California is expanding it new cap-and-trade program to include three Canadian provinces – British Columbia, Quebec and Ontario, creating the largest regional carbon trading system in North America.
Originally, seven Western states and four Canadian provinces joined to create the Western Climate Initiative regional trading program in 2008. Now, with Republican majorities most of the western states pulled out, leaving the Canadian provinces to join the California plan. Manitoba is also considering joining.
California’s program will still cover two-thirds of greenhouse gas emissions emitted by what would have been the Western Climate Initiative because California and Ontario are the largest regional economies by far.
The cap-and-trade system will cover industrial plants and transportation fuel, allowing companies to buy and sell emissions allowances among themselves to cut their costs.
The hope is that the program will eventually evolve into a broader North American system, when political realities allow.
California’s program will be triple the size of that currently operating in the Northeast, which covers only power plants.
The system will be critical in demonstrating that putting a price on carbon can work in the US, and that’s it not a cap-and-tax system the way Republicans have portrayed it.
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