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Meaningful Momentum: CCA updates for March 2022

Over at Ecology’s Lacey headquarters, the Climate Commitment Act (CCA) Implementation Group is hard at work developing Washington’s first cap-and-invest program. It’s a big task with even bigger long-term impacts on the state’s greenhouse gas emissions and the global fight against climate change.

The CCA is a sweeping piece of legislation with a lot of moving parts. In our effort to ensure that stakeholders, Tribes, environmental groups, and the general public are kept up-to-date on what’s being done to implement this important law, we’re launching this monthly blog series, "Meaningful Momentum," which will provide regular updates on various aspects of this effort.

If you’re just hearing about the CCA — welcome! We encourage you to check out our previous blog, which provides some background information (and plenty of links!) about the CCA and how it’s moving Washington toward a shared low-carbon future.

March 2022 updates

As our inaugural post in the series, this month’s installment is chock-full of updates. Wherever possible, we’ll provide links to more information or websites where you can learn more about the partners we're contracting with, where we are in our rulemaking processes, and other topics that will help give context to the CCA and what it means for Washington.

Washington’s cap-and-invest platform

At the end of 2021, Washington agreed to join Western Climate Initiative, Inc. (WCI) and to use the nonprofit’s existing platform to facilitate Ecology’s carbon emissions allowance auctions, the linchpin of the cap-and-invest program outlined in the CCA.

Using WCI’s pre-built online auction platform is an efficient move for a few key reasons. First, it will save the CCA Implementation Team substantial time — which means saving Washington’s taxpayers money. What’s more, it will allow Washington’s program to benefit from WCI’s proven track record of facilitating successful cap-and-invest programs. The non-profit currently provides the platform for California’s program, as well as for those in Quebec and Nova Scotia.

Learning from other jurisdictions

WCI’s affiliation with both the California and Quebec markets is important because, under the CCA, Ecology is required to build Washington’s cap-and-invest program in such a way that it could, potentially, link with similar programs in other jurisdictions.

Of course, any future linkage would be decided by us separately, once Washington’s program is up and running. This process will be subject to a formal comment period where input from stakeholders, Tribes, and the general public would be heard and considered before a final decision is reached. Any future program linkage must also meet certain requirements outlined in the CCA. Among other criteria, Ecology must determine that a potential linkage:

  • Will reduce program costs and increase efficiency through joint auctions and mutual recognition of each jurisdiction’s compliance instruments.
  • Will not negatively impact the state’s ability to meet the emissions-reductions commitments outlined in the CCA.
  • Will not adversely impact vulnerable communities in either jurisdiction.

Clearly, linking with another program will be no small feat. However, should Ecology determine that Washington should link with California and Quebec (which are linked already) in the future, having all three programs on the WCI platform should make that process much simpler.

To further ensure that we’re building a program that can dovetail as seamlessly as possible with those jurisdictions in the event of future linkage, our CCA Implementation Group is meeting regularly with representatives of both the California and Quebec programs. This collaborative approach is a hallmark of our implementation plan, and will help us develop the best possible program for all of Washington.

The math that makes it work

As you can imagine, developing a new emissions allowance marketplace requires a lot of number-crunching. In February, we contracted with McKinsey & Company, a global management consultancy with economy-wide experience in helping their clients achieve sustainable growth in both the public and private sectors.

Crucially, this contract also tapped McKinsey’s subsidiary, Vivid Economics, to provide the economic analysis that will inform some of the most pivotal aspects of our work — such as how we set appropriate auction prices for emissions allowances each year and how we account for the impact of allowance supply and demand changes over time.

A seasoned economic modeling company specializing in carbon markets, Vivid has a long track record of supporting the research, development, and implementation of low-carbon products, business models, and policies. This partnership is yet another crucial step toward building a safe, secure, transparent cap-and-invest marketplace — moving Washington forward on our path to reducing greenhouse gas emissions by 95% by 2050.

Hashing out the details

If you’ve read our earlier blog, you’ll know that we're currently in rulemaking on a number of key aspects of the cap-and-invest program, including the mechanics of the program itself, the criteria for ‘emissions-intensive, trade-exposed’ industries (EITEs), and the greenhouse gas reporting requirements for businesses covered by the program.

You can click the links above to learn more about where we are in these processes, but of particular note is our upcoming formal comment period for the Chapter 173-446 rule, which outlines the structure and function of the cap-and-invest program itself. We'll be proposing our draft rule language in Spring 2022. At that time, we'll be holding public hearings and looking for comments and feedback on our proposed rule from businesses, stakeholders, our Tribal partners, and from the general public.

You can sign up for rulemaking updates to find out when this comment period will begin and how you can participate.

Learn more

As we approach this important milestone for the Chapter 173-446 rule, the CCA Implementation Group is also working to ensure that all groups have access to the educational and informational resources they need to be able to engage with this process in a meaningful way.

If you’d like to learn more about the CCA and what we're doing to bring it to life, you can sign up for our email updates, read more about the legislation, or reach out to our team directly for additional resources or to schedule an informational presentation.

Join our team!

Excited about the CCA and the impact it will have on our shared environment? Come work with us! The CCA Implementation Group is currently hiring for a number of positions working on all aspects of this exciting legislation. Check out our open positions or sign up for email alerts to see how you can become of a part of this important work.