Investors spooked by repeal bid shun Washington carbon market

By Anne C. Mulkern | 06/27/2024 06:38 AM EDT

A November ballot measure to abolish the state’s second-in-the-nation carbon market is driving investors away and prices down.

Washington Gov. Jay Inslee (D) signed a law creating the state's carbon market

Washington Gov. Jay Inslee (D) signed a law in 2021 creating the state's carbon market, which now faces abolition through a November ballot measure. Lindsey Wasson/AP

Investors in Washington state’s fledgling carbon market are increasingly fearful that voters will approve a conservative-led ballot measure in November to abolish the program.

A growing number of investors are buying “short” positions, which become profitable if the market drops. They are effectively betting that values of the financial instruments tied to the program will tumble, according to a recent analyst report.

Earlier this month, the state failed for the first time to sell all of the carbon market’s financial instruments it offered investors at a quarterly sale, indicating pessimism about the market’s future. There were fewer buyers than expected, and prices of the instruments were well below their level a year ago.


“The uncertainty regarding the program’s potential repeal … continues to impact the market,” a report by market analyst cCarbon said.