California Set to Link CO2 Scheme with Quebec in 2013

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California has been pushing towards a goal of connecting itself to a much larger carbon market, and is well on its way to that goal with its forthcoming emissions trading scheme with Quebec in 2013, the state’s chief air regulator said on Monday.


Mary Nichols, chairperson of the California Air Resources Board (ARB), was quoted as saying that California Governor Jerry Brown is going to sign off “on rules that would enable linkages for the state’s CO2 market after review by the attorney general.”

The governor has 45 days to “find that the other jurisdiction has adopted a greenhouse gas reduction program that is equivalent or stricter than California’s program and that any linking failure will not impose significant liability on the state.”

“We are preparing the package for the governor to sign off on linkage, which should happen sometime this year,” Nichols told a carbon market conference in Washington, adding that the linkage to Quebec’s market and joint auctions with it would begin next year.

The two jurisdictions are both members of the Western Climate Initiative, which is a regional cap-and-trade system. And they both have been planning to link their markets together well before their 2013 launch dates, but decided to delay the linkage in order to await approval by the Californian governor.

Quebec actually has a more ‘ambitious’ GHG reduction target than California, 20% below 1990 levels by 2020, compared to California’s goal of 1990 levels by 2020.

“The addition of Quebec would increase the size of the overall market by 20 percent, increasing liquidity and giving California businesses more opportunities to reduce emissions.”

By linking California’s carbon market, which overlaps 85% of the state’s economy, with other regions, carbon emitters can comply with emission restrictions at a cheaper price.

“We have come to agree it would be better to be part of a larger system,” she said.

There has been a dissenting opinion voiced by a panel of experts advising ARB, saying that there would be very negligible upside to linking California and Quebec, and suggesting that California wait until 2015.

“Delaying linkage until both California and Quebec markets are well-functioning is likely to reduce cost and increase benefits,” California’s Emissions Market Assessment Committee said in a report released on September 24.

“This is unlikely to be the case at least until the second phase of the program in California is implemented in 2015,” the committee said.

California is currently also considering potential links with the cap-and-trade scheme called the Regional Greenhouse Gas Initiative (RGGI) in the northeast, and links with the “more than half dozen Chinese provinces that plan to implement emissions trading systems.”

Source: Reuters
Image Credits: Coal Power Plant via Wikimedia Commons

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James Ayre

James Ayre's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy.

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