First auction held for ‘licenses to pollute’ in Washington
A big list of carbon polluters in Washington is now subject to a cap and trade regulation system. The first auction was held Tuesday for permits to emit greenhouse gasses into the atmosphere.
Some people call these permits "licenses to pollute." Until now, those covered by the newly enacted Climate Commitment Act have not needed them. The regulation took effect on Jan. 1, 2023.
The estimated revenue from Tuesday’s sales is not yet known, though it’s expected to be in the hundreds of millions of dollars, just for the first quarter. The precise settlement prices from the auction won’t be known for nearly a month, when the Washington State Department of Ecology releases the results of some complex calculations, done behind closed doors.
Still, it was a day of excitement for clean energy advocates.
“This day is the day that our century long practice of allowing those emissions for free has ended,” said Michael Mann, executive director of the group Clean and Prosperous Washington.
A historic day – but one that was also shrouded in secrecy.
“It's not an auction that you can go see,” Mann said. "But right now, what is happening is Washington is starting to generate the billions of dollars it will over the years to come to invest in climate solutions.”
Mann worked for this moment for years, trying to get climate policies in place as head of the City of Seattle Sustainability Office in 2007 and prior to that, running Governor Jay Inslee’s district office.
Since he couldn’t watch Tuesday’s auction, Mann resorted to driving around in an electric van for the day. He wanted to show people what the future could look like, if the state legislature supports things like zero-emissions fleet vehicles to replace dirty diesel.
“These are the type of decarbonization efforts that we need to catalyze in Washington State to meet our carbon reduction goals,” Mann said.
By state law, the revenue from the auction — and future ones that will be held quarterly — is to be used to further reduce carbon emissions, or to help communities on the front lines of climate change adapt.
Hundreds of millions of dollars will be invested in the transition to alternative energy. With transportation still the largest source of greenhouse gas emissions in the United States and in Washington, those investments are expected to go above all to transportation solutions, like electric charging stations.
Amanda Emery is with MTR Western, a transportation company that provides charter services and shuttles. She said her company wanted to convert their Cascade Amtrak shuttle service between Bellingham and Seattle to all-electric vehicles.
“But we couldn't, because we can't charge it. We have nowhere to charge it overnight in Bellingham. And so having infrastructure anywhere is really what we're what we're hoping for and we would like to see across the state,” Emery said.
This is the sort of project that revenue from the emissions permit auction could fund. Advocates say switching passenger vans, trucks and buses that typically run on diesel could make the biggest difference.
In a letter dated Feb. 14, 2023, a large coalition asked lawmakers to authorize $250 million from the new auction revenue to support electrification of medium and heavy-duty transportation.