On August 30th, the California Air Resources Board (the Board) is holding a trial auction for the purchase and sale of carbon permits in what will be North America’s first full-scale carbon market. This will give the Board and about 150 market participants an opportunity to become acquainted with the electronic trading platform before the first real auction, scheduled November 14.
California is acknowledged as a leader in climate change initiatives. Undoubtedly, Canadian environmental regulators will look to California’s cap and trade model with great interest. This is particularly true of Canadian provinces that are partners with California in the Western Climate Initiative (WCI): British Columbia, Manitoba, Ontario, and Quebec. The WCI is a partnership between California and the aforementioned provinces to implement a joint strategy to reduce greenhouse gases. The success or failure of California’s cap and trade scheme is likely to influence any Canadian WCI member’s willingness to adopt a similar scheme.