SAN FRANCISCO, Nov 5 (Reuters) - California is ready to link its carbon cap-and-trade program with a similar effort in the Canadian province of Quebec, a move that could pave the way for further expansion of the market in coming years, state officials said on Tuesday.
In a letter to Governor Jerry Brown, California Air Resources Board chair Mary Nichols said that starting on Jan. 1, businesses in both jurisdictions will be able to surrender carbon emission permits generated by either territory to meet their obligations under the program.
California has said that expanding the reach of its carbon market, which came into force at the beginning of this year, will help drive down compliance costs and amplify the program's environmental benefits. Officials have said they hope to add more partners soon.
"Linking the programs will provide a framework for additional partners to join and demonstrate a workable template for urgently needed climate action," Nichols said.
California has set a goal of cutting its output of heat-trapping greenhouse gases back to 1990 levels by 2020. The much smaller province of Quebec has a similar emissions reduction target.
Nichols added that more time is needed before California and Quebec can hold a joint carbon allowance auction, however.
Although California has already held four quarterly auctions, Quebec will not hold its first official sale until next month, meaning there is not sufficient time to fully vet the electronic platform.
"We recommend that joint auctions only occur after readiness for joint auctions is confirmed," Nichols said, adding that she expects the systems to be ready sometime in 2014.
(Reporting by Rory Carroll; Editing by Joseph Radford)