Washington State to Pursue Linking its Carbon Market With California and Quebec
- Media Manager
- Nov 1, 2023
- 1 min read
Financial Post - Bloomberg News
Written By: Michelle Ma
Published: November 2nd, 2023
The state of Washington released a recommendation to link its carbon market with similar programs in California and Quebec, a major milestone for state-level climate policy.
By linking their cap-and-trade programs, the jurisdictions would share a common allowance price, hold joint auctions and be allowed to trade allowances across jurisdictions. This would generate more liquidity for the carbon market, insulating it from price shocks, as well as more confidence and stability for businesses covered by the program, according to Caroline Jones, senior analyst for US climate at the Environmental Defense Fund.
Cap-and-trade programs force certain businesses to buy permits for every ton of greenhouse gas they produce, with the number of permits decreasing over time so businesses are compelled to invest in emissions-cutting efforts.
The recommendation by Washington’s Department of Ecology will kick off negotiations between the three jurisdictions on how to conduct the merger, with linkage potentially occurring as soon as 2025.
“A common market would also align the goals and mechanisms Washington is using to decarbonize its economy with our peers, ensuring that the combination is greater than the sum of its parts in influencing climate policy and advancing a clean energy economy,” Laura Watson, director of the Washington Department of Ecology, wrote in a blog post.
