Litigating Global Warming: Likely Legal Challenges to Emerging Greenhouse Gas Cap-and-Trade Programs in the United States

Regulating greenhouse gas emissions through cap-andtrade programs appears inevitable in the United States and conflicts among stakeholders are likely to result in new litigation . The European Union Emission Trading Scheme and U .S . Acid Rain Program can be examined as exemplars to identify the stakeholders of a cap-andtrade program and the types of conflicts that are likely to emerge . Several categories of litigation are likely to develop following the enactment of federal cap-and-trade legislation, including challenges to the program, challenges to competing state and regional programs, actions enforcing the federal program, and related civil litigation among stakeholders . [Authors’ Note: We would like to offer special thanks to Jaclyn Blankenship for her comprehensive research and written product, which provided the foundation for this Article. We are heavily indebted to her for her valuable assistance.] With increasing political discourse over global warming, cap-and-trade programs to regulate greenhouse gases (GHGs) appear inevitable in the United States . In President Barack Obama’s first speech to a joint session of the U .S . Congress, he asked Congress to send him “legislation that places a market-based cap on carbon pollution,” dramatically increasing the chances of passing in 2009 a federal cap-and-trade program . Indeed, despite the onset of a deep economic recession, the Obama Administration has indicated that if Congress does not pass new GHG legislation, it is likely that the president will push to regulate GHG emissions under the Clean Air Act (CAA)1 via the U .S . Environmental Protection Agency’s (EPA’s) rulemaking authority .2 Should Congress choose to legislate on global warming this year, it will not be acting on a blank canvas . There are already a number of regional and state cap-and-trade programs underway . Ten northeast and mid-Atlantic states are participating in the Northeast Regional Greenhouse Gas Initiative (RGGI), which intends to use a cap-and-trade program to reduce the overall level of carbon dioxide (CO2) emissions from power plants in the participating states by 10% by 2018 . The first auction of RGGI emission allowances was held on September 25, 2008 . According to Potomac Economics, which was retained to serve as the market monitor for RGGI, the auction was “robust with 59 separate entities submitting bids to purchase more than four times the available supply of allowances in the auction .”3 In the West, seven states, including California, and four Canadian provinces have been working since February 2007, to develop a regional cap-and-trade program, known as the Western Climate Initiative (WCI), to reduce emissions from six GHGs . Three of the WCI members (California, Quebec, and Washington) have adopted regulatory threshold guidelines . And with passage of AB 32: The Global Warming Solution Act of 2006 (AB 32),4 California became the first state to mandate reductions in GHG emissions . AB 32 requires California to reduce GHG emissions to 1990 levels by 2020—a reduction of about 30% . In response to AB 32, California is