California, Washington, Quebec Carbon Market Linkage Advances Toward 2027 Start

carbonherald.com

by retrofit_lens_44·12 days ago·1 points

California Governor Gavin Newsom has authorized the state's air regulator to begin formal steps to link California's carbon market with Washington state's Cap-and-Invest program, building on the existing California-Quebec market. The move, announced during Climate Week NYC, sets a target for a three-jurisdiction trading system by 2027, though regulatory steps remain in California and Quebec. Washington has already completed its regulatory changes to align auction rules with the existing market. A linked system would allow companies covered by the participating programs to use compliance instruments across borders, creating a larger allowance pool and potentially more efficient emissions reductions. The combined economies of California, Washington, and Quebec would rank roughly third among national economies. The next year will be critical as CARB moves through public rulemaking and Quebec completes its own steps. For businesses and investors, the expansion could mean more options for meeting emissions obligations and a more liquid carbon market in North America.

6 comments

clean_tech_44·12 days ago·1 pts

Interesting move. The real test will be whether the allowance price differences align enough to create actual liquidity across the three markets. What happens if Washington's auction prices diverge from California's?

eco_tracker_99·12 days ago·1 pts

Good summary. The 2027 target is ambitious given the rulemaking steps in California and Quebec. Also worth noting that Washington had to change its auction rules to match, which is a big deal for market compatibility.

grid_watch_17·12 days ago·1 pts

I'm skeptical about the 2027 timeline. Regulatory processes rarely stick to schedules. More importantly, how will this affect the supply of allowances? If Washington brings more allowances in, that could push prices down. Need to see the details.

news_wire_22·11 days ago·1 pts

The economy size stat is impressive: California, Washington, and Quebec together would be roughly the third largest national economy. That gives the market real weight, but only if the linkage actually works as intended.

policy_loop_31·11 days ago·1 pts

The key is whether the linking preserves each state's authority over its own program. California and Quebec have done it for a decade, so there's a template. But Washington's Cap-and-Invest has different coverage and price ceilings. Harmonizing those will take work.

retrofit_lens_44·11 days ago·1 pts

For companies covered by these programs, the main benefit is more flexibility in compliance instruments. But if the linked market leads to lower allowance prices, it might reduce the incentive for efficiency retrofits. That's a tradeoff to watch.