New York Court Rules To Keep State’s Greenhouse Gas Control Program Alive

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Three small-business owners who had sued New York State over its participation in a regional carbon cap-and-trade program lost their challenge in court last week, after a New York appeals court affirmed that they had waited too long to bring the lawsuit.

The plaintiffs were trying to get New York to stop participating in the Regional Greenhouse Gas Initiative (RGGI), an agreement among several states in the Northeast to put a cap on the amount of carbon that power plants can emit every year. When the year is over, those power plants that did not pollute enough to meet the emissions limit can auction off “allowances,” or simply, the right to pollute a little more. Power companies then buy that right, and then part of the money from the sale is used to invest in energy efficiency, renewable energy, and other clean energy technologies. Over time, the total amount of allowed pollution (the cap) goes down, allowing the market to flexibly adapt. RGGI is the nation’s first mandatory cap-and-trade program for greenhouse gas emissions.

According to Andrew Scurria at Law360, the plaintiffs — residents who pay for electricity in the state — were arguing that RGGI “levied a tax on ratepayers without legislative authorization.” That is because RGGI was entered into by then-Gov. George Pataki and some of the state’s agencies, and did not go through the state legislature for approval. The court, however, ruled that the claims were subject to a four-month statute of limitations — meaning, if they had wanted to sue, they should have done so closer to when the rule was implemented.

Since entering into the program in 2005, the nine states that participate in RGGI have already cut their joint electricity sector emissions by more than 40 percent. A recent study concluded that RGGI added $1.6 billion to the economies of participating states, and also projected that RGGI would provide $1.3 billion in savings on their electric bills over the next decade through the energy efficiency measures funded by the program.

“The courts’ rulings are a significant victory for all of us who recognize the clear and present danger presented by climate change, and the importance of confronting its destructive effects,” New York Attorney General Schneiderman said in a statement. “I will continue to use the full force of my office to vigorously defend RGGI and other sensible efforts that reduce climate change pollution and, thereby, protect the health and welfare of New Yorkers.”

The Center for American Progress recommended a cap-and-trade program as part of a larger plan to to limit the rise in global temperature to approximately 2.0 degrees Celsius above pre-industrial levels by 2050. The Congressional Budget Office projects that an economy-wide cap-and-trade program would reduce the federal budget deficit by about $19 billion over the 2011 to 2020 period, and that auctions of carbon allowances under the bill would raise government revenue by about $751 billion.

The ruling can be read in full here.