Carbon union on US west coast

The governors of Oregon and Washington states in the US north-west have agreed to put a price on emissions and adopt fuel standards, bringing their efforts to cut greenhouse-gas pollution closer to those of California and British Columbia.

Under an accord signed this week by leaders of the three US states and the Canadian province, Oregon will build on existing programs to set a carbon price and Washington will impose emissions limits and establish a market to meet those caps. British Columbia and California will maintain their current efforts and all four will link up "where possible" for consistency.

The agreement falls short of creating a regional carbon market sought by California, which began a cap-and-trade program when the US government could not come up with a national system in 2010.

A movement to create a market across the western US and parts of Canada collapsed two years ago after some states sought other ways to cut emissions.

"This is not a revolution," California Governor Jerry Brown said in San Francisco where the deal was signed. "You are witnessing an historic, small, but powerful step. It's only the beginning. You watch. Next year and the year after that and the year after that, this will spread until finally we get a real handle and grasp on what is the world's greatest existential challenge."

Mr Brown said the group would "soon be joined by provinces on the coast of China", with a meeting scheduled with leaders from that country in January.

Washington and Oregon agreed to adopt low-carbon fuel standards, and the four governments said they would "harmonise" greenhouse-gas reduction targets for 2050. They would also support the integration of regional electricity grids to connect power markets and expand access to renewable resources.

California's carbon market was "designed with an eye towards potential inclusion within a larger regional trading program", the state's Air Resources Board said in a proposal in May last year to allow links with other governments. The state and Canada's Quebec province had already aligned programs and planned to tie in emissions markets next year so polluters could trade carbon allowances across their jurisdictions.

A set number of allowances, each allowing the release of a tonne of carbon, would be issued through free allocations and auctions. That pool of permits would shrink over time to reduce emissions, and polluters with more allowances than they needed could sell them.

British Columbia was working with California and Quebec to develop a complementary cap-and-trade system. Quebec already had a carbon tax.

Washington, Oregon, California and British Columbia were part of a group that formed in 2007 to create a regional market for greenhouse-gas emissions. Known as the Western Climate Initiative, it ended in 2011 when California, British Columbia and Quebec agreed to move forward with emissions-trading systems and the others pursued non-market-based approaches.