California and Washington move to merge carbon markets, targeting billions in savings

Governor Gavin Newsom used Climate Week in New York to unveil a plan to join California’s cap-and-invest program with Washington State’s carbon market, creating a larger, more resilient emissions-trading system. The California Air Resources Board will begin the required public review, and the first joint allowance auctions are expected in 2027. Officials estimate the partnership will deliver $10 billion in direct electricity bill relief and funnel roughly $8 billion into the state’s Greenhouse Gas Reduction Fund by 2030.

Modeling from Greenline Insights, cited by the Environmental Defense Fund, suggests the combined market could eliminate an additional 45 million metric tons of CO₂ through 2045, comparable to shutting down 12 coal plants. The initiative broadens the California-Quebec market that has operated since 2014 and is framed as a state-level response to the Trump administration’s rollback of federal greenhouse-gas regulations. Newsom also announced a new cooperation agreement with Spain on clean-energy technologies.