This report aims to improve understanding of the political and economic factors that have led to the adoption of a linked cap-and-trade system in California and Québec. California has committed to reducing its emissions to 1990 levels by 2020 while Québec has committed to reducing emissions 20% below 1990 levels in the same time period. In their electoral programme the Parti québécois, which has formed a minority government in Québec since the 2012 provincial election, expressed a commitment to a 25% reduction. Though very much the product of state and provincial legislation, the cap-and-trade systems of California and Québec operate under guidelines of the Western Climate Initiative (WCI), a voluntary subnational intergovernmental organization initiated in 2007. There is hope that if the linked cap-and-trade system being established between California and Québec is demonstrated to be effective in allowing these jurisdictions to reduce their aggregate emissions more cost-effectively, other states and provinces will commit to the WCI. Successful implementation of a linked cap-and-trade system in California and Québec could also provide a blueprint for an eventual federal or even continental carbon pricing mechanism.