Washington state has gone “all in” on climate change projects! As a result, it’s raking in the cash! Where’s that money coming from? What will it be used for? How will it impact you?
Here are Five Fast Facts on WA’s climate cash:
- 😮💨 The Program - The Evergreen state passed only the second cap-and-trade program in the country in 2021, and it is now kicking in. The idea is to cap emissions while setting up a quarterly auction for companies to buy carbon allowances toward that cap. The money raised from these auctions will fund various climate change programs. Basically, they’re paying for the right to create emissions.
- 💰 The Early Returns - The first auction in March was an astounding success in terms of the money raised, almost $300 million! Projections suggest raising over $2 billion over the next couple years. It’s raining green!
- ⚡ The Fed Contribution - In addition to the state’s efforts, a fed climate law passed last year could bring in another $18 billion in the next seven years. This law would allow companies to access fed funding for tax credits and other incentives for EVs, energy efficient homes, and other “decarbonization” efforts. The combined force of these two programs is a carrot and stick. The carrot is the savings offered by the fed program, and the stick is the state law requiring companies to pay up or reduce emissions. It’s almost as if they planned this in advance… 🤔
- 📝 The Paperwork - The biggest problem here seems to be the fact that there is so much money flowing in they are having a hard time prioritizing and allocating it to projects. But don’t worry, they’re working on it! Also, there’s no way any general slush funds will be involved.
- 😨 The Concerns - There are concerns about what this new program will do to the costs people pay for energy. Gas prices have been going up again for weeks, and over time the emissions caps will only get lower (and the auction prices will go up), so that doesn’t give us a warm fuzzy. Shh, shh, shhhhhhh…don’t talk about the bad things!
🔥Bottom line: It’s great that there’s a concerted effort to protect our natural lands and waters but we need to be careful about what it costs us every day. Cap-and-trade programs are designed to make energy (especially gas and electricity) more expensive to force companies and people into more environmentally friendly habits or technology. You either pay for the emissions or you pay for the changes…either way, you pay!
Is this the right path for us to take?
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