Cap-and-trade showdown: Will US voters pull the plug?

Washington state's carbon market may be at an end. Voters could scrap the cap-and-invest program, which has raised more than $2 billion since 2023, which would send shivers among states eyeing similar moves. Created under the Climate Commitment Act (CCA), this market requires Washington's biggest polluters to purchase carbon credits.

The controversial program has become the subject of a ballot initiative in the upcoming election that some hope will fail.

Launched in 2023, Washington's CCA sets a cap on the state's carbon emissions and requires major polluters to purchase credits equal to their emissions. Over time, the cap will tighten, reducing the number of allowances available to reduce emissions and bring the state closer to its ambitious 2050 net-zero goals.

But not everyone agrees – especially as gas prices skyrocketed – with some saying it's a direct result of the program.

Behind the push to scrap the project is hedge fund manager Brian Heywood, who has been handing out cash at rallies while blaming the carbon cap for imposing higher prices on everyday drivers – with the state last year having the highest gas price in the country became . In his view, it is commuters who ultimately pay the figurative – and literal – price.

Proponents argue that it will advance green programs — from transit to salmon conservation — that a state reliant on fossil fuels desperately needs. Even BP, a company typically undecided on emissions cuts, is pushing for the cuts, citing “backward” climate measures if the initiative passes. BP is in the game with its Cherry Point refinery, but insists it's about the long-term stakes.

Critics might argue that BP has the luxury of supporting a costly carbon program and using its large financial resources to reap the rewards of a greener image. However, smaller polluters do not have this cushion and may struggle to absorb the costs without passing them on to consumers.

This is the carbon market experiment that the rest of the country is using as a basis for lessons on climate ambition – and reality checks.

By Julianne Geiger for Oilprice.com

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