Last week, California Governor Jerry Brown approved the link of the state’s carbon market with Quebec. The next step is for California’s Air Resources Board to consider changes to its cap-and-trade program that will allow it to link with Quebec. The Board is scheduled to meet on April 19th. A spokesman has stated that the Board intends to continue to work on all necessary additional steps to ensure California’s efforts to link with Quebec are successful.
If approved by the Board, California and Quebec intend to implement the link between their carbon markets on January 1, 2014. Once linked, they will hold joint auctions of carbon emission allowances which can be used for compliance in either jurisdiction. In the interim, the two jurisdictions will test their auction platforms and trading systems for compatibility.
Both governments are hopeful that linking the carbon markets will improve liquidity for carbon allowances by increasing the pool of permits and companies trading them, as well as encourage expanded investments in low-carbon technologies.