A Roadmap for Linkage: Aligning California and Washington’s Carbon Prices

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Co-authored by IETA and EDF, this paper finds that Washington state and California share an interest in eventually linking their carbon markets.  

Washington’s rulemaking already adopts many practices from California, including rules governing the use of offsets and the use of a common auction platform to sell allowances. These alignments show substantial coordination and significant forethought.

The IETA-EDF paper argues that linking is best achieved after alignment of key program designs. To that end, Washington State’s new carbon market could further facilitate a link with California’s carbon market by making changes to its noncompliance penalties, price ceiling mechanisms, and cap setting processes.