Following California, Washington Starts Cap and Trade Market

Washington State reported the results of its first cap-and-trade auction for fighting climate change, as carbon markets gain renewed interest among US policy makers trying to slash greenhouse gas emissions.

The state’s system, authorized by the 2021 Climate Commitment Act, sets a declining annual limit on Washington’s emissions and forces businesses to buy permits for each ton of greenhouse gases they produce. They can either buy those permits, called allowances, in quarterly auctions held by the state or from each other. The first auction was held Feb. 28, and on Tuesday the state announced all allowances offered for purchase sold out, with a settlement price of $48.50 per ton. That was more than twice the system’s floor price of $22.20 and well above the $27.85 price of allowances sold in the most recent cap-and-trade auction held by California and Quebec.