What’s Going On with Cap-and-Invest Revenue?

It’s been a while since we have provided an update on Climate Commitment Act (CCA) revenue. The last month has seen another quarterly allowance auction, a historic linkage agreement with California and Québec, and several exciting new funding announcements from state agencies. All of this has a meaningful impact on program revenues.

Where Are We Now?

First, a level set. Results from the fourteenth CCA auction – and the second standard auction of this year – were released on June 10. The auction generated $233.3 million to invest in climate and clean energy projects, and another $136.8 million for Washington utilities to use for low-income bill assistance. Allowances sold at $64.56 each, meaning that unlike the last two auctions, an additional Allowance Price Containment Reserve (APCR) auction was not triggered.

This puts the total CCA revenue generated to-date to just under $5 billion, and an additional $1.6 billion consigned for utilities.

What Linkage Means for Revenue

On June 25, Washington, California, and Québec signed a historic agreement to link their carbon markets. Clean & Prosperous has been a longtime advocate for linkage, which will increase program durability and market stability through lower compliance costs, and also has the potential to enhance collective emissions reductions across the three jurisdictions.

A linked carbon market will facilitate lower compliance costs (and therefore, less revenue generated) because covered entities can bid from a larger pool of allowances across a Washington, California, and Québec market. An eventual decrease in revenue due to lower allowance prices is backed up by the state Department of Ecology’s most recent (December 2025) revenue forecast.

*Source: Washington State Department of Ecology*

Immediately available data indicates that the signed linkage agreement is having the anticipated effect on prices, which are currently settling in the mid-$50s, showing that Washington’s market remains robust and strong with allowance prices between the floor and ceiling.

The most recent allowance auction offers another available datapoint to underscore lower compliance costs: Future allowances were purchased at $30 each, meaning that the market predicts lower compliance costs as Washington links and its market matures.

One note of caution: It’s important to not read too much into the tea leaves of mid-quarter allowance prices and future purchases. Ultimately, the best available data on the state of CCA revenue is the quarterly auction report from the Department of Ecology.

How This Impacts CCA Investments

The Climate Commitment Act was never intended to be a steady, year-over-year revenue generating source. The understanding has always been that revenue would decline as the number of available allowances is reduced. Reduced allowances means reduced pollution, in compliance with the emissions cap.

As CCA revenue declines, it becomes all the more important that funding is put to the highest and best use. At Clean & Prosperous, we believe funding should be used first and foremost for projects with demonstrated greenhouse gas reductions that have additional impacts on affordability, job creation, air quality improvements, and help facilitate the clean energy transition.

Reduced CCA revenue also means that operational funding is not the best use of these dollars, particularly for staffing and other kinds of ongoing charges. Capital projects, as in things the state can purchase like zero-emission trucks, electric vehicle chargers, clean energy infrastructure, and electric ferries, represent the most logical use of funds, and have significantly less risk in creating future budget gaps.

Gradually reduced revenue isn’t a bug associated with linkage – it’s a feature core to the design of a well managed cap-and-invest program.

Explore 350 New CCA Projects On Our Map

As always, you can explore all the CCA investments mentioned above on Mapping Washington’s Climate Commitments, our interactive tool tracking more than 3,800 Climate Commitment Act-funded projects representing over $4.68 billion in investments across Washington.

In our most recent update, you’ll find:

349 newly mapped projects across the state
$568 million in additional mapped CCA investments

New projects include tribal clean energy and climate resilience initiatives, electric buses and charging infrastructure, solar and battery storage, carbon capture, dairy digesters, and Washington’s first Thermal Energy Network pilot.

Each update offers a more complete picture of how Climate Commitment Act revenue is being reinvested to expand clean energy, decarbonize transportation, strengthen communities, and build a more resilient Washington.

Explore the full map: https://climatecommitment.cleanandprosperous.org/

Join Us at PNW Climate Week

We’re thrilled to participate in an exciting marquee panel at PNW Climate Week! We’re joining state leaders to discuss how Washington’s nation-leading Climate Commitment Act (CCA) delivers on reducing pollution while growing the economy, creating jobs, and boosting resilience. You can register to attend here (registration is mandatory): https://luma.com/8xi5d7g4.

Here are the details:

What: “Delivering with the Washington Climate Commitment Act: Progress and the Work Ahead.”
Who: Moderated by Becky Kelley; Panelists include House Majority Leader Joe Fitzgibbon; Washington State Department of Ecology Climate Pollution Reduction Program Manager Joel Creswell; Washington Environmental Justice Council Co-Chair Tatiana Brown; and Clean & Prosperous Executive Director Michael Mann
When: Friday, July 17, 9:30 – 10:25 a.m.
Where: Seattle City Hall, 600 4th Ave, Seattle, WA 98104

The CCA is one of the most ambitious and effective carbon markets in the world. We’re looking forward to joining our partners to celebrate the work done so far and help chart the course ahead.

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