California Governor Jerry Brown has signed a formal agreement between his state and the Canadian provinces of Ontario and Quebec, linking the three regions’ carbon-emission markets. The deal, going into effect on January 1, creates the largest carbon market in North America: Ontario and Quebec are Canada’s largest provinces, with Ontario being the country’s most populous, and California itself represents the world’s sixth largest economy.

"Whatever anyone else does and whatever Mr. Trump does in Washington, China is on the move with a carbon market," Governor Brown states.

"There’s a lot of money on the other side and that’s the status quo. We’re the insurgent forces transforming. That’s where it’s at. In our systems, the sub-national jurisdictions have a power." Despite the federal government’s current efforts to staunch the progression of green energy development in the U.S., endeavors by governments at both state and municipal levels have pledged to forge ahead with their own plans.

This new cap-and-trade deal allocates carbon emission limits to businesses, allowing companies that pollute less to sell their surplus allotment to companies that are falling behind in their efforts to lower their carbon output. Cap-and-trade systems like this were devised with the idea that companies would choose profitability over pollution, with the market encouraging the shift toward lowering emissions.

Brown foresees this deal as a precursor to even more ambitious deals to combat climate change that will be made around the globe in the near future. "This is the next step in a long and difficult journey to de-carbonize the economies of the world. We’re de-carbonizing our own economies but then setting in motion the example that will be picked up by other provinces, other states, and other regions around the world." 

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