Washington State Moves to Join California-Québec Carbon Market
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📰 The quick summary: Washington State has released a draft agreement to link its cap-and-invest program with the California-Québec carbon market, potentially creating one of North America’s largest unified carbon trading systems as early as 2027.
📈 One key stat: California and Québec have already operated a linked carbon market for over a decade, and adding Washington State could expand one of North America’s largest regional carbon markets, boosting liquidity and price stability.
💬 One key quote: “No state or province can handle the climate crisis alone,” said Washington Gov. Bob Ferguson in a statement announcing the draft framework.
1️⃣ The big picture: Washington State, California, and Québec have released a draft agreement that could link their separate carbon markets into a single, unified trading system. Washington’s cap-and-invest program would connect with the long-running cap-and-trade market jointly operated by California and Québec, which has been running together for over a decade. Under a linked system, companies regulated in any of the three jurisdictions could use emissions allowances from any of the others to meet compliance obligations, and all three could hold joint allowance auctions at a shared carbon price. Each emissions allowance represents permission to release one metric ton of CO2 equivalent, and a larger, combined market is expected to improve price stability and reduce volatility. If regulatory and rulemaking processes move forward as planned, the unified market could be up and running as early as 2027.
2️⃣ Why is this good news: Linking three major carbon markets creates a larger pool of buyers and sellers, which strengthens price signals and gives companies greater confidence when investing in lower-emissions technologies. A bigger, more liquid market generally functions more efficiently, reducing the kind of price volatility that can undermine long-term climate planning. Cooperation across US state and Canadian provincial lines also shows that subnational governments can drive meaningful climate action independent of federal policy, setting a powerful precedent for other regions. Expanding one of North America’s largest regional carbon markets deepens the infrastructure for market-based climate solutions at a time when coordinated climate policy is more important than ever.
3️⃣ What’s next: A public consultation process has now begun, during which each government will evaluate the regulatory changes needed for integration. Officials must also complete further rulemaking and environmental assessments before making a final linkage decision. If everything proceeds as expected, the three jurisdictions aim to launch a unified carbon market as early as 2027.
Read the full story here: Carbon Herald – Washington State Advances Toward Joining California-Québec Carbon Market
