Editorial: Protect state climate act’s funds for intended uses

Published 1:30 am Saturday, March 7, 2026

By The Herald Editorial Board

As is typical for the state Legislature toward the end of a session as it confronts adoption of budgets, there are plenty of balls in the air, more so as lawmakers must also plug some significant budget holes in supplemental and upcoming budgets.

Three separate operating budgets — the governor’s and those from the House and Senate — set different paths for spending and the resources from which to fund them. But as state officials confront a growing list of needs, demands and commitments — including making up for deep cuts to federal health and social service programs imposed by Congress’ passage last year of the One Big Beautiful Bill Act, leaving states to pick up the slack — a relatively new bucket of funding tempts as a possible source to fund those needs.

Since 2023, under the state’s Climate Commitment Act and its cap-and-invest program, Washington has run auctions for carbon-dioxide emission allowances that the state’s largest polluters must bid on and pay. The auctions are meant partly as incentive for those industries, including fossil fuel refineries, power plants and other industries to find ways to pollute less, but at the same time generate a source of revenue — a ton of carbon at a time — for specific projects.

The revenue generated by the auctions — a total of $1.68 billion for 2025 and more than $4.3 billion since the start of the auctions in 2023 — is then made available for a range of investments that advance clean energy projects, fund climate resilience solutions and aid communities, including tribes, overburdened by pollution or climate impacts.

But money not already allocated for specific projects has prompted proposals for uses that begin to stretch the boundaries that were set to cordon off those funds for the uses identified when the CCA was adopted in 2021.

Before the start of the session, Gov. Bob Ferguson’s budget proposal called for using $559 million of the auction’s receipts to fund an expansion of the state’s Working Families Tax Credit. That’s a use technically allowed under the CCA rules, but perhaps more than might otherwise be allocated for such a program.

The House proposal, likewise, suggests loaning $330 million from the auction proceeds for the tax credits as well as $200 million more for the state’s capital infrastructure spending. The House plan would pay those funds back in 2029 by taking money from a state pension fund that is overfunded.

Only the Senate, and its chief budget writer Sen. June Robinson, D-Everett, appeared more committed to respecting the spirit of the law, versus its letter. Robinson, last month, told the Washington State Standard that dipping into the CCA fund was “very unpopular with our caucus.”

“It’s not what people want that money to be used for,” she said.

The public’s vote of support for the CCA in 2024, with its rejection of Initiative 2117 with 62 percent of the vote, justifies that stance and should prevail when a final budget agreement is adopted before the session ends Thursday.

All options for meeting budgets involve less-than-appealing trade-offs, including the risks taken quaffing deep from “rainy day” and pension funds. But, there’s reason to closely follow the rules for CCA auction funds, chief among them to maximize what that money can do to:

Reduce carbon dioxide and other greenhouse gases; certainly for meeting the state’s commitment to limit its contributions to the climate crisis but also to reduce the pollutants that can contribute to lung disease and other diseases, especially in vulnerable populations;

Fund clean energy, efficiency and technology programs that will reduce reliance on fossil fuels;

Invest in infrastructure and programs that limit losses to climate-related disasters, such as wildfires, floods, heat waves, damaging storms and more;

And help those communities and tribes overburdened by pollution and the impacts of a growing climate crisis.

If lawmakers need a reminder of what they committed to in adopting the Climate Commitment Act, then so can state residents benefit from a better understanding of the intended uses of its revenue and how those allocations are made, allowing for decisions that make the most effective use of those funds.

Fortunately, the Legislature also this year has considered a bill, House Bill 2251, that would simplify the identified funds that receive the auction revenue, while adjusting those funds’ distributions and clarifying the program’s funding, goals and reporting practices.

The CCA’s existing accounting structure has not been changed since its passage in 2021 and trial and error — including a major accounting error when the state Department of Ecology report on the CCA’s 2025 investments overstated carbon emission reductions of some projects — call for adjustments to accounts and streamlined reporting.

The legislation would reduce seven current accounts to three: the CCA Transportation Account, Operating Account and Capital Account, with most of the revenue — 73 percent — allocated to the transportation fund.

Also, the Ecology Department’s report will be issued every other year, rather than annually, but will expand information on spending that benefits overburdened communities and spending on projects supported by the state’s tribes.

While a biennial report might seem to reduce the opportunity for public and lawmaker oversight, the hope is the new schedule will allow for a fuller accounting without increasing the spending necessary in compiling the report.

The legislation passed the House on a largely party-line vote and earned “do pass” recommendations from the Senate’s Ways & Means and Transportation committees and was moved forward by the Rules Committee on Thursday.

There’s a larger responsibility here as well.

With federal efforts to respond to the climate crisis halted where not reversed, Washington, joined by California, have a responsibility to show the possibilities and benefits for other states in putting a price on carbon and making investments in climate response and resilience.

Not using that revenue for the most-effective projects — including diverting it for short-term budget fixes — will discourage the CCA as a model for use elsewhere.