Washington, California and Quebec link carbon markets in largest subnational climate partnership
Governor Ferguson signed the agreement in Seattle on June 29 to join Washington's cap-and-invest programme with the decade-old California-Quebec cap-and-trade system, creating a three-jurisdiction carbon bloc covering roughly 130 million people; the merged market is expected to start operating in 2027
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Summary
Washington Governor Bob Ferguson signed a carbon-market linkage agreement on June 29 to merge Washington's cap-and-invest programme with the California-Quebec cap-and-trade system that has been operating since 2014. The three-jurisdiction market, covering roughly 130 million people across two U.S. states and a Canadian province, becomes the largest subnational carbon pricing bloc in the world once it begins operating in 2027, pending parallel regulatory updates in each jurisdiction.
Why it matters
The deal locks in cross-border carbon pricing at the subnational level as federal U.S. climate policy has stalled, and gives California and Quebec's established system a significant new entrant. Linked allowance pools reduce price volatility and make long-horizon clean-energy investment more predictable for businesses in all three jurisdictions.
What to watch
- Regulatory processes in each jurisdiction required before 2027 launch.
- Whether the combined market attracts further subnational members (Oregon has its own programme).
- How the linked price per tonne compares to the standalone Washington price after integration.