The European Commission (EC) and the government of California (United States) have agreed to strengthen bilateral cooperation on carbon markets in particular through carbon pricing and the development of practical paths to decarbonise their respective economies. With this initiative, two global carbon markets are taking a decisive step to align their systems and remain at the forefront of action on transition to a low-carbon economy.
Both California and the EU have developed emissions trading system (ETS): the Californian ETS system covers roughly 85% of the state's emissions and is already linked to the Quebec ETS scheme (Canada). Meanwhile, the EU ETS was launched in 2005 and already covers 45% of EU greenhouse gas emissions in some 31 countries.
In addition, Germany, one of the EU's leading carbon emitters, published a regulatory update in August 2018 according to which it will be able to start auctions on its next opt-out platform, the European Energy Exchange (EEX) after it is re-listed in the ETS auctioning regulation. The auctions are expected to resume during the first semester of 2019.