The California Chamber of Commerce (CalChamber) filed a lawsuit this week seeking to invalidate California’s “cap and trade” auction, arguing that the California Air Resources Board (CARB) exceeded the authority granted to it under AB 32, which prohibits them from raising money beyond what is needed to cover administrative costs.
The state expects to raise between $500 million and $1 billion through the sale of carbon allowances over the next fiscal year, largely through the sale of permits to cover 2015 emissions. However, many business groups have been pleading with ARB to adjust the regulation as it is seen as an “unconstitutional tax” as opposed to the authorized “fee” meant to run the program. CalChamber’s lawsuit was filed on the day that ARB moved forward and adopted the controversial program.
Cap-and-trade is touted by some as a way to reduce greenhouse gases while providing revenue for environmental justice; it is criticized by others as a costly mandate on businesses that will unnecessarily increase the cost of electricity and make operating in this state more difficult.
Here is an excerpt from the CalChamber press release: “filed in Sacramento Superior Court, [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.” According to the complaint, “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.”
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