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Trump Battle With California Heats Up With New Climate Suit

Jennifer A. Dlouhy

(Bloomberg) -- The Trump administration on Wednesday launched a legal assault on another of California’s plans to combat climate change, filing a lawsuit challenging the state’s carbon-cutting pact with Quebec.

The lawsuit, filed in a Sacramento-based U.S. district court, argues the state stepped outside its proper constitutional lane by making a deal with the Canadian province on a cap-and-trade deal for limiting carbon dioxide emissions.

The move is the latest in a series of actions the Trump administration has taken against California as it simultaneously challenges the state’s authority to set aggressive greenhouse gas emissions-cutting mandates on vehicles and complains the state has been too lax in confronting local pollution problems.

The administration argues that the Constitution bars states from making treaties or compacts with foreign powers -- like the regional cap-and-trade agreement California entered into with Quebec in 2013.

Such foreign policy matters are the purview of the federal government, the Justice Department asserts.

“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 U.S. foreign policy,” Assistant Attorney General Jeffrey Bossert Clark, of the Justice Department’s Environment and Natural Resources Division, said in a news release. “California’s unlawful cap-and-trade agreement with Quebec undermines the President’s ability to negotiate competitive agreements with other nations, as the president sees fit.”

The Western Climate Initiative targeted by the Justice Department caps greenhouse gas emissions but allows power plants, factories and other industrial facilities to buy permits to release them. A similar regional cap-and-trade program is designed to curb emissions in New York, Massachusetts and other Northeast U.S. states but, unlike the California plan, it does not include international partners.

California carbon prices fell on the news, with the December contract dropping 20 cents to $17.08 a metric ton, according to Evan Ard, a managing director at broker Evolution Markets.

California Governor Gavin Newsom blasted the Trump administration’s move, casting it as part of a broad “political vendetta against California, our climate policies and the health of our communities.”

“California’s landmark cap-and-trade program has inspired the creation of dozens of businesses, is a model for similar policies around the world and puts California well ahead of the pack as we prepare for a low-carbon future,” Newsom said in an emailed statement. “This latest attack shows that the White House has its head in the sand when it comes to climate change and serves no purpose other than continued political retribution.”

California Air Resources Board Chairwoman Mary Nichols questioned the administration’s argument, saying the case appeared to have “absolutely no legal basis,” as the underlying agreement “is not a treaty.”

“Many states have arrangements with other states and countries on a whole variety of topics that we work on together,” she said during a climate event at Stanford University.

President Donald Trump and California officials have been sparring for years, though the battles have intensified recently over the state’s efforts to rein in greenhouse gas emissions from automobiles. California has emerged as a leading legal antagonist of the Trump’s efforts to ease environmental regulations, with the state having filed dozens of suits challenging administration policy actions.

The Environmental Protection Agency moved in September to repeal a six-year-old waiver authorizing the state’s zero-emission vehicle mandate and its own limits on tailpipe greenhouse gas emissions. The EPA also rapped California over water pollution and has accused the state of not doing enough to curb smog.

In addition to Newsom, the lawsuit names the California Air Resources Board, the Western Climate Initiative and others as defendants.

The case is U.S. v. California, 19-at-1013, U.S. District Court, Eastern District of California (Sacramento).

(Updates with carbon prices and Mary Nichols comment from 8th paragraph)

--With assistance from Andrew Harris, David R. Baker, Emily Dooley and Christopher Martin.

To contact the reporter on this story: Jennifer A. Dlouhy in Washington at jdlouhy1@bloomberg.net

To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Catherine Traywick, Reg Gale

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