The state held another carbon credit auction last week, and like the previous auctions, it showed the cost of the Climate Commitment Act continues to skyrocket. 

A program that lawmakers originally thought would raise $2 billion in its first two years has brought in nearly $1.5 billion in just the first year, raising questions about what to do with the flood of cash—and underscoring the need for lawmakers to take action next year to fix the climate law.

As lawmakers adopted the state’s Climate Commitment Act, the business community warned of the price impact it would levy on consumers. It’s simple economics: Raise prices on commodities upstream, and those price impacts get passed along through the supply chain.

Public testimony on the Climate Commitment Act, the Clean Energy Transformation Act, and other greenhouse gas reduction policies highlighted the fact that, as written, these are extremely expensive policies. Anyone who wants to put solar panels on their house, switch to a heat pump, or use an electric car knows how costly it is to make the switch. Policymakers should have known what was coming.

Now that the predicted surge in gas prices is taking place, however, some lawmakers and environmental advocates appear to be surprised. Well, their “surprise” is surprising. The CCA is doing exactly what it was designed to do: raise the price of gasoline and diesel transportation fuels to incentivize people to cut back on travel or switch to electric vehicles or public transportation. The question is not about whether the CCA is driving up the cost of fuel. It clearly is. The better question is how can we ensure future increases are more stable and predictable? 

The idea that oil companies would pass on their compliance costs was baked into the pricing assumption. It is key to the success of this program. Washington’s highest source of emissions by sector is transportation, which in 2019 was 39% of statewide emissions. Car trips by Washingtonians for work and play are the single biggest area where emissions need to drop to help meet our climate goals. And the best way to do that is to increase the cost of those trips and make the economic case for lower emissions transportation options. Our current prices are helping to make that happen.

This is not the end of energy related price increases, either. It’s only the beginning. With the passage of CETA in 2019, utilities are required to make considerable investments in renewable energy to become carbon neutral by 2030. Ratepayers will also see considerable and persistent cost increases in their utility bills as utilities make those investments and recover what costs they can from their rate base. Businesses exposed to these higher energy costs will push them through their supply chains and down to consumers. 

Environmental advocates have been arguing for years that these costs are worth it to help limit global temperature increases. Politicians tried to have it both ways by attempting to tell us we could decarbonize the economy for “pennies on the dollar.”

Voters deserve the truth from their elected officials. If the state is to truly manage the complexities of the green transition, we need an honest conversation about the policies and costs that come with them. We should be discussing how to manage these costs in a predictable and stable way. That is our call to policymakers. Let’s set aside the blame game and focus on fine-tuning and fixing the problem. 

Peter Godlewski is the government affairs director for energy, environment, and water policy at the Association of Washington Business.