be used for clean energy transition and assistance, clean transportation, and climate resiliency projects that promote climate justice, including dedicating a minimum of 35% of funds toward overburdened communities and a minimum of 10% toward Tribal projects.

Tribal grants

The Tribal Carbon Offset Assistance Grant provides funding for Tribes to plan, design, and assess the feasibility of carbon offset projects on federally-recognized tribal lands in Washington. A total of $5 million is available through this grant program. Learn more about this grant and how to apply.

The Tribal Consultation Grant provides funding for eligible Tribes to consult on spending decisions from accounts created in the CCA. Learn more about this grant and how to apply.

Proposed rulemaking timeline

We are working on three separate rulemakings to implement the Climate Commitment Act. To stay informed about each rulemaking, sign up for email updates. See the proposed timeline for these rulemakings.