Department of Ecology News Release - December 20, 2021
Updated: December 19, 2021

Washington inks deal with carbon emissions auction platform

Agreement with WCI Inc. delivers proven auctions system for key climate law


Last week, the Washington Department of Ecology agreed for Washington to join the Western Climate Initiative, Inc., or WCI Inc., and to use the nonprofit’s secure online auction platform for Washington’s new carbon emissions allowance market.

Setting up that auction market is important since the auctions are expected to raise hundreds of millions of dollars that will be invested in reducing emissions and improving Washington's climate resiliency. The market will require a secure and reliable online platform. WCI, Inc., a nonprofit corporation formed by jurisdictions with cap and trade emissions programs, already provides such a platform for California and Quebec’s combined emissions market, as well as for Nova Scotia’s independent market.

“Delivering a secure, reliable auction platform is a critical step in Washington’s work to carry out the Climate Commitment Act and reduce greenhouse gas emissions in our state,” said Luke Martland, who manages Ecology’s work to implement the Climate Commitment Act. “WCI Inc. has a proven platform for providing these services in North America, and using this established service will save time and money as we begin this new program.”

Under the Climate Commitment Act passed earlier this year, Ecology must set up a cap-and-invest program by 2023. That program will set a statewide cap on greenhouse gas emissions, and then gradually reduce the cap to match the emission limits set in state law. By 2050, greenhouse gas emissions are required to fall by 95%, and for the remaining 5% of emissions to be offset.

The law requires businesses and organizations that produce more than 25,000 tons of greenhouse gases a year to obtain emissions allowances for their total emissions. Some categories of emitters are given these allowances at no cost, while others are required to buy the allowances at auction. However a business gets its allowances, they become more valuable over time as the cap declines and the number of available allowances shrinks, pushing these companies to reduce their emissions.

Joining WCI Inc. does not mean that Ecology is linking or combining Washington’s cap-and-invest program with those in California, Quebec or Nova Scotia. Under the Climate Commitment Act, Ecology is required to design the cap-and-invest program in such a way that it can be linked to other jurisdictions. However, any decision to complete a linkage agreement would be distinct from Ecology’s current work to design the cap-and-invest program. Potential linkage decisions would be made only once the program rules are in place, following a process that provides an opportunity for public comment.

WCI Inc.’s board approved the agreement at its Dec. 17 meeting.

Contact information

Andrew Wineke
Twitter: ecologywa