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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 argues that full linkage between Washington's carbon market and the California-Quebec (WCI) market currently poses risks to Washington's environmental goals due to misaligned time horizons and differing levels of ambition. Specifically, the authors highlight a large bank of unused allowances in California that could reduce in-state emission reductions and auction revenues in Washington. They recommend that full linkage be contingent on California extending its program beyond 2030 and tightening its 2030 cap. As an interim measure, the authors propose 'restricted linkage'—such as a limit on the import of WCI allowances (e.g., 2-3% of compliance obligations)—to provide cost containment while maintaining environmental integrity and revenue streams for overburdened communities.
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Document type: Statement