California carbon futures rose to the highest price in almost two months after Quebec approved changes to allow links between their cap-and-trade systems.
Carbon markets in Quebec and California will be connected next spring, and their governments will hold the first joint auction of carbon allowances in August, Yves-François Blanchet, Quebec’s minister of sustainable development, environment, wildlife and parks, said in a statement on his agency’s website.
“Quebec’s action sets the stage to link our two emissions- trading programs to provide a model that other states and provinces can join,” Mary Nichols, chairman of the California Air Resources Board, said in a statement on her agency’s website.
The board voted in June to delay a decision on aligning with Quebec’s carbon system after a bill was signed into law requiring approval from the governor. The agency will now request the governor’s review, Nichols said today. Should the programs come together, companies could use carbon permits issued as part of Quebec’s cap-and-trade program to comply with emission limits in California, which will start the world’s second-largest carbon market on Jan. 1.
Futures based on California carbon allowances for 2013 advanced 30 cents to $13.75 a metric ton, the highest since Oct. 19, according to data compiled by CME Group Inc. (CME)’s Green Exchange.
Under California’s program, the state will cap carbon emissions from power generators, oil refineries and other industrial plants and cut that limit gradually to reduce emissions to 1990 levels by 2020. Companies bound by the cap can sell allowances to other emitters and investors. The state plans eventually to regulate 85 percent of the greenhouse gases released in California.
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