California just aligned its carbon market with Washington's. Here's why that matters

Conrad Swanson, The Seattle Times on Sep 18, 2025

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California’s lawmakers over the weekend extended the state’s carbon market for years — and rebranded it to mirror Washington’s landmark climate policy.

The two West Coast states are pulling to the head of the national pack in their efforts to reduce planet-warming greenhouse gas emissions while the federal government boosts the coal, gas and oil industries.

Originally set to expire in 2030, California’s carbon market will now extend through 2045, the Legislature decided. The move injects a sense of stability into the rocky political landscape of climate policy, an encouraging development as the two states consider whether to join forces, said Joel Creswell, who manages the climate pollution reduction program for Washington’s Department of Ecology.

“We’re not waiting for the federal government to give us permission,” Creswell said. “This is the way we can make progress, and we’re not wasting time.”

The development comes as a piece of good news for climate advocates within the states after President Donald Trump has flexed his influence from Washington D.C., showing a surprising ability to block a wide slate of renewable energy projects and even quash states’ abilities to phase out gas-powered vehicles.

But these carbon markets, which place a monetary value on greenhouse gas emissions and cap the amount top polluters are allowed to pump into the atmosphere, are firmly rooted in Washington and California’s own authority, Creswell said. Trump can’t stop them; though he has targeted California's market and other climate policies in an executive order.

California launched its market, originally called “Cap and Trade” in 2013, linking up with the one in the Canadian province of Quebec the next year. Washington launched its market in 2023 after the passage of the Climate Commitment Act. The three governments have been considering whether to merge their markets, in a process called linkage, for years now.

California’s market had been set to expire in 2030 but now, with a decade and a half of extra runway, Creswell said the path toward linkage is clearer.

In these markets, top polluters pay for emissions by buying allowances at auctions. This raises billions for climate and environmental justice initiatives across the states while over time the governments ratchet down the number of allowances sold, thereby reducing pollution. In Washington, the auctions have raised more than $3 billion.

Now, these top polluters understand they’ll be required to participate in the market for the years to come, Creswell said, which allows them to plan decades into the future and injects stability into the carbon economy.

Investors love stability, Creswell noted.

California even adopted the name of “Cap and Invest,” matching its brand with the name Washington’s market has held since it first launched.

Public officials and climate action advocates celebrated the move.

“There has never been a more important time for states to lead on this issue, and we look forward to continue work with California to link our carbon markets,” Ecology Director Casey Sixkiller said on social media. ”A combined market will help businesses make long-term investments in reducing carbon pollution and building a clean energy economy.”

The notion is that these combined markets can better put a dent in the greenhouse gas emissions warming our planet and build momentum meant to encourage other states and provinces to follow suit.

“Despite federal attacks on environmental and clean energy programs, Washington and California continue to lead the nation in driving down air pollution while generating revenue to invest back into their local communities,” said Michael Mann, executive director of the climate nonprofit Clean & Prosperous Washington.

Ten other American states have trade programs meant to cut greenhouse gas emissions, among them are New York and Oregon, both of which are considering their own statewide carbon markets.

Washington has a key role to play in encouraging other states to join up, Creswell said. It’s one thing for California — with its money, resources and population — to enact this type of climate policy. But Washington’s participation shows other, smaller states that this is an attainable endeavor.

Although the concept of linkage is years old at this point, it also fits within the broader pattern of states banding together to enact their own policies in the absence of a cohesive federal strategy. Washington, Oregon and California also recently formed the West Coast Health Alliance to issue their own recommendations around COVID-19 vaccinations after federal regulators slashed access to the shots for broad swathes of the population.

For the possibility of a combined carbon market, California, Quebec and Washington must continue drafting their own sets of rules for how the process would work, Creswell said. The markets could be joined by early next year or sometime in 2027.