The North American Free Trade Agreement may be in trouble, but California, Quebec, Ontario and now Mexico are working together on a different type of trading: carbon.
California launched a carbon cap-and-trade market in 2013. A year later, the state partnered with the Canadian province of Quebec to link their carbon markets. Ontario has agreed to join next year.
Here comes Mexico, which is in the midst of a 12-month pilot program to study mechanisms for a carbon market it intends to launch next year, with plans to join California and the Canadian provinces within five years.
Companies in each of the market would be able to buy and sell carbon emission allowances with each other. “We are looking at the beginnings of a North American framework for a carbon market,” David Heurtel, a member of Quebec’s National Assembly, told The Globe and Maillast year.
Mexico is the 10th largest greenhouse gas emitter in the world, and on pace to become the world’s seventh largest by 2050. Under the 2015 Paris Agreement, it has pledged to cut carbon emissions by 22% below 2000 levels by 2030.