Starting January 1, 2014, California and Quebec have signed an agreement to integrate their cap-and-trade programs.
On October 1, 2013, the California Air Resources Board (CARB) and the Government of Quebec signed an agreement defining the steps and procedures to link California and Quebec cap-and-trade programs. The agreement, a result of more than five years of joint efforts of CARB and Quebec, defines procedures to harmonize and integrate their respective emissions trading programs. By November, CARB must submit a progress report to the California Environmental Protection Agency and California Governor Jerry Brown.
In May 2012, CARB released draft amendments to enable linkage of its emissions trading program with Quebec’s, and in December 2012, Quebec amended its cap-and-trade regulations to facilitate linkage with California’s program and expand to other jurisdictions. In February, CARB requested Governor Brown to make findings (required under SB 1018) regarding the proposed linkage. In April, Governor Brown wrote to CARB confirming that the cap-and-trade programs met the minimum requirements and permitted CARB to start the linkage from January 1, 2014.
The agreement allows regulated entities to use compliance instruments interchangeably across both jurisdictions and make changes to their respective offset protocols and offset credit issuance procedures. It calls for a joint auction system using common electronic platforms to ensure program compatibility and to recognize regulated entities in both jurisdictions. A Consultation Committee will oversee procedure implementation and report annually to CARB and the Government of Quebec.
The 2006 California Global Warming Solutions Act (Assembly Bill 32) requires California to reduce emissions to 1990 levels by 2020. In 2009, Quebec adopted a stricter target of reducing emissions to 20 percent below 1990 levels by 2020. The duo expects the linkage to serve as a model for states and provinces seeking cost-effective emissions reduction mechanisms.
October 2, 2013 via Energy Solutions Forum
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Originally published by Breaking Energy