The Department of Ecology now estimates that carbon emission allowance auction proceeds will total $2.264 billion in 2023–25. That’s $313.9 million less than had been forecast in November. Similarly, the new forecast for 2025–27 is $139.0 million below the November forecast.

Revenues from the December 2023 auction were $55.0 million higher than assumed in the November revenue forecast, but revenues from the March 2024 and June 2024 auctions were $244.5 million below the November forecast. As Kriss has noted, the lower prices at these auctions were likely factoring in the possibility that the climate commitment act (CCA) could be repealed by I-2117 later this year.

As I wrote last month, it looks like the Legislature will need to reduce appropriations from CCA accounts. Considering actual 2021–23 revenues and spending, transfers from a CCA account to a non-CCA account, enacted 2023–25 appropriations, and the June 2024 forecast of 2023–25 revenues, CCA spending exceeds estimated revenues by $187.9 million.

If I-2117 is rejected, and the CCA remains in place, the Legislature may consider transferring responsibility for the CCA revenue forecast from Ecology to the Economic and Revenue Forecast Council (ERFC). In 2023, the Legislature adopted a bill that transferred the transportation revenue forecast to the ERFC. During a hearing at the time, Sen. Liias wondered if climate commitment act revenues should be added to the transportation revenue forecast. Meanwhile, after the ERFC’s presentation of the June forecast of revenues subject to the outlook, Sen. Wilson said the state should consider adding CCA revenues to the ERFC’s forecast.