Washington carbon prices surge above California

Prices in the newest US regional emissions trading scheme spike above more established California market on the back of more ambitious reduction target

Carbon allowances in the new Washington ‘cap and invest’ market are trading at a huge premium to the equivalent market in California, largely due to a more ambitious emissions reduction target. But with California regulators planning to raise their targets, prices could begin to converge in 2025. And a link between the systems could be on the cards for 2027. Washington carbon allowances were auctioned at around $56/t at the end of May in the second quarterly auction since the market launched in February. The equivalent quarterly auction in the joint California-Quebec market cleared at $30.33/t. December 2023 allowances are trading “in the low to mid-$60s” on the secondary market in Washingto