IETA and EDF lay out a roadmap for linking California and Washington State’s carbon markets

SAN FRANCISCO (20 July) – Washington state and California share an interest in eventually linking their carbon markets, according to a paper by the International Emissions Trading Association (IETA) and the Environmental Defense Fund (EDF).

Washington’s rulemaking already adopts many practices from California, including rules governing the use of offsets and the use of a common auction platform to sell allowances. These alignments show substantial coordination and significant forethought, according to the IETA-EDF paper.

The IETA-EDF paper argues that linking is best achieved after alignment of key program designs. To that end, Washington State’s new carbon market could further facilitate a link with California’s carbon market by making changes to its noncompliance penalties, price ceiling mechanisms, and cap setting processes.

“A carefully designed link between California and Washington would reduce costs and enhance ambition”, says Clayton Munnings, Strategic Advisor at IETA.

“By linking carbon markets, states can boost the benefits of climate action, clean air and the clean energy economy,” said Katelyn Roedner Sutter, Senior Manager for US Climate at EDF.

“With climate impacts bearing down on communities across the West, we need climate leaders like Washington and California to leverage opportunities that ramp up ambition, and unifying carbon markets across jurisdictions would do just that.”

Regulators in Washington state are presently drawing up rules for the market’s launch next year, after the legislature passed the Climate Commitment Act in April 2021. California’s system has been in place since 2013 and has been linked with Quebec’s carbon market since 2014.

The paper can be found on IETA’s website.