State lawmakers started talking Friday on what Washington can do to make it easier to merge its carbon market with ones in California and Quebec but said little about a looming ballot measure that could moot efforts to link the climate programs.
For nearly an hour, the Senate Environment, Energy & Technology Committee heard concerns about possible changes to rules for compliance periods, offsets, electricity imports, and allowance prices. There were questions about the state’s ability to maintain control of its cap-and-trade program and get out of any future marriage of markets if it wants.
More than a dozen people weighed in on Senate Bill 6058. The 40-page bill, crafted by the state Department of Ecology, would amend several sections of the Climate Commitment Act, the 2021 law that created Washington’s system for auctioning air pollution allowances that is a signature policy of Gov. Jay Inslee and his fellow Democrats in the Legislature.
“It is kind of a wonky, technical bill,” said Sen. Joe Nguyen, D-White Center, the committee chair and the bill sponsor. “The idea is that this policy is about more than one jurisdiction. It is about being able to work together … on a good unified response to the greatest challenge of our time.”
What didn’t get much mention during the hearing was the interplay of the legislation and Initiative 2117, a ballot measure that would entirely repeal the Climate Commitment Act.
It is unclear if the Senate bill, or its companion in the House, would be construed as an alternative to the ballot measure if enacted. If so, it would have to be put in front of voters alongside the initiative.
To avoid that, lawmakers added a self-destruct provision at the end of Senate Bill 6058 and the House version, which will receive a public hearing Monday.
“This act is not a conflicting measure dealing with the same subject” as Initiative 2117, reads the legislation. If a court directs it to be put in front of voters as an alternative, the legislation immediately becomes “null and void and may not be placed on the 2024 ballot,” it states.
Provisions in the bill will take effect Jan. 1, 2025 if the initiative is not approved. Its provisions will be “null and void” if voters pass the ballot measure.
Nuts and bolts
Washington’s two-year-old Climate Commitment Act seeks to reduce greenhouse gas emissions by putting a price on pollution-causing carbon emissions.
The program known as cap-and-trade sets a limit on carbon emissions for major emitters, like refiners and utilities, and that limit shrinks over time. Those polluters are required to buy allowances at auctions for each metric ton of greenhouse gasses they emit. Revenue collections from auctions reached $1.8 billion in 2023, the program’s first year.
Thus far, funding has been steered into purchase of electric school buses, free public transit for youth, air quality monitoring, and electric vehicle chargers.
Washington Director of Ecology Laura Watson announced in November the state would begin the process of linking the state’s program with the ones in California and Quebec. This next step was envisioned when the law was enacted, ecology officials have said.
Proponents of merging carbon markets say it could help to reduce costs for businesses and consumers under Washington’s program by bringing down the price of allowances, which are less expensive in California and Quebec.
But harmonizing the three programs will require a somewhat complex revising of rules. In November, Inslee administration officials offered an optimistic timetable for completing the merger sometime in 2025. Several speakers at Friday’s hearing predicted it could be 2027.
Passage of the initiative would torpedo plans completely, scrapping the entire program, unless Democrats try to resurrect the climate policy in 2025.
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