Washington State Moves to Link Carbon Market With California and Quebec

The shared market could start as early as 2027, aiming to decrease and stabilize decarbonization costs.

Published on Mar. 5, 2026

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Washington's cap-and-trade program could soon link with carbon markets in California and Quebec, a move that agency officials say would decrease and stabilize decarbonization costs. The state Department of Ecology released a draft linkage agreement and will take public feedback through May 1. The shared market could start as early as 2027.

Why it matters

Linking Washington's carbon market with California and Quebec would add extra security to absorb market shocks and likely lead to decreased carbon prices in Washington and increased prices in California and Quebec. This could provide more certainty about costs for companies investing in decarbonization.

The details

Under the proposal, the three jurisdictions would hold joint carbon allowance auctions, allowing businesses to buy and sell credits across state and provincial lines. Washington's carbon market has faced volatility since its enactment in 2021, with prices soaring in the first year but then dropping dramatically in 2024 when an initiative to repeal the program was on the ballot (it ultimately failed). Linking the markets is expected to stabilize prices.

  • The draft linkage agreement was released on March 5, 2026.
  • The public feedback period on the agreement will run through May 1, 2026.
  • The shared carbon market could start as early as 2027.

The players

Washington Department of Ecology

The state agency that oversees Washington's cap-and-trade program and released the draft linkage agreement.

California

The state that operates a carbon market that could be linked with Washington's.

Quebec

The Canadian province that operates a carbon market that could be linked with Washington's.

Todd Myers

Vice president of research for the Washington Policy Center, a critic of Washington's Climate Commitment Act who believes linking the carbon markets is beneficial.

Bob Ferguson

The governor of Washington, who supports the proposal to join the carbon markets in California and Quebec.

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What they’re saying

“Together, we are demonstrating that states and provinces can meet this moment.”

— Casey Sixkiller, Washington Department of Ecology Director (dailyfly.com)

“Because we went third after both California and Quebec, we were able to learn lessons. In order to link with us, California had to reauthorize and extend their program, which is huge.”

— Leah Missik, Washington legislative director for Climate Solutions (dailyfly.com)

“It makes a bad system less bad.”

— Todd Myers, Vice president of research for the Washington Policy Center (dailyfly.com)

What’s next

The public feedback period on the draft linkage agreement will run through May 1, 2026. If approved, the shared carbon market could start as early as 2027.

The takeaway

By linking its carbon market with California and Quebec, Washington is taking a significant step to stabilize its carbon pricing system and work toward its ambitious 2030 emissions reduction goals. This move demonstrates how states and provinces can collaborate to address the global challenge of climate change.