Washington state carbon market plan to raise $1bn a year

Governor Jay Inslee hopes to launch emissions trading system in 2016, says it is “the smart thing to do”

Washington's carbon market could link up with California and Quebec in future (Pic: Flickr/Andrew E. Larsen)

Washington’s carbon market could link up with California and Quebec in future
(Pic: Flickr/Andrew E. Larsen)

By Megan Darby

Washington has become the latest US region to set out plans for a carbon market to limit emissions.

The Carbon Pollution Accountability Act would cover 85% of the state’s emissions and raise around US$1 billion in its first year, if passed.

Along with boosts for electric vehicles and clean energy, the cap-and-trade system is to deliver a target to cut emissions 15% by 2020 from 2005 levels.

“It’s the smart thing to do because we can make the air cleaner for our children, our businesses can lead the world in clean technology and doing so will bring good-paying jobs to Washington,” said governor Jay Inslee.

The northwestern state also considered a carbon tax, but plumped for a market mechanism in line with that used by California.

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It is set to cover emissions from transport and heavy industry as well as power generation.

California has linked with a similar market in Quebec, selling permits for US$11 a tonne in their first joint auction last month.

Inslee is hoping to get legislation through next year to launch Washington’s market in July 2016. It could link up with California down the line.

The plan is to go straight to auction, unlike other markets which gave out freebies to start with.

Other western states collaborated in the development of California’s system but have yet to push through concrete plans of their own.

Canadian provinces Ontario, Manitoba and British Columbia have also shown an interest.

Glen Murray, minister of environment and climate change for Ontario, told RTCC it is a likely next step in emissions cutting efforts.

Ontario has brought in “very aggressive greenhouse gas reduction strategies,” Murray said, despite a lack of interest in climate change from the federal government.

Measures including a complete phase-out of coal power have cut emissions to below 1990 levels.

Its industries want to see a market mechanism for any further emissions cuts, Murray added.

The other working carbon market in North America covers power sector emissions only in nine northeastern states.

Clean power plan

Dirk Forrister, head of the International Emissions Trading Association, suggested new curbs on power sector emissions might prompt more US states to consider carbon trading.

Under the Environmental Protection Agency’s (EPA’s) clean power plan, the US must cut emissions from power plants 30% on 2005 levels by 2030.

Championed by president Barack Obama, the plan faces fierce opposition from coal producing states, in particular.

But if the EPA overcomes legal challenges to push the rule through, individual states will have some flexibility in the way they achieve emissions cuts.

Forrister argued the industrial Midwest could benefit from a market-based approach.

“That is part of the real value here for Washington state,” he told RTCC. “It gives states an example of how they can get the problem addressed rather than continue to live in uncertainty.”

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