Program Linkage

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California’s Cap-and-Invest Program is currently linked with the Cap-and-Trade System of Québec. This linkage commenced on January 1, 2014 (when California's program was referred to as "Cap-and-Trade"). Background information on the linkage with Québec and the required regulatory processes for linkage can be found below. An archive version of this webpage is also available.

The Cap-and-Invest Regulation includes general requirements for linking to other trading programs. To enable the mutual acceptance of compliance instruments from another emissions trading program, California must initiate a public process to amend the Cap-and-Invest Regulation. Linkage allows for the use of compliance instruments from an external greenhouse gas emission trading system to meet compliance obligations pursuant to the California Cap-and-Invest Regulation, and the reciprocal approval of compliance instruments issued by California to meet compliance obligations in the external trading program. Any staff recommended amendments for Board consideration will go through a full rulemaking process as required under the Administrative Procedure Act and the linkage must meet the requirements of Senate Bill 1018 (codified at California Government Code § 12894(f).

Linkage with Québec Cap-and-Trade System

In May 2012, CARB released proposed amendments to the Cap-and-Trade Regulation to approve a linkage between the California and Québec Cap-and-Trade Programs. After the release of the proposed amendments, the Legislature enacted Senate Bill 1018 which requires state agencies to notify the Governor if the agency intends to take action to link with another ETS, and the Governor to make specified findings prior to the agency taking action to approve the linkage. 

In February 2013, CARB’s Executive Officer sent a letter to Governor Edmund G. Brown Jr. requesting that the Governor consider and make the SB 1018 findings for linkage with the Québec Cap-and-Trade System. The Governor issued the required findings in April 2013 and directed CARB to take a number of additional steps prior to linkage, including preparing a linkage readiness report. In October 2013, the proposed amendments to the Cap-and-Trade Regulation were approved, recognizing instruments from Québec starting on January 1, 2014. The linkage itself was effectuated through this regulation amendment. CARB and the Government of Québec also developed a non-binding agreement expressing their intentions to continue consulting and coordinating with each other related to the already-adopted linkage. In November 2013, Chair Nichols transmitted the linkage readiness report to the Governor. Pursuant to California’s regulatory process, California’s Cap-and-Trade (now Cap-and-Invest) Program linked with Québec’s Cap-and-Trade System on January 1, 2014.

California-Québec Linkage Documents

Other background documents

Linkage with Ontario Cap-and-Trade Program

California and Québec also linked their Cap-and-Trade Programs with the emission trading system (ETS) in Ontario for the first half of 2018. Similar to the process CARB undertook when proposing linkage with Québec, CARB requested the Governor make the required findings regarding Ontario’s Cap-and-Trade program in January 2017. At the same time, CARB proposed amendments to the Cap-and-Trade Regulation to link with Ontario. The Governor made the findings required under California Government Code § 12894(f) in March 2017 and the Board approved the amendments to the Cap-and-Trade Regulation in July 2017. Linkage of California’s Cap-and-Invest Program with Ontario’s Cap-and-Trade Program occurred on January 1, 2018.

On July 3, 2018, the Ontario government published a regulation (386/18) revoking Ontario’s Cap-and-Trade Regulation (144/16) and suspended all Ontario entity accounts. With Ontario’s departure from the linked carbon market, California and Québec worked together to ensure that the environmental integrity and stringency of each of their respective programs and markets was maintained. CARB’s goal was to make certain that California’s program continued to reduce emissions of climate-changing gases as a crucial part of California’s efforts to combat the existential threat of climate change, while also continuing the smooth operation and integrity of the linked California and Québec carbon market. In December 2018, the Board approved amendments to the Cap-and-Trade Regulation to remove Ontario as a recognized linked ETS.

California-Ontario-Québec Linkage Documents

Potential Linkage with Washington Cap-and-Invest Program

In September 2024, California, Québec, and Washington announced the intent to share information and collaborate in pursuit of linkage between the California and Québec Programs and Washington’s Cap-and-Invest Program. In June 2026, the three jurisdictions signed a linkage agreement, an initial step toward linking their carbon markets. In early September 2026, CARB requested Governor Gavin Newsom consider and make the SB 1018 findings necessary for a future linkage with Washington’s Cap-and-Invest Program. In late September 2026, the Governor made the required findings. CARB must complete a formal rulemaking process with Board adoption of Cap-and-Invest Regulation amendments to enable the acceptance of compliance instruments from Washington. As requested in the Governor’s Response to Request for Findings Under SB 1018, CARB also plans to submit a readiness report to the Governor and the Secretary for Environmental Protection prior to proposing regulatory amendments to link with Washington.

Documents Related to Potential California-Québec-Washington Linkage