Under AB 32, California authorized a statewide cap-and-trade program in 2006. Under Chapter Q-2, r. 46.1, Quebec did the same in 2012. California and Quebec linked their cap and trade systems under the Western Climate Initiative in 2014. They were briefly linked with Ontario was well, until the latter’s termination in mid-2018. The California program covers sources responsible for approximately 80% of the state’s GHG emissions. In 2017, California AB 398 was passed to provide direction on the cap-and-trade system post-2020 to help achieve California’s climate goals. Quebec’s system covers fossil fuel combustion and industrial emissions in power, buildings, transport, and industry. Quebec and California gave themselves the power to set a minimum price for an emission unit (equivalent to one ton of carbon dioxide). They also gave themselves the power to remove unsold units from the market, ensuring supply doesn’t outstrip demand. Quebec banks the revenues from its carbon market in a fund dedicated to financing low-carbon infrastructure projects.
A recent ClimateXChange study found California’s program had benefits five times its costs.