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Washington raises $1.8 billion in first year of carbon market

Washington state has successfully raised an estimated $1.8 billion through carbon auctions, marking a significant stride in its commitment to nature conservation. Announced by the Department of Ecology, the quarterly auction results conclude the inaugural year of the Climate Commitment Act. The program aims to guide the state towards a 27-year trajectory to achieve minimal greenhouse gas emissions.

Washington raises $1.8 billion in first year of carbon market_Landscape view of mountain peak in North Cascade Range in Washington_visual 1Landscape view of mountain peak in North Cascade Range, Washington.

A total of more than 41 million carbon allowances, each representing one metric ton of emissions, were sold. The Climate Commitment Act compels the state's largest businesses to either reduce emissions or purchase allowances. Over seven three-year periods, the number of allowances sold will decrease, pressuring industries to lower emissions.

The revenue, earmarked for environmental initiatives, will fund projects like clean energy initiatives led by tribal nations and air quality monitoring. Washington's target is to cut emissions by nearly half by 2030 and achieve carbon neutrality by 2050, aligning with the Paris Agreement.

Read more: How are carbon credits issued?

Governor Jay Inslee's proposal for an additional $941 million investment in emission reduction projects underscores the commitment to cleaner air and affordable clean energy. However, opposition, citing high gas prices, threatens the law's repeal, supported by enough signatures for a 2024 ballot initiative.

Despite industry pushback, Washington is exploring the possibility of merging its carbon market with California and Quebec, seeking relief from high pollution prices. Environmental Justice Council members urge caution, emphasizing the need for a deeper understanding of the potential impact on pollution reduction efforts.

Read more: Rising demand for nature-based solutions spurs evolution in investment landscape

In the latest auction, 58 qualified bidders, including major oil companies, methane gas pipeline operators, and public universities, participated. Covered businesses, emitting over 25,000 metric tons annually, face compliance deadlines starting November 2024.

As Washington's environmental initiatives gain momentum, the state sets a precedent for others, fostering a national movement towards achieving carbon reduction targets outlined in international agreements.

In our journey towards a decarbonised economy, fostering increased engagement in carbon offset initiatives becomes imperative. By endorsing reputable carbon projects such as those spearheaded by DGB Group, both individuals and organizations play a pivotal role in advancing environmental sustainability and motivating others to join the cause.

DGB Group plays a crucial role in aiding businesses, investors, and individuals in minimizing their carbon footprint. Our premium carbon credits, verified following industry-leading standards, empower you to actively contribute to a more healthy planet. We are committed to guiding your business at every stage of its sustainability voyage, ensuring you successfully attain your carbon reduction goals.

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