Initiative 2117 would repeal the Climate Commitment Act (CCA). The CCA was enacted in 2021 with the goal of reducing carbon dioxide emissions in the state to 5% of 1990 levels by 2050.

The average price of carbon emission allowances at 2023 auctions was $54.74, more than twice the $22.78 anticipated in the 2021 fiscal note for the CCA. However, the average price in 2024 so far is $28.52, suggesting that the prospect of I-2117 has dampened the market for allowances.

Allowance costs may be passed on from fuel suppliers to customers. Based on the Energy Information Agency’s estimates of the carbon content of fuels, an allowance price of $30 would increase the cost of a gallon of gasoline by roughly 24 cents and a gallon of diesel by roughly 31 cents. The actual impacts at any given time would depend on market forces.

Since the first auction was held, proceeds to the state have totaled $2,306.2 million. Revenues may generally be used to reduce carbon emissions, to mitigate the impacts of carbon emissions on communities, to deploy renewable energy, to increase building energy efficiency, and to increase climate resilience.

Importantly, the auction revenues make up a large share of the 16-year transportation revenue package adopted in 2022. If I-2117 is approved, the Legislature could end up reconsidering its carbon reduction strategy and the Move Ahead Washington transportation package.

Read the report here.