California cap-and-trade spending frenzy

As the holidays approach, California is siphoning billions of dollars in auction revenue proceeds generated under CARB’s cap-and-trade program governing greenhouse gas emissions for purposes that are unrelated to greenhouse gas emissions.  Fast speed rail, disadvantaged communities (identified by zip codes), natural … Continue reading

Update on PLF’s challenge to California’s cap-and-trade regulation

The briefing in our lawsuit challenging the auction component of CARB’s cap-and-trade regulation has been completed for many months, but the California Court of Appeal, Third District, has yet to set a date for oral argument.  Although the panel was … Continue reading

Climate Emperor Brown of California and the defeat of SB 32

Last week, the California Legislature resoundingly rejected Governor’s Brown’s efforts to cut carbon dioxide emissions beyond the levels required by AB 32, which requires California to reduce emissions in the state to 1990 levels by 2020.  The proposed new law, … Continue reading

Constitutional outrages and power outages

Those are EPA’s gifts to the nation under the so-called Clean Power Plan.  On August 3rd, EPA unveiled the Plan as a set of Clean Air Act regulations.  Among other things, the Clean Power Plan dictates the mix of fuels that may be used to generate electricity throughout the nation, heavily favoring solar and wind over coal and natural gas, thereby furthering EPA’s goal of saving the planet from carbon dioxide.  The power grid will come under enormous pressure if and when the Clean Power Plan is implemented.  Power outages and substantial increases in electricity costs are virtually guaranteed.  Moreover, the Clean Power Plan is unconstitutional.

For decades, there has been a “bright line” divide between federal authority over wholesale sales of electricity in interstate commerce and state authority over planning, siting, and providing generation resources to local customers.  According to the Supreme Court, the 10th Amendment of the United States Constitution prohibits the federal government from disrupting that traditional constitutional balance between state and federal authority unless it is “abundantly clear” that a federal statute “compels” the intrusion into state sovereignty.  Here, just the reverse is true,  It is “abundantly clear” that the Clean Air Act does not give EPA the authority to dictate to the states the specific way in which electricity must be generated within their borders.  Federalism is a central component of our constitutional system of government, and the Clean Power Plan ignores it.  Look for legal challenges from states (and others) against this federal attack on the 10th Amendment.

My congressional testimony this week: EPA’s Science Advisory Board

On Wednesday, May 20, 2015, I testified before a senate subcommittee seeking to make EPA’s Science Advisory Board more transparent, effective, and fair.  The senate bill at issue, S. 543, is being proffered in response to criticism that EPA is not using the Board properly to provide peer review of the scientific bases of its regulatory proposals.  My testimony criticized EPA’s failure to send proposed regulations governing carbon dioxide emissions to the Board for expert analysis before finalizing the rules.  IMG_0208_kpCarbon dioxide is a  natural substance that is everywhere and in everything.  By regulating that ubiquitous substance, EPA gives itself the potential authority to regulate virtually everything, everywhere.  That is an unprecedented reach for power by a federal administrative agency.  Accordingly, if anything merits peer review from the top scientific experts, it is the scientific analysis forming the foundation of EPA’s carbon dioxide regulatory proposals.  For more details, see my written and oral (time stamp 41) testimony.

It’s cap and trade time again

On Friday, May 1, 2015, we filed our final brief in California’s appellate court in connection with our challenge to CARB’s scheme to sell carbon dioxide emissions allowances at auction to the highest bidders.  CARB intends to generate billions of dollars of revenue for the state from the auctions and use the funds for a variety of purposes that have little if anything to do with reducing carbon dioxide emissions.  Those unrelated purposes include diversion of funds to California’s general fund, high speed rail, and projects to benefit disadvantaged communities.

The California Constitution requires that such uses of the revenues be authorized by at least a two-thirds supermajority vote of both houses of the legislature.  CARB purported to create the auction under a 2006 statute known as A.B. 32, which was not enacted by a supermajority legislative vote.  Accordingly, the auction revenues are unconstitutional taxes.  Moreover, nothing in A.B. 32 actually authorizes CARB to sell emissions allowances at auction for billions of dollars.

CARB argues that the auction revenues are not illegal taxes because those who purchase emissions allowances at auction do so voluntarily.  But that ignores the realities facing California businesses that must comply with the cap and trade regulation, such as PLF’s client Morning Star Packing Company.  Morning Star makes tomato paste from tomatoes received from farms by heating the tomatoes in boilers fueled by natural gas, which causes carbon dioxide emissions in excess of CARB’s regulatory threshold.  As a result, Morning Star’s tomato processing facilities are required to obtain a sufficient number of emissions allowances in order to continue operating in California.  Because Morning Star does not receive all its required emissions allowances free of charge from CARB, it is forced to obtain them through other means, including purchasing them from CARB at the auctions.  Under the cap and trade regulation, this is a necessary cost of staying in business in California.

To characterize such payments as “voluntary” stretches the meaning of the term beyond recognition.  One could just as well argue that the payment of California income tax is “voluntary” because a California resident could choose to move out of the state and no longer be subject to the tax.  But, for those who choose to remain in California, the state income tax does not somehow become “voluntary” and not a tax.  Merely because a company like Morning Star chooses to continue to do business in the state by purchasing emissions allowances at auction does not make the auction payments any more “voluntary” or any less of a tax.

A PLF video provides additional insight into the case, and more information can be found at PLF’s website.

California gasoline rationing begins January 1

You read that correctly. Today, California motorists have the right to buy as much gasoline as they want, and fuel companies have the right to sell as much as they can supply, at prices agreeable to both. But in the New … Continue reading

Partial victory in Supreme Court greenhouse gas decision

Today the United States Supreme Court decided a very important case with implications for the nation’s economy and for the rule of law. In Utility Air Regulatory Group v. EPA, the Court held that EPA violated the Clean Air Act … Continue reading

CARB adopts amendments to AB 32’s scoping plan

It was only a matter of time. On the heels of the Cap-and Trade Regulation, on May 22, 2014, the California Air Resources Board adopted a regulatory plan that is so severe and so inimical to the interests of the state that it almost … Continue reading