Finds that Washington should maintain its leadership on climate change policy by implementing a cap on carbon emissions and developing strategies to achieve those reductions, including continuing Washington's participation in the design of a regional cap-and-trade program with the western climate initiative.

Requires the forecasting office of the office of financial management, in consultation with members of the governor's council of economic advisors, to initiate an independent economic analysis of the impact to Washington consumers, businesses, and citizens if Washington entered into a regional or federal cap-and-trade program.

Requires the director of the department of ecology to convene a market design work group.

Requires the department of ecology, in consultation with the forest practices board, the department of natural resources, and the forest carbon working group to: (1) Develop and deliver to the legislature by December 31, 2010, legislation to implement a financial incentives program for forestry and forest products that will recognize certain activities; and

(2) Develop recommendations for the state's policy for forestry offset projects within Washington.

Requires the department of ecology, in consultation with Washington State University and the Washington state department of agriculture to reestablish the agriculture carbon working group to develop recommendations for agricultural offset projects within Washington.

Requires the department of ecology to consult with tribal governments upon request on any elements of a cap-and-trade program that may impact tribal governments, such as their voluntary development of offset projects.