Washington State's inaugural carbon auction clears near $50

High premium to other North American carbon markets will increase calls to link up with California

The first Washington State carbon allowance auction cleared at almost $50 this week, a record high for any North American carbon compliance market.

Recall that what is only the second state-wide carbon trading scheme in the United States came into being on 1st January 2023. Under the 2021 Climate Commitment Act, Washington State is legally required to reduce its greenhouse gas (GHG) emissions by 45% by 2030, 70% by 2040 and 95% by 2050 compared with 1990 levels.

The number of emission allowances available to be purchased under the Washington State “Cap-and-Invest” carbon market will gradually reduce in line with the target of achieving a 95% reduction in emissions by 2050 (see Everything you need to know about Washington State's "Cap-and-Invest" carbon market).