Quebec and California: Upcoming Merge Provides Strong Link in the Chain to Fight Climate Change

Good news for people who dislike climate change.

California just took the next major step towards strengthening the fight against climate change.  Last week, the State’s Air Resources Board released some long anticipated regulatory text that will allow (if adopted) the state to “link” its program with Quebec – making either state’s carbon allowances interchangeable.  This link not only expands the carbon reduction possibility for both jurisdictions, it mightily strengthens the carbon reduction effort sweeping across the rest of the world.

The potential benefits of this important step are huge and provide a win-win scenario for both states.  Quebec will likely buy allowances from California businesses, providing more opportunities for the Golden State to invest in clean technologies that bolster our health, spur job growth, and improve our economy.

For Quebec — at 1/6 the size of California’s economy–they need a larger partner to create an effective market to successfully reduce carbon and boost the economy in their region. In essence, the link ensures that California and Quebec are working together to make sure both carbon reduction targets will be met, meaning more guaranteed reductions of global warming gases across the board.

Most importantly, this linkage will undoubtedly cause other states and provinces to take notice that it is time to get serious about regional efforts to reduce pollution. Oregon and Washington have already agreed to work with California on regional efforts to cut carbon – and this link gives them a clear goalpost to move towards.  Similarly, Ontario and Alberta have put their toe in the water on cross border efforts to fight climate change – now it’s time to jump in.

So, how did we get here?  In 2007, California, Quebec and other members of the Western Climate Initiative (WCI) set out to identify, what an ideal regional cap-and-trade program to tackle climate change might look like.  In short order, they identified what a program should look like and how to deal with logistical issues to hold joint auctions.  Now, the hard work is paying off.

As for the final steps in the process, last Friday’s release by the Air Board was text that would amend California’s cap-and-trade program to allow California and Quebec to link.  The Board must now vote to approve the linkage, and the Governor has to approve it as well.  Quebec and California will also likely conduct a practice auction to road test the link before it goes live in 2014.

Make no mistake, the link is not a done deal (yet) – but Friday’s notice gives every indication we can expect good news for California, Quebec, and the future of cap and trade in North America.

Steps for creating a linked North American Carbon Market to fight climate change:

May 9, 2012 California Air Resources Board (CARB) Releases a staff report considering the economic and environmental reason for linking
Sept. 1, 2012 California amends its cap-and-trade regulation to allow linkage with other governments
Nov. 14, 2012 California holds first auction for Carbon allowances
Dec. 13, 2012 Quebec's Provincial Government approves legislation to allow linkage with other jurisdictions
Jan 1, 2013 Quebec and California begin enforcing their cap-and-trade programs
Feb. 22, 2013 CARB requests Governor approves linkage
March 22, 2015 CARB releases regulatory amendment to link California’s program with Quebec
California Governor approves linkage with Quebec (by April 8, 2013)
California Air Resources Board Votes to Approve Linkage (Late April, 2013)
California and Quebec sign an Operating Agreement
Quebec and California hold first joint auction for carbon allowances

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