State’s Carbon Market Revenue Climate Benefits

The December 18th Seattle Times Climate Lab column heralds “State carbon market revenue hits $4.3B as prices  reach record’”. Climate Lab is a Seattle Times initiative that explores the effects of climate change in the Pacific Northwest and beyond. The question being  who’s emitting the CO2, who’s buying the carbon emission allowances, and what are the benefits of the carbon market fees on Washington’s climate. 

The Energy Information Agency (EIA) detailed in 2023 that major sources  for CO2 emissions were 4.7 million metric tons (MMT)  from burning coal, 21.2 MMT from Natural Gas, and 50.4 MMT from petroleum.  It’s not clear whether coal powered emissions will end this year as the Department of Energy is objecting to the closure.  The closure, the final result of a state’s  decision decades ago to not use the 700 million tons of mineable coal in the state to fuel generators..

Those sources, again, per EIA in 2023, resulted in Washington emitting  42.5 MMT from transportation, 11.5 MMT from industrial, 9.5 MMT for electric power, 6.2 MMT residential, and 5.0 MMT commercial.  The 50.4 MMT CO2 petroleum emissions were used primarily for the 42.5 MMT transportation.  

Refining crude oil into gas and transferring the gas to the fuel pump can  result in emitting up  to 6.7 lbs of CO2 per gallon.  Burning that gallon in a vehicle will result in 20 more pounds of CO2 emissions. The 5 oil refiners in the state purchased the carbon market allowances to cover the former but no one will pay anything for those burning the gas in their vehicle.  The funds paid by refiners are passed on to those buying gas, part of the reason why fuel  costs so much in the state. 

The carbon allowance fees collected for the  21.2 MMT emitted from those burning natural gas to generate electricity will be passed on to those using the power to meet  industry, residents, and commerce needs.  Those burning the natural gas for those  purposes won’t. 

Thus the $4.3B carbon allowance fees and future fees will only  deter less than half the future CO2 emissions.  Any climate benefit from Washington’s carbon marketing fee is limited to the state only emitting 1.2% of the country’s 11% of planets, or ~0.12% of the total emissions.  A benefit dwarfed by the jet stream from China’s 30% of the planet’s total emissions.  Another reason why only Washington and California are attempting this approach.