Pleasanton, California — Governor Gavin Newsom on Wednesday announced that he has formally authorized California air regulators to initiate the administrative process to link the state's Cap-and-Invest emissions trading market with Washington State, advancing a multi-jurisdictional framework designed to broaden regional climate compliance.
The executive action follows statutory findings executed under state law on September 21, in consultation with legal guidance received from the state Attorney General. The directive authorizes the California Air Resources Board (CARB) to begin formal rulemaking to connect California's decade-old carbon market, which has traded jointly with the Canadian province of Québec since 2014, with Washington's market.
California's Cap-and-Invest framework covers approximately 80 percent of statewide greenhouse gas emissions, establishing declining pollution caps on major industrial emitters, power utilities, and transportation fuel suppliers. Regulated entities exceeding allowable emissions must obtain compliance allowances, generating public funds that support regional transit systems, wildfire resilience projects, affordable housing initiatives, and consumer energy assistance. State regulators calculate that the market mechanism has returned over $16 billion in direct utility bill credits to California consumers.
In announcing the authorization during Climate Week events, state officials emphasized that aligning carbon trading with Washington will expand compliance options and provide economic stability across both jurisdictions. Washington Governor Bob Ferguson and CARB Chair Lauren Sanchez endorsed the partnership, describing the inter-state collaboration as a practical step to accelerate regional decarbonization goals while containing compliance expenses for businesses and ratepayers.
