Washington Governor Bob Ferguson and California Governor Gavin Newsom announced progress toward Washington joining the California–Québec carbon market in 2027. Washington completed the final step in its linkage process by finalizing regulatory changes that make the state's market compatible with the California–Québec carbon market, such as aligning rules for how auctions are conducted.
Governor Newsom authorized California to move forward with linkage, making the formal findings legally required before the California Air Resources Board can proceed with linking markets. California law requires that the Governor make specific findings about a partner state's carbon market before the state's air resources board may proceed with linking. Québec is also working toward regulatory updates this year.
The three jurisdictions signed a linkage agreement earlier this year that laid the groundwork for joint operations. California was the first U.S. state to launch a carbon market in 2013 and joined with the Canadian province of Québec in 2014. Washington became the second U.S. state to launch a carbon market in 2023 and was designed to link with other markets.
In a linked market, each jurisdiction will contribute its supply of allowances to joint auctions, creating a single carbon price across all three. Larger markets provide more stable prices, which is intended to accelerate decarbonization by giving businesses certainty to plan long-term, capital-intensive projects. The Washington-California-Québec carbon market is expected to lead to greater total emissions reductions across the three jurisdictions.