Ecology begins rulemaking on climate funds reporting
(OLYMPIA)– How Washington invests cap-and-invest auction revenues to prepare for climate change will be captured in public reporting that the Department of Ecology is responsible for publishing under the Climate Commitment Act, according to a news release from the agency.
Ecology is starting new rulemaking focused on reporting requirements for state agencies that receive and use these auction revenues to fund various climate programs, projects, and initiatives across the state. From this information, Ecology must compile an annual report to the Legislature that shows where funds were spent and, for decarbonization projects, the greenhouse gas reductions they achieved.
“The Climate Commitment Act provides Washington with an historic opportunity to cut carbon pollution and prepare our communities for a warming climate,” said Laura Watson, Ecology’s director. “This rulemaking represents the ‘invest’ part of the cap-and-invest program and will ensure transparency on where and how funds are spent.”
The first auction under the Washington cap-and-invest program was held in February. It generated nearly $300 million through the sale of carbon allowances. Going forward, auctions will be held every quarter and are expected to generate hundreds of millions of dollars annually.
Although Ecology facilitates the cap-and-invest auctions, all revenue raised is assigned to specific accounts appropriated by the Legislature. The Climate Commitment Act requires auction funds to be allocated to critical projects in the state focused on clean transportation, clean energy, climate resiliency, and environmental justice.
Washington is only the second state in the nation to implement an economy-wide program to cap and then gradually reduce greenhouse gas emissions. Over time, the cap-and-invest program will offer fewer and fewer allowances at auction, incentivizing businesses to reduce their greenhouse gas emissions to minimize compliance costs.
Public comment on the new reporting rule will begin in June and extend through fall 2023.