The state of California entered an agreement with the governments of Quebec and New Zealand on Tuesday to work together on carbon markets and other climate action.

The joint declaration was signed during the 26th U.N. Climate Change Conference of the Parties (COP26) in Glasgow, Scotland.

The declaration states the three governments’ intention to share their experiences in the fight against climate change. It calls for exploring a future alignment of the governments’ cap-and-trade programs through discussions of program features such as cap setting, auctions, allocation and market rules.

The agreement was signed by Liane Randolph, chairwoman of the California Air Resources Board (CARB), on behalf of the state; Benoit Charette, Quebec minister of the environment and the fight against climate change; and James Shaw, New Zealand’s minister for climate change.

The three governments have been exchanging technical information on greenhouse gas reduction strategies for several years, CARB said in a release. The intent of the declaration is to strengthen the collaboration.

“Cooperation between jurisdictions on climate action is absolutely essential to addressing the climate crisis,” Randolph said in a statement. “We look forward to aligning our respective climate programs where possible and strengthening and amplifying the impact of these programs in the process.”

Charette said in a statement that the three governments share a belief in carbon markets “as an effective economic instrument to reduce greenhouse gas emissions.”

“In signing this declaration today, we are formalizing several years of sharing information, experiences and best practices about our respective cap-and-trade systems and are looking forward to working even more closely together,” Charette said.

Net-zero Transition

The joint declaration affirms the three government’s intention to support full implementation of the Paris Agreement.

It states their intent to transition to net-zero GHG emissions, while creating jobs and helping people affected by the shift toward a carbon-neutral economy.

One of the goals of the joint declaration is to promote the environmental integrity of carbon pricing instruments to reduce GHG emissions worldwide.

California’s cap-and-trade program has been in place since 2013. In 2014, the state linked its cap-and-trade program with Quebec’s system through the Western Climate Initiative.

New Zealand launched an “emissions trading scheme” in 2008, adding a cap to the program last year.

California’s emissions-trading program is the fourth largest in the world, behind the programs of China, the European Union and the Republic of Korea, according to the Center for Climate and Energy Solutions, an environmental policy think tank.

CARB describes its cap-and-trade program as a key element of the state’s GHG-reduction strategy. The program sets a limit on major sources of emissions in the state, with the cap decreasing each year.

GHG allowances may be purchased, but the minimum price for allowances at auction increases each year while the number of annual allowances is reduced. This creates “a steady and sustained carbon price signal to prompt action to reduce GHG emissions,” according to CARB.

Carbon-pricing Commitment

The signing of the joint declaration on Tuesday came a day after Quebec’s Benoit was joined by Juan Carlos Jobet, Chile’s minister of energy, to invite governments to endorse the Glasgow Declaration on Carbon Pricing in the Americas.

The declaration is an initiative of the Carbon Pricing in the Americas platform, which was launched in 2018 and is co-chaired by Quebec and Chile.

National and subnational governments across the Americas may participate in the initiative. By doing so, they declare their support for the Paris Climate Agreement and commit to developing carbon pricing instruments as a way to reduce greenhouse gas emissions.

“The Glasgow Declaration … makes increasing the price of carbon the linchpin of the changes required by the Paris Agreement,” Jobet said in a release. “Given the seriousness of the problem, there is an urgent need to massively reduce emissions, and, in this regard, the decade ahead is crucial.”