Court Upholds California’s Landmark Cap-and-Trade Program

(Sacramento, CA – November 14, 2013) Today the Sacramento Superior Court upheld California’s ambitious cap-and-trade program against a challenge to its carbon auctions, a key feature of the landmark program.

Cap-and-trade allows California to reduce carbon pollution at the lowest possible cost while auctioning carbon permits holds polluters accountable for their impact on the climate.

“Today’s decision marks another win for the Golden State’s clean energy economy and the communities across California hit hardest by climate pollution. 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.

The court stated: “The court does not find Petitioners’ arguments persuasive. Although AB 32 does not explicitly authorize the sale of allowances, it specifically delegates to [the Air Resources Board] the discretion to adopt a cap-and-trade program and to “design” a system of distribution of emissions allowances.”

“The court affirmed today what the overwhelming majority of Californians want – to move forward with clean energy solutions that help reduce pollution and create opportunities for clean energy innovation,” added Alex Jackson, an attorney with the Natural Resources Defense Council. “The decision clears the way for California to continue pursuing the critical goals of the Global Warming Solutions Act.”

Last year, in an apparent attempt to disrupt and inject uncertainty into the carbon market, the California Chamber of Commerce filed their lawsuit a day before California’s first ever carbon auction. The timing was notable given the lack of any challenge in the almost 11 months since the regulation went into effect.

To date, the first four auctions have raised $395 million for the state. A fifth auction will be held Nov 19th.

California has committed to using the proceeds from the cap-and-trade auction for investments that reduce climate pollution while also benefiting the state’s overall health and economy.