California and Québec take another step toward linking cap-and-trade programs
1 October 2013
California and Québec signed an agreement outlining steps and procedures fully to harmonize and to integrate their respective cap-and-trade programs. The agreement, in both French and English, was signed for California by California Air Resources Board (ARB) Chairman Mary D. Nichols. Signing for Québec were the Minister of International Relations, La Francophonie and External Trade, Jean-François Lisée and the Minister of Sustainable Development, Environment, Wildlife and Parks, Yves-François Blanchet.
Signing the agreement is the latest step in a process to link the two jurisdictions that began more than five years ago. It will be followed in November by a report to the California Environmental Protection Agency and Governor Brown on the progress toward linking.
The linked programs will provide a working model for other states and provinces that are seeking cost-effective approaches to reducing their greenhouse gas emissions. The recent announcemen by the US EPA regarding limits on greenhouse gas emissions from power plants, for example, could lead to state-by-state caps and a system that would allow them to trade credits with other similar programs. The California-Québec arrangement could be the template for that effort, ARB suggested.
In December 2012, the Government of Québec adopted a regulation providing for linkage between the two programs. In April 2013 the Air Resources Board adopted a regulation setting January 1, 2014 as the start of the linkage, which will enable carbon allowances and offset credits to be exchanged between participants in the two jurisdictions’ programs.
The sale of Québec allowances will generate at least $2.5 billion in revenue by 2020 in Quebec. These funds will be fully reinvested in initiatives to fight climate change, including facilitating the conversion to renewable energy, promoting energy efficiency, improving industrial processes, and preparing Québec society to adapt to the impacts of climate change. The electrification of transportation is another major project on which our government will labor over the coming months.—Minister Blanchet
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