California’s cap-and-trade system, which allows companies to purchase carbon credits through an auction or a secondary market, is not an illegal tax, a state appeals court has found. The system, because of voluntary participation and the purchase of a specific thing of value, preclude a finding that the auction system has the hallmarks of a tax, said Judge Elena J. Duarte
The decision keeps the program safe through 2020, when the program will “still be vulnerable to legal challenges that cite Proposition 26, a 2010 initiative that extended Proposition 13 to apply to fees as well as taxes,” writes Scientific American.
The case, which can still be appealed to the California Supreme Court, began four years ago with a lawsuit filed by the California Chamber of Commerce, according to the Los Angeles Times. Since the program launched in 2012, California has received about $4.4 billion in auction proceeds.
In January, the California Air Resources Board released a plan to cut emissions by 40% by 2030, based on 1990 levels. The plan relies on a cap-trade-program, energy efficiency and vehicle emissions standards to get there.
Cap-and-Trade in Oregon?
Just last month, two prominent Oregon business groups came out against cap-and-trade when the Legislature looked at measures proposed to reduce greenhouse gas emissions in Oregon.
The business groups, Associated Oregon Industries and the Oregon Business Association, said that there are costs associated with cap-and-trade systems that will have impacts on businesses, adding that such measures would result in lost state GDP opportunities, wrote the Portland Business Journal.