Quebec, California and Washington State have reiterated their intention to link their carbon markets.
On Monday morning, the Ministry of the Environment, Climate Change, Wildlife and Parks issued a press release to inform the public of the progress made in establishing a joint carbon market with California and Washington State, also known as a “liaison.”
“We believe that a liaison will strengthen our respective efforts to combat climate change and reduce air pollution, while encouraging other governments to adopt flexible, market-based climate policies. We will continue to share information and collaborate to establish a liaison and achieve these shared goals,” the statement reads.
In the spring of 2024, Quebec, California and Washington State had expressed interest in the possible creation of a linked carbon market between the three states.
Like Quebec since 2013, California has been managing a cap-and-trade program for greenhouse gas emissions since 2012. These two markets were linked on 1er January 2014.
After Ontario’s withdrawal in 2018, the Quebec government has been looking for several years to integrate new players.
The statement released Monday morning notes that Washington state has “undertaken a rulemaking process” with the goal of aligning some cap-and-investment program rules with those in California and Quebec.
There are several steps left
It is also noted that “several other legally required steps must still be completed by the State of Washington before a linkage agreement can be finalized and signed.”
For example, it is necessary to carry out “an assessment from the perspective of environmental justice, a final assessment of the linking criteria provided for by the Climate Commitment Act and a public consultation.
Currently, the carbon market in which Quebec participates with California operates according to the rules of the Cap-and-Trade System for Emissions Allowances (SPEDE), also called the carbon exchange.
The SPEDE aims to reduce greenhouse gas (GHG) emissions in the two federal states: companies in the most polluting major sectors can purchase “units” at auction every three months, which are a kind of emission rights.
Year after year, the ceiling on authorized emissions decreases, which forces the price of units up and encourages companies to reduce their emissions, or even to buy “units” in the other territory.