US sues California for Quebec cap-and-trade deal

US president Donald Trump's administration is suing California for participating in a carbon cap-and-trade agreement with Quebec, contending the program violates a constitutional prohibition against states engaging in compacts with foreign powers.

In its latest attempt to rein in California's efforts to address climate change ahead of Washington, the administration today filed a civil complaint against California, the California Air Resources Board and the Western Climate Initiative in a federal court in the eastern district of California. The lawsuit argues that the cap-and-trade program represents an attempt to pursue an independent foreign policy in greenhouse gas (GHG) regulation.

"The state of California has veered outside of its proper constitutional lane to enter into an international emissions agreement," US assistant attorney general Jeffrey Bossert Clark said. "The power to enter into such agreements is reserved to the federal government, which must be able to speak with one voice in the area of US foreign policy."

Clark, who heads the Justice Department's Environment and Natural Resources Division, argued the cap-and-trade agreement with Quebec "undermines the president's ability to negotiate competitive agreements with other nations, as the president sees fit."

California's cap-and-trade program has been linked to Quebec since 2013.

The move follows Trump's attempt to end California's ability to limit greenhouse gas emissions from cars and trucks, moving closer to eliminating rules that would otherwise curb fuel demand by 500,000 b/d by 2030.

Trump has moved to rescind a waiver allowing California and 13 states that follow its lead to enforce their own vehicle emissions standards. This could block states that last year used 2.9mn b/d of gasoline, or 30pc of US demand, from enforcing targets requiring automakers to raise the fuel economy of new cars and trucks to an average 46.7 miles/USG by 2025.

In July, California signed a deal with automakers Ford, BMW, Honda and Volkswagen to maintain existing auto rules, even if Trump pursues weaker fuel economy targets.

This infuriated Trump, who called the companies' executives "foolish." The Justice Department launched an antitrust probe into the automakers, in what critics say was "politically motivated retaliation."

source: Argus Media