Appeals court upholds California’s cap-and-trade system

A state appeals court handed a major victory to California’s signature climate-change program on Thursday in a lawsuit challenging the state’s ability to collect revenue from auctions its sponsored over the last five years.

The 3rd District Court of Appeal upheld the California Air Resources Board’s program in a 2-1 decision, ruling that its auction sales do not equate to an illegal tax because the purchase of pollution credits by businesses is voluntary and the credits they buy are “a thing of value.” The program was approved with a majority vote, and opponents believe a two-thirds vote was required to authorize a tax.

“These twin aspects of the auction system, voluntary participation and purchase of a specific thing of value, preclude a finding that the auction system has the hallmarks of a tax,” Justice Elena J. Duarte wrote for the majority.

Click here to read the article on The Sac Bee.