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On 28 February 2018, California, Québec and Ontario released the results of their first joint allowance auction, which was held on 21 February. California and Québec linked their cap-and-trade programs with Ontario at the beginning of the year. All three jurisdictions are part of the Western Climate Initiative (WCI) and designed their programs to resemble one another, facilitating the linking process.
This auction marked the largest number of allowances offered to date under a WCI auction (over 98 million allowances) due to reintroduced allowances from previous undersubscribed auctions. Despite this record number, the auction sold out and cleared slightly above the minimum price (USD 14.53) at USD 14.61. The auction also included over 8.5 million future vintage allowances that cannot be used by companies for compliance until 2021, signaling confidence in the future of the program.
Mary Nichols, head of the Californian Air Resources Board (CARB), the entity administering the Californian program, called the auction “a new chapter in the fight against climate change” noting that the three jurisdictions cover a population of 61 million with a combined Gross Domestic Product (GDP) that would make it the fourth largest economy in the world. Ontario’s Minister of the Environment and Climate Change, Chris Ballard, stressed that Ontario was now part of the largest carbon market in North America, giving businesses “more choice and lower cost options” than an unlinked Ontario market would have.
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