U.S., and Canadian provinces just launched first cap-and-trade auction

California, Quebec and Ontario have launched their first joint effort to auction greenhouse gas emission credits across their borders.

The sale comes just months after these Canadian and US regional governments merged their trading markets for cap and trade, a system designed to limit carbon emissions.

Companies who produce low levels of greenhouse gases earn credits which they can sell to those who produce high emissions and exceed government-mandated limits. “It shows that this is workable. We can expand. We can link carbon markets across borders”, commented Erick Lachapelle, associate professor of political science at the University of Montreal.