Washington (Platts)--12Jan2012/612 pm EST/2312 GMT

California and Quebec plan on hosting a joint auction to sell carbon dioxide allowances as part of a coordinated greenhouse gas cap-and-trade program set to go into effect in 2013.

"We're looking at one common auction," Robert Noel de Tilly, a climate change adviser for the government of Quebec and co-chairman of the Western Climate Initiative, said during a briefing Thursday in San Francisco. "There will be one bundle of allowances that are fully fungible."

It was not previously clear whether each jurisdiction would hold separate auctions or collaborate.

WCI Inc., the administrative arm of the Western Climate Initiative, is conducting a search for a company that would oversee the auction.

The WCI, formed in 2007, consisted of seven US states and four Canadian provinces until November, when Arizona, Montana, New Mexico, Oregon, Utah and Washington exited the GHG reduction organization, leaving British Columbia, California, Manitoba, Ontario and Quebec as the sole members.

The first quarterly auction is scheduled to take place August 15.

Quebec plans on linking its cap-and-trade program with California before the August 15 deadline, Noel de Tilly said.

Auctions are the primary method by which CO2 allowances will be distributed in California and Quebec.

Compliance entities falling under the cap are required to hold enough allowances to cover their respective GHG emissions.

Quebec adopted its cap-and-trade regulations in December. Other Canadian provinces, including British Columbia and Ontario, are expected to join as well.

--Geoffrey Craig, geoffrey_craig@platts.com