A new program which is critical to Washington’s plan of achieving carbon neutrality by 2050, the cap-and-invest plan–the state’s first cap-and-invest program– had its regulations finalized on September 29.

“This policy is among the most decisive actions we’ve taken in our history to confront climate change and protect our collective future,” said Gov. Jay Inslee. “This new program will help us decarbonize our economy, improve air quality, and put Washington at the forefront of the fast-growing global era of clean energy.”

Under the program, businesses and organizations that are responsible for 75% of the state’s greenhouse gas emissions (GHG) will be required to obtain allowances to cover their emissions. The number of allowances will be reduced over time, which will incentivize businesses to cut GHG.

According to the Department of Ecology, some allowances will be awarded at no cost, while others will be sold at quarterly auctions. The first auction is planned for the second half of February of 2023. Proceeds will be invested into emissions reductions programs and preparing Washington communities for the effects of climate change.

“Washington is already a leader in the clean energy economy,” said Laura Watson, the Department of Ecology’s director. “Cap and invest will build on our success by encouraging new investments and innovations right here at home.”

The cap-and-invest plan was passed by the Washington Legislature in 2021 under the Climate Commitment Act. The Department of Ecology is required to implement the program, the second of its kind in the nation, by January 2023. Washington law requires these policies to meet the state’s goal of reducing GHG 95% by 2050.