California will hold its first carbon permit auction with the Canadian province of Quebec on 19 November 2014.
The first joint Québec-California carbon market auction was announced on Thursday (Sept. 18) by Québec Minister of Sustainable Development, Environment and the Fight Against Climate Change David Heurtel, and California Air Resources Board (CARB) Chairman Mary Nichols.
In 2012, California’s cap-and-trade programme became the first market to regulate carbon in North America. Since then, they have sought partners with whom to expand the market. Both Oregon and Washington states want to price carbon emissions, but have yet to join California. Quebec, on the other hand, began its own carbon market in late 2013.
When the two markets are linked in November 2014, business in either territory will be able to use more than 23 million permits to develop while meeting their compliance obligation. The linkage between the two markets will increase California’s market size by about 20 percent, according to analysts.
For both California and Quebec the timing of this coalition is timely. California is set to expand its programme to include transportation fuels next year, which will raise secondary market activity. California will also raise its carbon floor price to around USD 12.10, which will raise interest in permits priced below that amount. California EPA Secretary Matt Rodriquez hailed the news, saying that it is “a logical next step in our efforts to develop a cost-effective, inter-governmental model for reducing greenhouse gases”.