Washington drivers feel higher gas prices as carbon costs soar
Mar 17, 2025, 8:21 AM | Updated: 9:15 am
A closeup of a driver pumping gas into their vehicle. (Photo: Marta Lavandier, The Associated Press)
(Photo: Marta Lavandier, The Associated Press)
Carbon prices for air pollution allowances have climbed again, impacting drivers with higher gas prices across the state.
The Department of Ecology announced that allowances sold for $50 each at the March auction, a 24% increase from December. According to the Washington State Standard, this latest sale will generate an additional $230 million for the state.
But as carbon prices soar, so too does the burden on drivers. Todd Myers, vice president for research at the Washington Policy Center, said the increase is expected given the design of the Climate Commitment Act.
“It’s a punishment for using CO2-emitting fuel,” Myers told the Washington State Standard. “The only question is, how rapidly it goes up? And, you know, a 24% jump is kind of a lot.”
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Climate Commitment Act continues to drive up costs
Critics of the Climate Commitment Act, including the Washington Policy Center and the Western States Petroleum Association, said the program is driving up fuel and utility costs. They note it adds about .40 cents to a gallon of gasoline and .50 cents for diesel.
This is the second consecutive auction with rising prices. Prices had dipped below $30 last September after peaking above $50 and even $60 in some cases the year before.
Still, overall, gas is down year-over-year, offering a reprieve to Washington drivers feeling the weight of the increased costs. The average cost for a gallon of gas across the state is $4.08, according to AAA. A year ago? It was $4.30. However, Washington state remains high above the national average price of $3.08, putting the state at the third highest gas prices in the nation.
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Carbon prices may be stabilizing
Altinay Karasapan, Washington regulatory policy manager with Climate Solutions, claims that, “the program continues to really be effective and work. The group said that prices are stabilizing within the expected range, giving a more predictable outlook on revenue.
Auctions have generated almost $3 billion in state revenue since they started in 2023. Businesses and other large carbon emitters in Washington must meet a state-set cap on pollution or purchase allowances.
Supporters argue that the law is essential for reducing emissions and combating climate change. They believe that, in the long run, it could help with affordability by investing in technologies like heat pumps and electric vehicles, which could lower energy and transportation costs.
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