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California Air Resources Board releases draft regulations for cap-and-trade program linkage with Québec

The California Air Resources Board (ARB) released proposed regulations to link its cap-and-trade program to Québec’s to form a joint carbon market to reduce greenhouse gas emissions. (Earlier post.)

The draft linkage regulations provide guidelines to ensure that California and Québec carbon allowances are interchangeable at auction and can be used for compliance purposes in one another’s programs. The regulations also provide joint, enforceable standards for development and use of carbon offsets, as well as a range of steps to ensure the security of the market.

The release of the proposed regulations signals the start of a 45-day public comment period. The Air Resources Board will consider the proposed regulations at its regular meeting on 28 June 2012.

Linking with Québec is a significant advance in California’s efforts to fight climate change and steer our economy toward a clean energy future. Linking provides more options to California businesses and lays the groundwork for other partners to join with us. This sends a strong message to two national governments that now is the time to support innovation, energy efficiency and the development of clean technologies.

—ARB Chairman Mary D. Nichols

Climate change is a global issue that must be addressed by all levels of government. By being among the first in North America, with California, to participate in the carbon market, our businesses will be in good shape to excel in a carbonless economy. The cap-and-trade system is acknowledged as one of the most efficient and least costly economic tools available to reduce greenhouse gas emissions and is an important instrument in our transition to a green and prosperous economy. Québec is optimistic that its linking with California will be followed by many other partners.

—Québec minister for Sustainable Development, Environment and Parks, Pierre Arcand

The proposed linkage is another indication of the wide range of action taking place in the international arena. Starting next year 34 emissions trading programs will serve as the primary vehicle to drive greenhouse gas reductions in Norway, Iceland, Switzerland, Australia, New Zealand and 27 European Union members, along with California and Québec. South Korea’s program will begin in 2015. Just last month Mexico also passed climate change legislation.

California’s cap-and-trade program, adopted in October, 2010 was designed to link with other cap-and-trade programs. Over the past five years California has been working with several states and Canadian provinces within the Western Climate Initiative on approaches to linking their emission trading. AB 32 called for regional associations. It is expected that in the future other partners—notably Ontario and British Columbia—may join.

Québec is the first to be proposed for linkage as its own program is sufficiently advanced and has equally rigorous reductions and reporting rules as California, ARB said. Québec has roughly one-sixth the amount of greenhouse gas emissions from industrial and other sources as does California.

The first linked auction between California and Québec is scheduled for 14 November 2012.



California should not read too much into the Quebec plan. It is strictly a PR paper for the coming election.


Interesting Harvey. And all but Cali abandoned the Western Climate Initiative last year:

These tax raising schemes do not fly any longer.

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