California business group files suit against state 'cap-and-trade' scheme

The California Chamber of Commerce has filed a lawsuit seeking to invalidate California's "cap-and-trade" auction, arguing that the California Air Resources Board (CARB) exceeded the authority granted to it under state law (AB 32) in establishing the revenue-raising program.

The complaint 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.

"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," the complaint stated.

The lawsuit does not challenge any of the provisions of AB 32 nor the merits of climate change science. The only issue addressed in the litigation is the portion of CARB's regulatory program that seeks to permit the Board to allocate to itself GHG emissions allowances and to profit by selling them to GHG emitters.

The California business community believes the auction will raise energy costs in the state, harm the economy and impact California's competitiveness without providing any additional environmental benefits.

"AB 32 gives California the opportunity to be the leader in reducing carbon emissions," said Allan Zaremberg, CEO of the California Chamber of Commerce. "Unless we adopt the most cost-effective way of reducing carbon emissions, other states will not follow us. The current CARB proposal is the most costly way to implement AB 32, and it will hurt consumers, the job climate and the ability of businesses to expand here."

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