Professor Carlson, Cara Horowitz and Sean Hecht Comment on Lawsuit to Block California's Cap-and-Trade Auction in Bloomberg and Argus Articles

November 15, 2012 -- Professor Ann Carlson commented on a lawsuit filed against California challenging the state's first carbon auction. Her comments appear in a Bloomberg article.

Ann Carlson, an environmental law professor at the University of California, Los Angeles, said yesterday it remains unclear whether the allowance auction constitutes a tax.

“The auction could be viewed as akin the selling off of state property, not the levying of a tax,” Carlson said in an e-mailed statement. “If the auction is not a tax, the lawsuit should be dismissed.”

The court will probably defer to the state air resources board about the design choices it made in developing the cap- and-trade program, including the choice to auction a portion of the allowances, she said.

To read the entire article, click here.

Cara Horowitz, the Andrew Sabin Family Foundation executive director of the Emmett Center on Climate Change and the Environment, also discussed the lawsuit. Her comments appear in an Argus Media article.

“It seems like an implausible reading of the statue to say that the legislature intended to give ARB discretion to create cap-and-trade and design it along lots of different parameters, but meant to constrain it in this very particular way – that they had to choose free allocation,” said Cara Horowitz, the director of the Emmett Center on Climate Change and Environmental law at the University of California Los Angeles.

Sean Hecht, executive director of the Environmental Law Center, is cited on the topic as well.

“By filing the lawsuit the day before the auction, [CalChamber] can create the appearance of uncertainty, and by ensuring that a court does not yet have an opportunity to make a ruling, they can ensure that the uncertainty will still be there when the auction takes place,” Sean Hecht, director of the University of California Los Angeles's Environmental Law Center, wrote on the center's blog. “This would be, to say the least, an unfortunate use of our legal system.”