Four US states have expressed interest in joining the WCI emissions trading programme, Quebec’s environment minister told Carbon Pulse on Wednesday, which would more than double the scheme’s current membership while potentially bringing a merger between North America’s two carbon markets a step closer.

New York, Vermont, Oregon, and Washington are considering joining WCI, under which California and Quebec, and soon Ontario, trade, David Heurtel said on the sidelines of the UN climate talks in Paris.

He added that officials from WCI and RGGI, which covers the power sectors in New York and Vermont as well as seven other north-eastern states, are exploring ways of collaborating, confirming New York Governor Andrew Cuomo’s announcement in October that he had ordered state agencies to look into linking the two schemes.

Oregon is “seriously considering” launching a state carbon market, Heurtel said.

Washington Governor Jay Inslee has said he wants to use his executive authority to design a cap for his state’s emissions by next summer.  Voters in Washington look poised to vote on a separate carbon tax initiative after supporters on Wednesday said they had collected enough signatures for it to appear on next November’s ballot.

Quebec Premier Philippe Couillard last month said his province is eager to cooperate with New York on carbon markets, even though they are members of different trading programmes.

New York and Vermont could in theory have their power sectors regulated by RGGI, and put other sectors such as transportation in WCI, which currently caps road vehicle emissions at a fuel-distributor level.

However, one observer familiar with the schemes and referring to a recent announcement by five RGGI members, said a more likely outcome would be RGGI expanding its market to cover transportation, which would make a potential link or merger between the two programmes more feasible.

Connecticut, Delaware, New York, Rhode Island, Vermont, and Washington DC last month announced they will collaborate to develop “potentially” market-based policies to cut CO2 from transportation, the largest source of GHGs in the region.

RGGI’s members have kicked off discussions over how to extend their market post-2020, paving the way for more jurisdictions or emitting sectors to be added.

The review is expected to be finalised by next summer, after the deadline for US states to either submit their final plan for how to comply with the federal Clean Power Plan or request an extension.

In the meantime, WCI’s membership is set to rise on Thursday when Manitoba announces that it will launch a provincial carbon market and seek to link it to the US-Canada scheme – which represents economies worth some $3 trillion.

MEXICO

Heurtel, along with Ontario counterpart Glen Murray, accepted an award from carbon trading lobby group IETA on Wednesday evening at COP-21 in Paris, for the provinces’ efforts in developing market-based mechanisms to fight climate change.

In his acceptance speech, Murray said he also hopes the Canadian government under newly-elected Prime Minister Justin Trudeau “plays a larger role in engaging Mexico” on the subject of carbon markets.

Mexico is expected to establish a domestic carbon offset market in 2017 under its national carbon tax regime, and seek links to the WCI – potentially providing emitters in Canada and the US with cheaper compliance options.

By Mike Szabo – mike@carbon-pulse.com