Will WA ‘Link’ Its Carbon Auction Market with CA, and Quebec?
Thursday, November 2nd, the WA State Department of Ecology will announce if the state is going to pursue attempting to link its carbon credit market with California and Quebec (Canada).
Why is WA considering this?
When the Climate Commitment Act was pushed through the WA legislature in 2021 by Democrats, and when it first went into effect in January of 2023, Governor Inslee, Democratic legislators, and the Department of Ecology claimed it would only cost "pennies" on the dollar for WA consumers.
The prices at the pump, claimed officials, would almost be minuscule, but WA average gas prices have now climbed to or above $5,00 per gallon.
Linking the CA and Quebec carbon markets with WA would greatly increase the number of credits available, say officials, and because of the larger market, would eliminate the massive price spikes seen in WA. Carbon credits have sold for 2 to 3 times the expected cost put out by Ecology. CA carbon credits, in the beginning, sold for far less, easing, if you will, the jumps at the pump.
Perhaps the most telling reason for Washington exploring this link is found on page 14 of the DOE report on the project. It states:
"High allowance prices can negatively impact consumers if businesses elect to pass along their compliance costs in the form of higher prices for goods like gas, home heating, or food products. Moreover, high allowance prices and the associated economic impacts can breed public mistrust of the program and leave it vulnerable to curtailment or repeal, with no other alternative economy-wide program in place to ensure Washington is able to meet its GHG reduction limits."
Perhaps this is Ecology's way of admitting the carbon credit auction did not unfold the way they predicted, and it could be a possible 'political' hedge as their language appears to indicate they are fearful of future administrations or officials terminating the program with legislation.
The announcement of whether WA will pursue linking will come Thursday morning.
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