Washington State DOE Seeks to Work With California and Quebec On?
The Washington State Department of Ecology began running its carbon credit auction program in January of this years with the first auction taking place on February 28th. Since that first auction, the State has brought in almost $1.5 billion dollars on four auctions with two more yet to come.
The auctions have seen the carbon credit price increase almost every time. The first auction sold at $48.50 per metric ton, the second at $56.01 per metric ton, the third (a reserve auction) saw split prices at $51.90 and $66.68 per metric ton, and the fourth auction at $63.03. This rise in price has created questions about the program's long term stability.
On June 16th Washington State recorded the highest average gas price in history at $5.55 for a gallon of regular unleaded, and for a brief period, surpassed California for the highest gas price in the Nation. The correlation between the cost of the carbon credits and the cost of gas was an easy one to make. California, who has been doing carbon credit auctions since 2012, saw a price of $36.14 in their last auction in August, much less than Washington State.
In 2014 California and the province of Quebec linked their allowance programs which opened up a larger market to lower prices for those forced to buy credits. Earlier today, Washington State made a decision to pursue a new direction for their program.
Ecology Director Laura Watson announced that Washington State will pursue an agreement to link with California and Quebec. The link, according to a release from DOE, would create more stability for the Evergreen State's market and allow businesses that buy credits to have better long term strategies.
Not everyone sees this as a good move on the State's behalf, or one that will have a positive impact on residents. Rep. Mary Dye (9th District-Pomeroy) is the ranking member on the Washington State House Environment and Energy Committee.
Dye expressed concern, especially when you look at the cost of living and gas in California.
"Energy is central to the affordability of your commute, the food you buy, and home heating and cooling. I am concerned how this linkage could affect Washington consumers. Moving forward, the burden will be high to convince me that beginning to tie our state's energy markets together-which is what happens when you link the market for emissions from that same energy-would not hurt affordability for Washington families and competitiveness for our employers."
Just because Ecology is pursuing an agreement doesn't mean one will happen. There are a number of steps that need to be taken before that can happen, including an alignment or goals and policies between the entities.