Cap-and-invest linkage

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California, Québec and Washington issue joint statement on linkage

All three governments formally expressed mutual interest in forming a shared carbon market for the first time on March 20. Read the joint statement.

Established by the Climate Commitment Act (CCA) in 2021, Washington’s cap-and-invest program is only the second of its kind in the United States. The first U.S. program began in California in 2012, and a similar program was launched in Québec, Canada the following year. Given their similar structure and goals, it was determined that "linking" the two carbon markets could yield important benefits in emissions reductions and long-term program sustainability. California and Québec connected their programs in 2014, creating one shared carbon market.

Washington seeks to link with the California-Québec market, and all three jurisdictions have expressed mutual interest in this possibility. California and Québec would need to undergo their own processes to decide whether to link. All three programs might need to revise some regulations, so finalizing linkage would not happen until at least 2025.

Find more information in our Focus on Cap-and-Invest Program Linkage resource.

What would linkage mean for Washington?

Linkage means combining Washington's cap-and-invest program with similar carbon markets.

A linked market, allowances issued by California and Québec could be used by Washington businesses to cover their emissions, and vice versa. The three jurisdictions would host joint allowance auctions and share a common allowance price. Market participants could also trade allowances across jurisdictions.

The Climate Commitment Act directs us to actively consider linking Washington's cap-and-invest program with other carbon markets and requires that our state's program be built in such a way that linking would be as seamless as possible. However, the law also requires us to review specific criteria to ensure linkage would benefit our state’s communities, economy, and climate goals.

Linkage overview video

The video provides an overview of how Washington's cap-and-invest market currently works and how it would change if linked with other markets.

What are some of the potential impacts of linking markets with California and Québec?

When California and Québec linked in 2014, it created a single market with a higher volume of emissions allowances being traded. Larger markets are generally more stable and have more consistent pricing, because a larger pool of buyers and sellers reduces price swings.

The agreement to link California and Québec's markets has enabled businesses to participate in these programs more sustainably and has generated lasting reductions in carbon pollution and much-needed revenue for critical climate projects.

Linkage Criteria: Preliminary Analysis Report

Read the report for our analysis of how linking would impact Washington’s communities, economy, and climate goals. The report includes our initial evaluation of the linkage criteria from the CCA and a summary of input received. We will continue to assess the potential impacts of linking and share a final assessment of the criteria before making a final decision to link. Read the Preliminary Linkage Criteria Analysis.

Linkage process and timeline

The decision to link markets is a multi-step process that will include additional opportunities for public input. 

In March, Washington, California and Québec issued a joint statement expressing mutual interest in linking carbon markets.

Below, you'll find a general timeline for how we expect this process to roll out, and we'll update this information if we anticipate any changes.

More information

Stay updated on next steps

We asked for public input during a Spring 2023 outreach period, which ended May 15, 2023. We used your input to inform our analysis of the linkage criteria laid out in the CCA and the preliminary decision to pursue linkage. 

The Preliminary Linkage Criteria Analysis includes background on linkage, a summary of input received, and Ecology’s initial evaluation of the linkage criteria from the CCA. 

Linkage rulemaking

Governor Inslee signed our request legislation in March, which allows us to make necessary changes to program rules to facilitate linkage. We have begun the rulemaking process, and you can find more details about topics under consideration here. 

We will host public meetings for the rulemaking starting in Summer 2024. Sign up for Climate Commitment Act email alerts to receive notifications for meetings and online comment opportunities. 

Future opportunities for input

In addition to the rulemaking process, there will be other opportunities for public input before we make a final decision on linkage. We will host a public hearing to get feedback on a draft linkage agreement and ask for input as part of an Environmental Justice Assessment. 

Sign up for Climate Commitment Act email alerts to receive notifications about these opportunities.

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