Mexico will launch a pilot cap-and-trade program with voluntary participation from up to 60 power companies, according to media reports.
The year-long test will proceed a national carbon market expected to launch in 2018, Reuters reports.
Independent platform MEXICO2 will oversee the program, which puts a cap on companies’ greenhouse gas emissions. Companies that produce less emissions than their limit can then sell excess allowances to those producing more emissions than they are allotted.
Mexico was among the 195 nations to sign the Paris climate deal in December and pledged to reduce emissions by 22 percent by 2030.
California, which has had a successful cap-and-trade program in place since 2012, is considering legislation that would require the state to reduce carbon emissions 40 percent below 1990 levels by 2030 — the most aggressive climate target in North America.