US: Vermont, Quebec have had discussions about carbon programme

Vermont is discussing the possibility of integrating the Regional Greenhouse Gas Initiative (RGGI) market with California and Quebec’s carbon cap-and-trade scheme, but the state does not plan to leave the US’s first cap-and-trade programme, a state official said Wednesday.

Quebec and California are aggressively recruiting new members to their economy-wide cap-and-trade programme. California has targeted Washington and Oregon as potential new members while Quebec has spoken with Ontario about collaborating to fight climate change. No states have publicly expressed plans to join the California-Quebec programme.

Quebec Prime Minister Philippe Couillard told Bloomberg News on Tuesday that Quebec is discussing a regional market with the governors of New England states, specifically Vermont, and Ontario. Couillard added a Quebec-California only carbon market is not ideal, according to the report.

ICIS left messages with the Prime Minister’s office about the issue.

A Vermont environmental spokesman confirmed Vermont and Quebec have had preliminary discussions about how to strengthen RGGI by integrating with other carbon markets, such as Quebec and California. The spokesman said the discussions are preliminary and no specifics are being discussed yet.

“We believe that carbon markets will be stronger if we bring in more players, and we have had some discussions about how we can bring our carbon pricing programmes closer together,” the spokesman said.

The spokesman added Vermont is not considering leaving RGGI. RGGI, which regulates power emissions from nine northeastern states, has not been part of those discussions yet, because the Vermont-Quebec discussions are in the early exploratory stages, the spokesman said.

RGGI officials did not immediately respond to questions about a possible integration of the RGGI and California-Quebec carbon markets.

A former RGGI commissioner said Tuesday that it would be difficult for the RGGI and California-Quebec carbon markets to link because of the significant differences in prices. However, he said a future linkage was possible.

“There is an opportunity as the allowance prices get closer to link,” the commissioner said.

California carbon allowances are trading in the $11.90-12.00/tCO2e range while RGGI allowances are closer to $5.00/tCO2e, according to data from the InterContinental Exchange. Dan X. McGraw