Washington voters rejected ballot initiative 2117confirming the state’s cap-and-trade program under the Climate Commitment Act (CCA). About 62 percent of voters opposed the measure, with 58 percent of votes counted at press time.

Adopted in 2021, the DPA established Washington’s cap-and-trade program for greenhouse gas (GHG) emissions. Under this mechanism, the state government sets an emissions cap for companies whose annual GHG emissions exceed 25,000 tonnes of carbon dioxide (CO2) equivalent. If they cannot, companies must purchase additional allowance credits in quarterly auctions. Revenues generated from these auctions fund clean energy and environmental protection programs authorized by the CCA. Companies that meet the 25,000 metric ton emissions threshold but do not participate in the auction face fines of up to $50,000 per day.

During the first auction of the program in February 2023, the price per tonne of CO2 equivalent was set at $48.50 and generated sales of nearly $300 million. At the state’s last auction, held in September 2024, a metric ton of CO2 equivalent was traded for $29.88, generating more than $237 million in revenue. Of which $157 million will be paid to CAC programs. The total operating budget of the CCA is almost 3 billion dollarsaccording to the program dashboard.

The ACC has drawn criticism from Washingtonians for many reasons, the biggest of which is cost. Before the program took effect, Gov. Jay Inslee (D) said the DPA would have “minimal impact” and would only add “a few cents” in additional costs at the pump. After the implementation of the CCA, gas prices in Washington became some of the highest in the country, jump up to 50 cents per gallon.

Opponents of Initiative 2117, including State Representative Joe Fitzgibbon (D-Seattle), believe that abusive prices oil companies are responsible for these high costs. However, analysis by Todd Myers, vice president of research at the Washington Policy Center and a supporter of the ballot measure, found a direct link between the cost of CO2 at quarterly auctions and the price at the pump.

Despite its high cost, the program’s impact on reducing emissions is unclear. “We don’t have any statewide emissions data since 2019, so we don’t even have a baseline to compare to. It is likely, however, that the state’s CO2 cap will have reduced emissions in 2023 at a very high cost. It is also likely that the state violated the cap because we had to flood the market with low-cost CO2 allowances due to their high cost,” says Myers. Reason.

For Myers, the only thing clear is that “state projects funded by the CO2 tax are often extremely wasteful and driven by political agendas, expanding government and giving to special interests rather than helping the environment.” “. He cites the rules of community decarbonization grant programs, which do not prioritize reducing emissions but instead award money to groups that include union rules in their contracts and reach out to disadvantaged communities.

Indeed, many of the CCA projects do little to significantly reduce greenhouse gas emissions. The largest project awarded by the CCA is the $150 million project Clean Energy Credit Grant Program for Washington Familieswhich provides a one-time $200 utility bill credit to low- and moderate-income families to help them with “the clean energy transition.” King County Metro, the transit authority that serves Seattle, received more than $66 million “to support its operational and capital expenditures.” It is the third largest winner of the CCA. Meanwhile, the GHG Emissions Reduction program provides more than $1.2 million for the Department of Fish and Wildlife (DFW) to study the feasibility of adding solar and micro-hydropower projects on DFW locations across the state.

Despite the program’s wasteful spending and high costs, Washingtonians voted to keep the CCA intact by rejecting Initiative 2117. The resounding public support could spur other states to adopt similar cap-and-trade measures. Yet without significant reforms to program oversight and effectiveness, Washingtonians could be left footing the bill for an ineffective and costly carbon emissions reduction program.