CalChamber Sues to halt Cap and Trade Auction

Nov. 13, 2012

Katy Grimes: Hear Ye! Hear Ye! The California Chamber of Commerce filed a lawsuit today to halt and “invalidate” the California Air Resources Board’s cap and trade auction scheduled for tomorrow.

The Chamber is arguing that the California Air Resources Board has exceeded its authority, granted under AB 32, in establishing the revenue raising program. AB 32,  California’s Global Warming Solutions Act, was passed in 2006, and mandates that California reduce its carbon emissions to 1990 levels by 2020.

The state carbon emission levels are already reduced to 1992 levels, according to several environmental experts. But the CARB forges ahead anyway…

The complaint, filed in Sacramento Superior Court today, asserts that AB 32 does not authorize CARB to impose fees other than those needed to cover ordinary administrative costs of implementing a state emissions regulatory program, the Chamber reported on it’s website. “What was not authorized by AB 32 is the Board’s decision to withhold for itself a percentage of the annual statewide greenhouse gas (GHG) emissions allowances and to auction them off to the highest bidders, thus raising from taxpayers up to $70 billion or more of revenue for the state to use,” according to the complaint.

The complaint seeks “to enjoin, and declare invalid, regulations adopted by the California Air Resources Board (alternatively “Board” or “ARB”), purportedly pursuant to Assembly Bill 32, Statutes 2006, chapter 488 (“AB 32”), that permit the Board to allocate to itself greenhouse gas emission allowances that would otherwise be allocable to private and public emitters and sell the allowances through an auction process or reserve sales to the highest bidder for the purpose of raising state revenues.”

In other words, the state is interfering with the free market, and planning on taxing businesses for something they could and should manage between themselves.

“The auction is not a “fee schedule” authorized by AB 32 nor are the auction’s revenues designated for the purpose of regulating GHG emissions,” the complaint says. “Nothing in AB 32, nor its legislative history, confers on the ARB the authority to allocate to itself emission allowances and become an active participant in the cap and trade program for the purpose of generating revenues to the state of up to $7o+ billion over the period 20 13-2020.”

Things will be getting very interesting.