Federal Judge Dismisses Trump Administration Lawsuit Over CA-Canada Cap and Trade

The Chevron refinery in Richmond, CA       Photo: Michael Macor, The San Francisco Chronicle

A federal judge on Friday dismissed a challenge brought by the Trump administration against a greenhouse gas cap-and-trade program that creates a market for emissions credits between the state of California and the Canadian province of Quebec. The administration challenged the program because it argued California had no authority to deal directly with the government of another nation — that its program usurps the federal government’s primacy in foreign affairs.  The Judge said the Trump Administration had provided no “concrete evidence that the President’s power to speak and bargain effectively with other countries has actually been diminished.”

Why This Matters:  The California cap and trade emissions program is one of the key components for bringing the state into compliance with its own climate goals — it was created in 2006 by Governor Arnold Schwarzenegger and expanded to allow sales between Californian and Canadian companies in 2014.  There is a question surrounding the equity of cap and trade programs — these programs allow companies to purchase credits to pollute in areas where the emissions can disproportionately hurt minorities.  And the state is taking a look at the effectiveness of the program, which is not selling as many credits as are available because pollution is down thanks to COVID-19.

Another Setback for Trump Administration

The judge, a George H.W. Bush appointee, dismissed the case entirely — he had already thrown out back in March the Trump administration’s claim that the agreement between Canada and California was tantamount to a treaty.  The administration believed that “California’s Governors have defied this clear constitutional structure,” arguing to the court that “They have positioned the State in open opposition to the foreign policy of the United States on greenhouse gas emissions.”  The administration believes the California-Canada emissions trading deal undermines its decision to withdraw from the Paris Climate Agreement.  The Trump Justice Department is now “considering [its] next steps.”

California Looking At Its Options

The Sacramento Bee reported that California’s Secretary of Environment “Jared Blumenfeld has told lawmakers he would work with the Air Resources Board to consider ‘the extent to which the state’s climate strategy should rely on the cap-and-trade program reductions relative to other approaches.’”  According to The Bee, barely one-third of the 57 million carbon credits were sold in the State’s most recent auction due to the drastic reduction in demand for gasoline since the coronavirus pandemic significantly reduced economic activity.  Each credit gives its owner the right to emit a ton of carbon pollution, which they can keep for themselves or sell to other businesses that need to emit greenhouse gasses.

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