Wash. regulators plan for cap-and-trade vote

Washington regulators are making a "contingency" plan in the event of a successful repeal of the state's emissions cap-and-trade program.

Initiative 2117, which looks to repeal the state's cap-and-trade program and prevent any similar program from taking its place, will be on state ballots for the 5 November election.

"We are doing contingency planning in case the ballot measure passes and will update our covered entities when we do have information — and I know this initiative is creating a lot of uncertainty," said Stephanie Potts, senior planner with the state Department of Ecology today at the Argus North American Biofuels, LCFS & Carbon Markets Summit in Monterey, California.

The agency also remains focused on continuing to implement the program, "assuming it continues," she said.

Washington's "cap-and-invest" program requires large industrial facilities, fuel suppliers, and power plants to reduce their greenhouse gas emissions by 45pc by 2030 and by 95pc by 2050, from 1990 levels.

The department is in an ongoing rulemaking process to expand and amend its carbon offset protocols, and also continues work to gather input for linkage with the Western Climate Initiative, a linked carbon market between California and Quebec. Potts said Washington expects to have a linkage agreement in place by the end of next year.

The uncertainty introduced by the ballot initiative over the fledgling market's future has tempered carbon credit prices and activity this year. Argus assessed Washington carbon allowances (WCAs) for December delivery at $30.25/metric tonne on 4 March, their lowest price since the program's inception in 2023. The drop in prices at that time coincided with a statement by Ecology outlining how a successful repeal would end the agency's authority over the program.

Earlier this year, the state Office of Financial Management (OFM) released a fiscal impact statement on a successful repeal that assumed an effective repeal date would be 5 December.

By Denise Cathey and Jessica Dell