(The Center Square) – The price for CO2 emissions allowances for the final quarter of 2024 was set in an auction last week, settling at $40.26 per allowance-the highest so far this year.
The last auction price was $29.88 per MT (metric ton) of CO2.
“That price is likely to continue to go up because the way prices are set is an auction of allowances and the number of allowances that are available will go down next year,” said Vice President for Research at Washington Policy Center Todd Myers.
“If you reduce the supply of something, prices are going to go up, so that’s probably what we’ll see next year,” said Myers.
The new auction price came one month after voters rejected a measure ( I-2117 ) that sought to repeal the state’s cap-and-invest program.
Under the Climate Commitment Act of 2021 – which went into effect at the beginning of 2023 – emitters are required to obtain “emissions allowances” equal to their covered greenhouse gas emissions at quarterly auctions hosted by the state Department of Ecology. One carbon credit permits the emission of one ton of carbon dioxide or the equivalent of other greenhouse gases. Carbon credits are also known as carbon offsets. While emitters bid on the credits, others can register to bid on them as well. Climate activists and trading firms outside the state are registered to place bids.