Comments on the process of determining whether to pursue linkage of Washington’s carbon market with California and Quebec’s linked market

The Stockholm Environment Institute (SEI) provides expert comments to the Washington Department of Ecology regarding the potential linkage of Washington's cap-and-invest program with the Western Climate Initiative (WCI) market administered by California and Quebec. SEI warns that because Washington's program is currently more stringent and has a longer time horizon (through 2050) than California's (authorized through 2030), full linkage could significantly lower allowance prices, reduce state auction revenues, and undermine Washington's emission reduction goals. SEI recommends that full linkage be contingent on California extending its program beyond 2030 and increasing its 2030 cap stringency to address a large bank of unused allowances. As an interim measure, SEI proposes 'restricted linkage' via a quota on imported WCI allowances to balance cost containment with environmental integrity.

• Full linkage with the California-Quebec market is likely to significantly reduce Washington's carbon allowance prices and associated auction revenues. SEI estimates that linkage could reduce the effect of the Climate Commitment Act (CCA) on in-state emissions by approximately 40% by 2030 and decrease state revenues from allowance sales by about 40%, dropping from roughly $15 billion to $9 billion between the present and 2030.
• Washington's cap-and-invest program is demonstrably more ambitious than California's, as evidenced by Washington allowances trading at prices at least 50% higher. Washington requires an average emission reduction rate of 7% per year through 2030, compared to California's 4% annual rate of decline in emission caps over the same period.
• California possesses a large bank of unused allowances—estimated at more than 300 million units—which poses a risk to the environmental integrity of a linked system. Because this bank exceeds Washington's projected demand (13-14 million tCO2e cumulatively to 2030), linkage could allow higher emissions in Washington without corresponding reductions in California, potentially increasing global GHG emissions.
• SEI recommends that Washington make full linkage contingent on California taking three specific actions: explicitly extending its program beyond 2030, tightening its 2030 emissions cap to meet a revised goal of 48% below 1990 levels, and implementing measures to reduce the allowance overhang, such as an emissions containment reserve or price floor adjustments.
• As an alternative to immediate full linkage, SEI proposes 'restricted linkage' through a quota or limit on the import of WCI allowances. For the first compliance period (2023-2026), SEI suggests a limit of 2-3% of compliance units to provide immediate cost containment while ensuring the majority of emission reductions occur in-state.

APA

Stockholm Environment Institute (2023). Comments on the process of determining whether to pursue linkage of Washington’s carbon market with California and Quebec’s linked market. https://www.sei.org/wp-content/uploads/2023/05/sei-comments-on-wa-cca-linkage-15-may-2023.pdf

Chicago

Stockholm Environment Institute. Comments on the process of determining whether to pursue linkage of Washington’s carbon market with California and Quebec’s linked market. 2023. https://www.sei.org/wp-content/uploads/2023/05/sei-comments-on-wa-cca-linkage-15-may-2023.pdf.

Wikipedia

{{cite press release |author=Stockholm Environment Institute |title=Comments on the process of determining whether to pursue linkage of Washington’s carbon market with California and Quebec’s linked market |date=14 May 2023 |url=https://www.sei.org/wp-content/uploads/2023/05/sei-comments-on-wa-cca-linkage-15-may-2023.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{stockholmenvironmentinstitute2023comments, author = {{Stockholm Environment Institute}}, title = {{Comments on the process of determining whether to pursue linkage of Washington’s carbon market with California and Quebec’s linked market}}, publisher = {Stockholm Environment Institute}, year = {2023}, month = may, url = {https://www.sei.org/wp-content/uploads/2023/05/sei-comments-on-wa-cca-linkage-15-may-2023.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }