This memo compares projected allowance market outcomes for Washington’s Cap-and-Invest program operating as a standalone market against outcomes under linkage with California and Québec. Results are produced with Greenline Insights’ Allowance Market Simulator using Washington program parameters certified against the proposed CR-102 rule and HB 1975. The comparison covers 2027 through 2045, the anticipated period of linked operation.

Under a central case, linkage lowers Washington allowance prices substantially. Operating alone, Washington’s market clears at its reserve trigger and/or price ceiling through 2037, drawing on roughly 37 million reserve and price ceiling units over the study period. Under linkage, the market uses no cost-containment instruments in any year.

Because prices are lower under linkage, in-state abatement from the program is lower, resulting in modestly higher emissions than a standalone program. In the pooled market, this is offset by additional abatement in lower-cost jurisdictions, such that a linked program with California results in lower pooled emissions than standalone Washington and California programs.