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Feb. 23, 2024

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Here’s how WA spent first sliver of cap-and-trade dollars

The state conducted its last allowance auction of 2023 on Wednesday. A new report sheds light on how the state spent proceeds from earlier ones..


As Washington conducted another sale of pollution credits on Wednesday, a new report shows initial dollars spent from the state’s carbon pricing program bolstering public transit and transportation services.

More than 100 projects received slices of $76.2 million in Climate Commitment Act revenue in the last budget, contributing to a reduction of 191,000 metric tons of greenhouse gas emissions, according to data compiled by the Department of Ecology.

Most of the money was handed out in grants by the state Department of Transportation and Transportation Improvement Board to increase bus ridership, improve pedestrian and bicyclist safety, expand rural transportation services and help transit agencies with major purchases.

The spending highlighted in the report is a small fraction of the more than $1.5 billion the program has raised. The analysis, delivered to the Legislature late last month, provides an early look at how money from one of Washington’s most significant – and controversial – climate policies is being spent.

The 2021 Climate Commitment Act sets an annual cap on greenhouse gas emissions and requires companies covered by the law to obtain allowances equal to the emissions they generate. This cap will be tightened over time as the state works to slash emissions by nearly half by 2030.

If polluters – businesses like refineries, mills and utilities – can’t clean up their operations to meet the cap, they can purchase allowances from the state to make up for their emissions.

Revenue raised from the auction of those allowances flows into seven accounts for a variety of transit, transportation, climate, environmental justice, and ecological programs and projects. Washington raised $1.5 billion heading into the year’s final auction on Wednesday.

The Department of Ecology report covers spending from July 1, 2022, through June 30, 2023, a period that saw the first distribution of proceeds from the initial auctions.

Doling out dollars

While auctions in February and May brought in $857 million, only $76.2 million was distributed to five state agencies by June 30. Of that sum, only $54,234,309 was spent by June 30, according to the report.

Of the total, $14 million went to sustain and expand public transportation services in rural areas and to people with disabilities and $33.5 million to help providers of public transportation services cover operation costs and major purchases

There was $500,000 for public outreach in King, Pierce, Snohomish and Kitsap counties about a program allowing those aged 18 and under to ride free on public transit.

Elsewhere, grants went to help rural districts plan for electrification of bus fleets and buy gas-powered transit vans and light-duty vehicles.

Under the 2021 law, Ecology’s annual report is also supposed to include data to assess the environmental benefits of investments, including estimated emission reductions.

Authors of the report note reductions calculated for 69 transit-related projects were derived with methodologies used by the California Air Resources Board.

Calculation of emission reductions from the other funded projects was not possible, authors wrote, because the funds were either used for administrative purposes and building capacity or the recipients were not yet able to provide data on verifiable greenhouse gas reductions.

Ecology is currently developing reporting requirements for agencies that receive Climate Commitment Act dollars.

That will be a big deal in future reports because, in the current two-year budget, 35 state agencies are slated to get a share of $2.1 billion. Those dollars are authorized for spending in the operating, capital and transportation budgets.

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One last time for 2023

Meanwhile, on Wednesday, Ecology conducted its final scheduled auction of pollution allowances in 2023.

The state offered 9,591,906 allowances for sale. Of those 7,142,146 were for compliance obligations for 2023 emissions and 2,449,760 for 2026 emissions. The starting price was $22.20 but the final settlement price is likely to be much higher.

A full auction report to be released in a few weeks will include the final amount of revenue that the state will get from the sale.

Washington State Standard is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Washington State Standard maintains editorial independence. Contact Editor Bill Lucia for questions: info@washingtonstatestandard.com. Follow Washington State Standard on Facebook and Twitter.