Washington state eyeing California carbon market

Washington state has approved its legislature to develop a plan to reduce its emissions, including potential linkage with the California carbon market.


Washington was an original member of the Western Climate Initiative, a group of US states and Canadian provinces that aimed to reduce their emission 15% below 2005 levels by 2020 in order to spur investment in clean energy technologies.


The state legislature is now targeting a reduction of emissions to 1990 levels by 2020, the same goal being sought by the California carbon market.


It was recently announced that Quebec will most likely link with the California carbon market beginning in 2014.


Should Washington opt to join the California carbon market as well it would provide increased liquidity and market size to what is already the world’s second largest carbon market.


Analysts at Thompson Reuters forecast the California carbon market to be valued at $2.3 billion in 2013.


Last year only one allowance auction was held, yet over $300 million was generated.


The California carbon market’s auction held this past February saw all 12.9 million allowances for delivery in 2013 reach a settlement price of $13.62, in response to high participation from regulated businesses in the state such as Pacific Gas & Electric, Southern California Edison, Shell Energy, Phillips 66, and Exxon.