California's year-old cap-and-trade system lives on.
A Superior Court judge has dismissed two lawsuits that challenged cap-and-trade — the state's sale of "allowances," or permits that allow companies to emit carbon dioxide and other greenhouse gases. The decision was dated Tuesday but made public Thursday.
The ruling means that California maintains its authority to limit greenhouse gases from power plants, factories and other businesses.
The California Chamber of Commerce and the Pacific Legal Foundation filed the lawsuits, arguing that California’s global warming law, AB32, didn’t give state officials the authority to sell the allowances. They also said the allowances were an illegal new tax, since the state legislature approved AB32 by a simple majority vote. (Under California law, new taxes require the approval of two thirds of state legislators.)
But in his written opinion, Judge Timothy Frawley of the Superior Court of California rejected both arguments. As the San Francisco Chronicle noted, "The California Air Resources Board, which organized the cap and trade system, was well within its rights to sell the allowances, he wrote in his decision. And while he agreed that the allowances had similarities to a tax, he decided they were more comparable to regulatory fees, which don’t require a supermajority vote."
Environmentalists praised the ruling.
"The court sent a strong signal today, thoroughly affirming California's innovative climate protection program — including the vital safeguards to ensure that polluters are held accountable for their harmful emissions," said Erica Morehouse, an attorney with the Environmental Defense Fund, in a statement.
Sacramento County Superior Court Judge Timothy Frawley rejected arguments by the California Chamber of Commerce and Pacific Legal Foundation that the system amounted to an illegal tax. As a tax, cap and trade would require a two-thirds vote in the Legislature.