Washington’s carbon emissions allowances reached their highest auction price of the year last week, one month after voters overwhelmingly affirmed keeping the state’s cap-and-invest program.
Carbon-emitting corporations, including oil companies, bid every three months on state allowances for their pollution emissions. The money raised in the auctions pays for programs to decrease or mitigate pollution.
Last week, the state received $40.26 per allowance during the bidding on 7.98 million allowances. The range for the first three quarters of 2024 was $25.76 to $29.92 per share.
Despite bouncing back from depressed numbers earlier this year, December’s auction price was still lower than at this time in 2023, and this year’s range is lower than last year’s range of $48.50 to $63.03 per share.
Meanwhile, the state also sold roughly 2.22 million future allowances at $26 each to be redeemed later this decade.
Critics of the cap-and-invest program claimed that the lower 2024 bids were due to uncertainty over November’s results of a voter initiative to repeal the program. Initiative 2117 failed 38% to 62%.
While program critics have blamed the state’s relatively high gasoline prices on the carbon tax that has been in place for two years, multiple factors have affected gas prices, and Washington’s gasoline prices have been among the highest in the nation for decades.
The average price of a gallon of gas in Washington on Wednesday was $3.95, compared to a national average of $3.02, according to AAA. A year ago, Washington’s average cost per gallon was $4.275.
December’s carbon auction raised $379.3 million for Washington, meaning the state received $1.13 billion in 2024. That money — plus roughly $1.5 billion collected in 2023 — goes to numerous state environmental, health, transportation and other programs. Those programs appear to have been a major factor in Washingtonians’ vote last month to keep cap-and-invest.
Washington has been talking with California and Quebec, which also have cap-and-trade programs, to create a three-party alliance that could decrease and stabilize auction prices.
Correction 10:56 a.m. Dec. 12, 2024: An earlier version of this story omitted the sales future allowances, and incorrectly listed the totals of how much the auctions raised. This story has been corrected.
