Image source does not exist News Release: 2012-05-09 Air Resources Board Announces Release of Draft Regulations for Cap-and-Trade Linkage with Québec

Release #:12-18

ARB PIO: (916) 322-2990

Dave Clegern
(916) 799-7151

Air Resources Board Announces Release of Draft Regulations for Cap-and-Trade Linkage with Québec

Proposed linkage is next step toward November carbon allowance auction; provides California businesses with additional benefits, more options

SACRAMENTO - The California Air Resources Board today released proposed regulations to link its cap-and-trade program to Québec’s to form a joint carbon market to reduce greenhouse gas emissions, drive innovation and help move California toward a clean energy economy.

The release of the proposed regulations signals the start of a 45-day public comment period. The Air Resources Board will consider the proposed regulations at its regular meeting on June 28, 2012.

“Linking with Québec is a significant advance in California’s efforts to fight climate change and steer our economy toward a clean energy future,” said ARB Chairman Mary D. Nichols. “Linking provides more options to California businesses and lays the groundwork for other partners to join with us. This sends a strong message to two national governments that now is the time to support innovation, energy efficiency and the development of clean technologies.”

“Climate change is a global issue that must be addressed by all levels of government. By being among the first in North America, with California, to participate in the carbon market, our businesses will be in good shape to excel in a carbonless economy,” said Québec minister for Sustainable Development, Environment and Parks, Pierre Arcand.

“The cap-and-trade system is acknowledged as one of the most efficient and least costly economic tools available to reduce greenhouse gas emissions and is an important instrument in our transition to a green and prosperous economy. Québec is optimistic that its linking with California will be followed by many other partners,” he added.

The proposed linkage is another indication of the wide range of action taking place in the international arena as an increasingly large number of other states and nations are taking steps to fight climate change and reduce greenhouse gases. Starting next year 34 emissions trading programs will serve as the primary vehicle to drive greenhouse gas reductions in Norway, Iceland, Switzerland, Australia, New Zealand and 27 European Union members, along with California and Québec.  South Korea’s program will begin in 2015. Just last month Mexico also passed climate change legislation.

California’s cap-and-trade program, adopted in October, 2010 was designed to link with other cap-and-trade programs. Over the past five years California has been working with several states and Canadian provinces within the Western Climate Initiative on approaches to linking their emission trading. AB 32 called for regional associations.  It is expected that in the future other partners, notably Ontario and British Columbia may join.

Québec is the first to be proposed for linkage as its own program is sufficiently advanced and has equally rigorous reductions and reporting rules as California. Québec has roughly one-sixth the amount of greenhouse gas emissions from industrial and other sources as does California.

The draft linkage regulations provide guidelines to ensure that California and Québec carbon allowances are interchangeable at auction and can be used for compliance purposes in one another’s programs. The regulations also provide joint, enforceable standards for development and use of carbon offsets, as well as a range of steps to ensure the security of the market.

The proposed linkage regulations establish a sound framework for further investment in clean energy technology, businesses and jobs. By expanding the size of the carbon market, linking with Québec will provide increased liquidity to the carbon market and provides businesses in California with additional benefits and more options. More capital in the market helps expand the investment framework, providing additional support for businesses to choose investment in clean technologies, helping transform California’s economy away from its dependence on fossil fuels and toward a clean energy future.

The first linked auction between California and Québec is scheduled for November 14, 2012.

The proposed regulation can be found at:





ARB's mission is to promote and protect public health, welfare, and ecological resources through effective reduction of air pollutants while recognizing and considering effects on the economy. The ARB oversees all air pollution control efforts in California to attain and maintain health based air quality standards.