A GOP-backed ballot initiative to repeal Washington state’s carbon market likely contributed to prices dropping sharply in the latest auction, experts say.
Businesses paid $26 per metric ton for the carbon emission “allowances” at the February auction, down from $52 last November and a record $63 last August. The cap-and-invest program, which launched last year, requires large companies to buy and submit allowances for any greenhouse gas emissions above a yearly limit, with the revenues funding climate-focused initiatives.
In November, voters will decide whether to repeal the 2021 landmark climate law that created the market. If the initiative passes, it’s not clear what that would mean for already purchased allowances — a particular concern for buyers who trade the permits on the secondary market.
“There’s huge market uncertainty that caused that price to collapse,” said Dallas Burtraw, Resources for the Future senior fellow and chair of a California independent advisory committee on cap and trade.
