Washington state officials expect to soon decide whether to join the California-Quebec cap-and-trade program.

The decision could come later this month or in early November, Joel Creswell, climate pollution reduction program manager at the Washington Department of Ecology, told the state’s House Environment and Energy Committee Monday. 

Washington’s decision to join the program would require approval by California and Quebec, setting the stage for a final contract to be signed in 2025.

Creswell said joining the bigger program would likely reduce Washington carbon allowance prices from the high levels seen in this year’s quarterly auctions. Critics of Washington’s cap-and -invest program blame it for the state having the highest gasoline prices in the U.S this past summer.

Carbon prices in the Washington auctions have climbed steadily in the first year of the program, clearing at $48.50 in the first quarter, $56.01 in the second quarter and $63.03 in the third. Republican critics of the program believe the increases have driven up prices at the pump. 

The Oil Price Information Service has estimated that a $50 allowance price would translate into a 40- to 50-cent increase in gasoline prices. The state’s oil sector has acknowledged it has passed the price of allowances to consumers to account for its extra costs. 

However, the gas price tracking service GasBuddy showed that prices in Washington and Oregon (which does not have a cap-and-trade program) had been roughly the same from 2014 to 2022. On Jan. 1, 2023, about two months before the first cap-and-trade auction, Washington’s average price was 10 cents higher than Oregon’s, with the gap expanding to 36 cents by Sept. 27. That 26-cent increase could be theoretically linked to cap-and-invest, Ecology Department spokesperson Andrew Wineke said. 

On Monday, state Sen. Liz Lovelett (D) asked: “Why would California want to link with us?”

Creswell said that Washington joining with California and Quebec would boost the manufacture and sales of green technologies in all three areas as industries seek to trim their carbon emissions.

California conducted its first cap-and-trade auction in November 2012, with prices clearing at $10 per allowance. Prices hit $14 by the third quarterly auction before declining.

In 2014, Quebec joined California to create a cap-and-trade market that is six times the size of Washington’s. California-Quebec prices increased from $19 in 2021 to $36.14 this summer, according to data from the California Air Resources Board.

One reason Washington’s carbon prices have exceeded those in California is the comparatively steeper rate of carbon reductions in the Evergreen State, said Jessica Spiegel, Northwest Region senior director at the Western States Petroleum Association, to NetZero Insider.