(Credit: Pixabay)Washington State is set to implement a “cap-and-invest” carbon rule in which large emissions emitters will be required to participate by purchasing or trading for allowances to release a specific amount of greenhouse gas emissions as part of the state's larger net zero goals.
The rule is a piece of Washington’s Climate Commitment Act and is set to go into effect Jan. 1, 2023. The cap-and-invest program will be run by the Washington Department of Ecology, which is currently seeking public input on the rule, and must be in place by that time.
The program, more commonly known as carbon cap and trading, allows groups to buy or sell credits that allow them to emit a certain amount of greenhouse gas emissions. As part of the Washington program, Ecology will sell the credits through quarterly auctions.
Those allowances will be lowered over time, which will make them cost more and in turn make it more expensive to produce emissions. Ecology estimates that the program will raise $500 million a year, which will be invested back into efforts to reduce emissions statewide, add clean energy, and build resiliency against wildfires, flooding and other natural impacts.
The Washington program will require organizations that directly or indirectly produce more than 25,000 metric tons of carbon emissions a year to participate. The Seattle Times reported that 98 organizations will initially fall under that umbrella. The rule allows some exceptions for free carbon allowances and smaller organizations can voluntarily join the program.
The EPA says carbon cap-and-trade program emissions limits can ensure targets are met and the tradeable allowances, which are usually market based, provide flexibility for organizations to set their own emissions targets.
The proposed cap-and-invest rule also includes categories of carbon offset projects that Ecology says will reduce, remove or avoid greenhouse gas emissions, or enhance the removal of emissions from the atmosphere. The program says offsets can account for up to 5% of an organization’s emissions work through 2026 and then 4% from 2027 through 2030.
California is another state that has a cap-and-trade program. It applies to more than 450 entities that produce 80% of the state’s emissions, and one allowance equals metric ton of carbon emissions.
The Climate Commitment Act was passed in 2021 and is part of Washington’s target to reach net zero by 2050. Ecology will hold several public hearings on the program and is accepting comments through June 30, 2022.
