Federal Court Upholds California’s Right to Work with Quebec on Climate Change

July 20, 2020 by Jacob Pederson

A federal court has ruled that California’s coordination with the Canadian province of Quebec to reduce greenhouse gas emission does not violate the U.S. Constitution, shooting down the last surviving element of a challenge by the Trump administration.

In 2006, California’s Gov. Arnold Schwarzenegger signed a market-based cap-and-trade program to reduce greenhouse gases, which went into effect in 2012. It was extended for another decade in 2017.

The law set limits, which decrease over time, on California companies’ emissions of carbon dioxide and other greenhouse gases. 

Companies that do not meet their emissions “cap” must “trade” by buying credits at an auction, with the proceeds used to fund emissions-control programs and help vulnerable communities.

In 2011, Quebec established its own cap-and-trade program, with stricter limits. Under the agreement approved in 2013 by then-Gov. Jerry Brown, California and the Canadian province have conducted joint auctions for pollution credits, yielding $12 billion to date in revenue for California.

The Obama administration did not object to the agreement, but the Trump administration sued, saying the first-of-its-kind agreement amounted to a treaty or international compact in violation of the federal government’s exclusive constitutional authority.

Fourteen states ultimately joined the litigation on California’s side.

In March, U.S. District Judge William Shubb held that the agreement did not expand California’s regulatory power, and that the state was free to pull out from or modify its terms at any time.

However, Shubb deferred consideration of the administration’s claim the agreement violated the Foreign Affairs Doctrine until last week. The Doctrine vests Congress and the president with the power to conduct particular foreign affairs activities.

According to the administration, California’s agreement with Quebec, “directly conflicts with President Trump’s withdrawal from the Paris Accord.” Further, it claims the contested agreements “undermine the federal government’s ability to develop a new international mitigation arrangement.”

On Friday, Shubb rejected those assertions, saying the administration hadn’t come close to making its case.

“The United States offers no concrete evidence that California’s cap-and-trade program has interfered with either negotiations for a better deal or the nation’s imminent withdrawal from the Paris Accord,” Shubb wrote.

In response to the ruling Erica Morehouse, a senior attorney at the Environmental Defense Fund, said, “California faces the clear and present danger of climate change and is innovating and leading with solutions that protect lives, create jobs and strengthen the economy.

“We need states to take on this role as laboratories of experimentation today more than ever, especially when the federal government fails to provide sound leadership,” Morehouse said.

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