Washington state held its first cap-and-invest auction on Feb. 28, marking a historic moment in the state’s efforts to reduce greenhouse gas emissions and transition to a clean energy future. Information from the auction is now published online in an Auction Summary Report, following validation by staff at the Washington Department of Ecology and an independent market monitor.
During a three-hour bidding window, all 6.18 million allowances available were sold at a settlement price of $48.50, generating critical revenue that will be invested by the Legislature in clean energy projects and programs to support communities affected by climate change and air pollution. The settlement price (when adjusted for inflation) is in the range projected by an independent economic analysis commissioned by Ecology last summer.
“This is truly historic for Washington and for the global movement toward a low-carbon future," said Washington Governor Jay Inslee. "The costs of climate change are coming to bear on families and communities, and industry plays an important role in the transition away from carbon. This cap-and-invest system is crucial to our approach to addressing climate change, and we are very encouraged to see this program starting off so well."
The cap-and-invest program is the cornerstone of Washington’s Climate Commitment Act, which the Legislature passed in 2021. The cap-and-invest program places a limit on the amount of carbon pollution that can be emitted by certain industries, requiring businesses with high emissions to purchase allowances to cover their carbon output. The number of allowances available will be gradually reduced, encouraging companies to invest in cleaner technologies and processes.
"With the cap-and-invest program now fully underway, we can begin providing critical support for reducing emissions in our state, and helping communities deal with and prepare for the effects of climate change," said Laura Watson, Ecology’s director. “This sends a powerful message to the nation and world that bold action on climate change is both necessary and achievable."
Once all financial transactions for successful bids have been completed, the total amount of revenue raised in the auction will be confirmed in a separate Washington Auction Public Proceeds Report, to be published March 28.
More information on Washington's cap-and-invest program and quarterly allowance auctions can be found online.