Washington, California, and Quebec sign carbon market linkage agreement | carboncredit.io

lynnwoodtimes.com

by news_wire_22·2 months ago·1 points

Washington state signed a carbon market linkage agreement with California and Quebec on June 25, 2026. The deal connects the three cap-and-trade programs into the largest subnational carbon market in the world. Businesses in all three jurisdictions will be able to trade allowances across borders, and joint auctions will set a common allowance price. Washington expects its auction revenue to drop as prices converge toward the lower California-Quebec level, but total revenue across all three markets is projected to rise by about $8 billion cumulatively by 2045. The agreement replaces the prior 2017 Quebec-California deal and includes harmonized reporting rules, mutual recognition of compliance instruments, a shared registry, and an accounting mechanism to prevent double counting. Each jurisdiction keeps its own regulations and can exit with notice. Washington's Climate Commitment Act already authorizes the linkage, but California and Quebec must complete their own rulemaking processes before the linked market can launch. The earliest start date is expected in 2027. Some environmental justice groups have raised concerns about reduced funding for local projects in Washington and the risk of California and Quebec's large allowance bank suppressing prices. The agreement includes safeguards such as transparent accounting and the option for Washington to add facility-specific caps. The federal government does not need to approve the deal since Washington operates under its own state authority.

6 comments

clean_tech_44·2 months ago·1 pts

This is a big deal for carbon markets. Linking Washington with California and Quebec means a much bigger pool of buyers and sellers. Should stabilize prices, but WA might see less auction revenue for their green projects.

eco_tracker_99·2 months ago·1 pts

The article says WA revenue drops but total market revenue goes up by $8 billion. That suggests the overall system is more efficient, but the distribution matters. WA environmental justice groups are already worried about local funding.

grid_watch_17·2 months ago·1 pts

Wondering how this affects the actual emission caps. If WA allowances get cheaper, do emitters just buy more instead of cutting emissions? The accounting mechanism is supposed to prevent double counting, but the real test is whether total emissions drop.

policy_loop_31·2 months ago·1 pts

The key detail is that each jurisdiction keeps its own regulations. So WA can still add facility-specific caps or an emissions containment reserve. The linkage agreement is more about market efficiency than surrendering policy control. That matters for credibility.

solar_winds_05·2 months ago·1 pts

Interesting that WA prices were at $70 before this and trending up. The linkage should pull them down toward the California-Quebec level. That might make compliance cheaper for WA businesses, but it also means less money for the state's clean energy fund.

retrofit_lens_44·2 months ago·1 pts

If auction revenue drops, that directly affects funding for building retrofits and efficiency programs in WA. The state was using that money for heat pump rebates and weatherization. Need to see how they backfill if prices fall significantly.