New Lawsuit Opposes California's Cap-and-Trade Carbon Market

California’s quest to reduce global warming hit another obstacle on Tuesday. A conservative legal group filed suit to block California’s new cap-and-trade carbon market.

The Pacific Legal Foundation alleged that the market’s charge for carbon emissions violates California law because it constitutes a tax, and taxes in California require approval by a two-third majority in both houses of the state Legislature.

“California’s cap and trade regulation was developed and is being implemented in full accord with all state laws,” Dave Clegern of the California Air Resources Board (abbreviated as both CARB and ARB) said in an email response to the lawsuit. “ARB will continue moving forward with this important program to fight climate change and develop a clean energy future for California.”

The cap-and-trade market is the centerpiece of California’s effort to reduce emissions of gases that cause global warming. It launched Nov. 14.

Cap and trade functions like a stock exchange for greenhouse gas emissions . Businesses, including oil refiners and manufacturers, have to buy permits for each ton of carbon they emit and can then resell these permits.

The California Chamber of Commerce has also sued to block the cap-and-trade program.

Both lawsuits challenge the way the law behind the program is being implemented.

They say ARB had no authority to auction off carbon allowances, raising billions of dollars for the state.

“PLF’s lawsuit holds CARB’s feet to the fire because CARB cannot be allowed to siphon billions of dollars from California taxpayers in violation of the California Constitution,” said Ted Hadzi-Antich, a lawyer for the foundation, in a press release. “CARB must obey the law, just as the rest of us are required to do.”

Based in Sacramento, the Pacific Legal Foundation frequently challenges government regulations. For example, it sought to remove wildlife from endangered species lists.

Pacific Legal Foundation Lawsuit Against California’s Cap and Trade