On September 4, the Department of Ecology sold 5,260,000 carbon emission allowances at a price of $29.88. Consequently, the amount collected by the state was $157.2 million. State revenues from the allowance auctions to date now total $2.306 billion.

However, the revenues from the September auction are $59.5 million below what was assumed in Ecology’s June forecast of revenues from the auctions (and $47.6 million below the pessimistic forecast).

As we showed in our recent report on Climate Commitment Act (CCA) spending, the CCA accounts were already out of balance before the September auction. The September results deepen the imbalance. Altogether, expected spending from CCA accounts through 2023–25 now exceeds estimated revenues by $247.4 million. This figure assumes that I-2117 is rejected.

If I-2117 is approved, the CCA would be repealed. The state would retain the $2.306 billion it has collected, but there would be no future auctions. Of the 2023–25 CCA appropriations, $704.5 million would never go into effect. However, $2.546 billion of the CCA appropriations for 2023–25 are effective now. This means that if I-2117 is approved, appropriations from the CCA accounts (plus prior spending) could exceed revenues by $298.6 million. (This figure assumes that before the effective date of the initiative, the state spends the $235.6 million in appropriations that are effective now but would lapse if I-2117 passes. This group of appropriations includes, for example, the $30 million for farm fuel users and the $150 million for utility bill assistance grants—both of which are already being distributed.)

To balance the CCA accounts, the Legislature will have to reduce appropriations if I-2117 is approved. The Legislature will likely also have to make cuts if I-2117 is rejected—unless the remaining three auctions of 2023–25 bring in more than is currently forecasted.