Judge Ends White House War on California Cap-and-Trade Deal With Quebec

A truck drives into the Valero Benicia Refinery in Benicia, Calif. (AP Photo/Rich Pedroncelli)

(CN) — A federal court judge nixed the Trump administration’s remaining claims against California’s cap-and-trade policy’s link to a program in Quebec, Canada, in a Friday ruling.  

U.S. District Court Judge William Shubb granted summary judgment to California, finding the Trump administration failed to provide sufficient evidence that California’s carbon credit trading system — a tool the state says it needs to combat climate change — undermines the federal government’s ability to conduct foreign policy.  

“The United States has failed to identify a clear and express foreign policy that directly conflicts with California’s cap-and-trade program,” Shubb wrote in 30-page ruling.  

The ruling marks another legal victory for California over the Trump administration as the two have squared off dozens of times in the courts. The losses continue to mount for the Trump administration and the legal victories are scant.  

Regarding cap-and-trade, the Trump administration argued California’s agreement with Quebec to link their cap-and-trade systems undermined several elements of federal policy, including President Donald Trump’s decision to withdraw the United States from the Paris Climate Accord.  

Specifically, the federal government argued California could end up assisting Canada to meet its climate mitigation goals as set forth by the agreement in contravention of the Trump administration’s policy toward climate change.  

“California’s cap-and-trade program cannot facilitate Canada’s participation in the Paris Accord in the way the United States alleges,” Shubb wrote.  

The Trump administration further argued California’s deal with Quebec compromised Trump’s ability to “engage in international deal-making on behalf of the United States.” 

But Shubb said the agreement does not impinge on Trump’s ability to negotiate on behalf of the United States and that California is making a deal with another province, not the entire nation of Canada.  

“California’s cap-and-trade agreement as applied concerns agreements between sub-national actors, rather than a statewide prohibition on trade with an entire nation,” the judge wrote.  

The Trump administration also argued California’s agreement with the Canadian province violated two laws dating back several decades, but Shubb said one law was a mere collection of platitudes devoid of action items and the other did not directly conflict with California’s program.  

“The 1992 Convention does not pre-empt the challenged agreements and regulations because they are entirely consistent with its objectives,” Shubb wrote.  

In other words, California’s carbon credit system doesn’t conflict with the federal law in question, because that law espouses and promotes the very objections that California is attempting to achieve — cost-effective stabilization of greenhouse gases.  

The Department of Justice did not respond to emails seeking comment on Friday’s ruling.  

California, Quebec and Ontario agreed to share their cap-and-trade systems in 2013. Cap-and-trade policies allow certain companies to buy carbon allowances, meaning they pay to emit a certain amount of carbon each year. 

If they exceed their threshold, the only way for them to continue operations is to buy carbon credits from another company that is confident it will remain under the threshold. Proponents of the system say that it allows regulators to predict a certain amount of pollution and to adjust regulatory schemes and cleanup efforts accordingly.  

Proponents also say the money generated from buying carbon credits can be used toward other climate change mitigation strategies. For instance, California’s high-speed rail project, which proponents say will cut down on car and airplane traffic in the state once completed, is funded in part by proceeds from the cap-and-trade program.  

Critics of cap-and-trade policies say allowing even a minimal amount of pollution is unacceptable and the proceeds and projects that result from carbon purchasing are insufficient to offset more greenhouse gas emissions.  

Republican Governor Arnold Schwarzenegger signed California’s original cap-and-trade bill in 2006 and his Democratic successor Governor Jerry Brown renewed it in 2017. California has generated over $12.5 billion from the sale of carbon permits at quarterly auctions.

The program is set to expire in 2030. 

In the eyes of California’s current officials, the deal with Quebec is not a cunning attempt to usurp the president’s treaty-making abilities but simply a way for the states to further their similar climate objectives. Current Governor Gavin Newsom has previously called the lawsuit “political retribution” and proof of Trump’s “political vendetta against California.” 

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