"Previewing Legal Challenges to Cap-and-Trade"
By Robert Lawrence, Dustin Till and Svend Brandt-Erichsen
The most obvious challenge, and one that ARB prepared for, is that the cap-and-trade regulations violate the commerce clause of the federal Constitution. There are at least two ways to frame this argument. The first is that the program discriminates against out-of-state goods or services. The second is that the regulation impermissibly burdens or inhibits interstate commerce.
Consistency with AB32
There also are likely to be a large number of objections to ARB’s program arising from AB32 itself based on provisions limiting ARB’s authority. Among these requirements, the programs adopted by ARB must be “feasible,” “cost-effective” and “equitable.” These terms provide ample room for argument as to whether the costs imposed by the program are justified by the benefits, and whether the program could have been designed differently.
Consistency with other Federal and State Laws
There is a question of whether California’s regulations conflict with (or complement) federal actions to combat climate change. New and modified power plants and large industrial sources are subject to recently-implemented EPA regulations under the Clean Air Act (CAA). EPA has identified additional regulations that would address GHG emissions under the CAA. These federal regulations apply or would apply in California to some of the same entities that are subject to the cap-and-trade program, raising the potential for inconsistencies. [More at Marten Law, 11.22.2011]