HB #### – Carbon Auction Rebate (CAR) Act

The Climate Commitment Act (CCA), Senate Bill 5126 (2021), required the Department of Ecology (DOE) to set up a program that would cap annual carbon emissions in Washington from industry and utilities. The cap was set to reduce emissions 45% by 2030. Regulated businesses must buy allowances at an auction to emit carbon above the cap. The auction prices of an allowance, which represents one ton of emissions, was forecast to be around $22 in the program’s first year, but instead have been above $56 dollars, and even higher on secondary markets where such allowances are traded by investors. Thus, the program is three times as expensive as originally forecast, bringing in revenue three times what the final fiscal note for the legislation predicted.