Cap-and-Invest auction revenue

Cap-and-Invest quarterly auctions have generated over $2 billion to date. By law, this revenue must be invested in critical climate and air quality projects throughout the state, prioritizing environmental justice.

Revenue forecasts and investments

Ecology forecasts the amount of revenue we expect auctions to generate.

The Legislature uses those forecasts to designate specific amounts of money for specific purposes through the appropriations process.

Appropriated dollars flow through state agencies to projects around the state. And following each fiscal year, we report back to the Legislature about how auction revenue was invested.

Each forecast is Ecology’s best estimate of future revenue. Actual revenue may be higher or lower, depending on auction prices.

Appropriations are based on Ecology’s forecasts.

Ecology’s CCA spending report to the Legislature: Fiscal Year 2023

Account structure

Auction revenue is held in three primary accounts and four sub-accounts until it’s appropriated by the Legislature. Funds in each of these seven accounts are earmarked for specific types of projects.

A chart of the three accounts and four subaccounts created to house funds from CCA auctions (read more below) — Click to enlarge.

Project types eligible for CCA funding

By law, revenue in each account must be used for certain types of projects.

Carbon Emissions Reduction Account (CERA)

The funds deposited in this account must be used for projects that focus on:

Reducing transportation emissions
Investing in alternatives and reductions to single occupancy passenger vehicles
Investing in emissions reduction programs for freight, ferries, and ports

80% of CERA funds are annually transferred to two sub-accounts, which each focus on a more specific aspect of decarbonization within the transportation industry:

This sub-account focuses on school and alternative transportation projects, including:

Safe Routes to Schools
School-based bike programs
Bicycle and pedestrian grants
Complete Streets grant program
Connecting Communities grant program
Pedestrian, bicycle, or other active transportation projects
Other transit projects identified in an omnibus transportation appropriations act

This sub-account focuses on specialized transit projects, including:

Transit support grants
Tribal transit mobility grants
Transit coordination grants
Special needs transit grants
Bus and bus facility grant programs
Green transit grants
Transportation demand management grants
Other transit projects identified in an omnibus transportation appropriations act

Climate Investment Account (CIA)

Auction revenue deposited in the Climate Investment Account (CIA) is first used to fund the administration of the Cap-and-Invest Program, but these expenses can't exceed 5% of total auction revenue.

Once administrative costs are covered, the remaining revenue is allocated to two sub-accounts focused on projects that increase climate resilience in Washington communities and ecosystems:

This sub-account focuses on projects that support Washington's transition to a low-carbon economy, improve air quality, and increase access to clean energy for Washington residents:

Implementing the working families tax rebate
Reducing greenhouse gas emissions in overburdened communities
Strengthening the air quality monitoring network
Supporting renewable energy technology and infrastructure
Investing in energy efficiency for industry and agriculture
Increasing building energy efficiency and supporting electrification
Supporting appliance energy efficiency
Assisting affected workers during the transition to a clean energy economy
Capturing methane and diverting organics at landfills
Deploying carbon dioxide removal
Supporting efforts to mitigate and adapt to the effects of climate change affecting Tribes

This sub-account focuses on projects that protect fish and wildlife habitats, improve aquatic ecosystems and water quality, and protect against floods:

Restoring and protecting estuaries, fisheries, and marine shoreline habitats
Increasing carbon storage in the ocean or aquatic and coastal ecosystems
Remediating and adapting to the impacts of ocean acidification
Reducing flood risk and restoring natural floodplains
Increasing the sustainable supply of water and improving aquatic habitat
Investing in stormwater infrastructure
Preserving or establishing carbon sequestration in forests and agricultural soils
Protecting or planting trees in marine shorelines and freshwater riparian areas to promote climate resilience
Increasing resilience to wildfires, improving forest health, or preserving natural lands

Air Quality & Health Disparities Improvement Account (AQHDIA)

Funds deposited in this account must be used for projects that address environmental justice and health inequity in the state, such as:

Funding the expansion of Ecology's air monitoring network in overburdened communities highly impacted by air pollution
The development and implementation of strategies to reduce health disparities in those communities

Funding environmental justice

The CCA requires that a minimum of 35% — with a goal of 40% — of auction revenue be used for projects that directly benefit vulnerable populations within overburdened communities. Additionally, 10% of auction revenue must be used for projects with Tribal support. To ensure this happens, the law directs the Environmental Justice Council to provide recommendations to the Legislature on which projects receive funding.

Ecology’s annual report detailing how auction revenue is spent will include information about whether these environmental justice requirements were met. And any agency receiving CCA funding must provide a report to the Environmental Justice Council documenting progress toward environmental justice and health equity goals.