Carbon Trading Hits New US Milestone With Move to Link Markets

The state of Washington released a recommendation to link its carbon market with similar programs in California and Quebec, a major milestone for state-level climate policy.

By linking their cap-and-trade programs, the jurisdictions would share a common allowance price, hold joint auctions and be allowed to trade allowances across jurisdictions. This would generate more liquidity for the carbon market, insulating it from price shocks, as well as more confidence and stability for businesses covered by the program, according to Caroline Jones, senior analyst for US climate at the Environmental Defense Fund.

Cap-and-trade programs force certain businesses to buy ...