Cap-and-invest linkage

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 2013, at the same time a similar program was started in Québec, Canada. 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.

Now, Washington is starting the process of determining whether linking our carbon market with these other jurisdictions would be beneficial. A decision will be made in summer 2023 or later. Then, California and Québec would need to undergo their own processes to decide whether to link, and all three programs might need to revise some regulations, so finalizing linkage would not happen until at least 2025.

What would linkage mean for Washington?

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

A linked cap-and-invest program would mean that Washington would have joint allowance auctions with California and Québec, and all three jurisdictions would share a common allowance price. Market participants could also trade allowances across jurisdictions — meaning allowances issued by the other two programs could be used by Washington businesses to cover their emissions, and vice versa.

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.


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 emitters reduces price swings when participants enter or leave the program.

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.

However, the potential impacts of linking Washington's market are still unknown. We will evaluate a number of considerations as we work to determine whether to link.

We are currently gathering information to better understand the potential impacts of linking and are asking for information and resources that may help our analysis. If you have something to share, let us know!

Considerations


Linkage process and timeline

The decision to link markets is a multistep process. First, we will seek input from our partners and the public on whether linkage would be good for Washington and start to evaluate the linkage criteria set forth in the law. The other two jurisdictions would also need to go through their own processes to see if they want to link.

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


Share your comments on linking

We want to hear your input on whether you think that connecting to other carbon markets would be beneficial to Washington. We will use your input to inform our analysis of the linkage criteria laid out in the CCA and the decision on whether to pursue linkage. We are providing multiple options for submitting your comments to us, including online listening sessions, an online survey (coming soon), email, mail, and voicemail. 

Right now, we would like to hear your input on:

  • Should Washington link its carbon market to California and Québec's?
  • Do you have recommended informational resources that could inform our analysis of the linkage criteria?

Please share your comments with us by May 15, 2023.

There will be another opportunity for public input before we approve a linkage agreement, sometime in 2024 or later. You can sign up for Climate Commitment Act email alerts to stay up-to-date on our work.

These sessions are an opportunity for you to share your ideas, thoughts, and concerns related to linkage. Each session will begin with a brief overview of the cap-and-invest program, including information about linkage and the criteria we are directed to consider. We will then have time for questions and discussion.

All three listening sessions will cover the same content, so we ask that you attend only one, to ensure everyone who wants to participate is able to be heard.

Please click one link below to register for your preferred session on Zoom:

We offer free language services about our programs and services for people whose primary language is not English. Contact CCAlinkage@ecy.wa.gov or 425-466-5358 to request an interpreter for an online listening session. Please send your request at least two weeks before the meeting. If we are not able to provide an interpreter at the meeting, we will find another solution to ensure that your questions are answered and your comments are received.

You can share your comments about linkage by filling out this survey. This is a complex topic, so we encourage you to take your time reviewing the information on this webpage and the survey questions before completing the survey. Please share your comments with us by May 15, 2023.

You can also provide feedback on linkage by:

  • Inviting our staff to meet with your organization or community group
  • Emailing us at CCALinkage@ecy.wa.gov
  • Leaving us a voicemail at 425-466-5358
  • Sending written comments to:

Stephanie Potts
WA Dept. of Ecology - Air Quality Program
P.O. Box 47600
Olympia, WA 98504-7600

We held a forum for tribal governments on Feb. 9, 2023, on the topic of linking Washington's cap-and-invest program. If you represent a tribal government and would like to meet with us, please contact us at CCALinkage@ecy.wa.gov.

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