California, Quebec, and Washington state have signed an agreement to link their carbon cap-and-trade programs, creating what officials say will be the world's largest subnational carbon market by 2027. The merger will allow polluters in each jurisdiction to buy and sell carbon allowances across state and international borders. Washington Governor Bob Ferguson framed the move as a direct response to federal inaction on climate change, noting that the linked market will cover an economy equivalent to the world's fourth largest. The price difference between the markets is notable. California and Quebec's latest joint auction cleared at $28.81 per metric ton, while Washington's most recent auction hit $64.56 per metric ton. Free market critics say Washington's higher prices will likely fall after linkage, effectively subsidizing Washington consumers with lower cost California allowances. Environmental justice groups warn that linking to distant markets could allow local polluters to keep emitting while buying cheap offsets elsewhere, leaving frontline communities with continued local pollution. Revenue from the carbon auctions has been funding clean energy projects and low-income community support. The deal comes as federal climate policy under the current administration has stalled, making state and provincial level cooperation a key arena for continued carbon pricing action.
