Yesterday the California Supreme Court denied a petition for review of the cap-and-trade lawsuits brought by a coalition of business interests, headed by the California Chamber of Commerce and Morning Star Packing Company. The Court of Appeal decision issued in April 2017, which upheld the legality of California’s cap-and-trade auctions in the related cases California Chamber of Commerce v. California Air Resources Board and Morning Star Packing Company v. California Air Resources Board, will thus stand.

With the California Supreme Court’s decision on the petition for review, the legal pall overshadowing the cap-and-trade auctions has dissipated, but questions still abound on the future (and legality) of the cap-and-trade program after 2020. Several cap-and-trade bills introduced in the California Legislature this session failed to meet key deadlines to come up for a vote in 2017, though California Governor Jerry Brown is pursuing efforts to reach an agreement among California legislators to amend AB 32 to explicitly extend the cap-and-trade program post 2020 by statute.  Draft amendments to the cap-and-trade regulation, including to continue the program through 2030, are pending at the California Air Resources Board, but the Board intends to first vote on the AB 32 Scoping Plan Update before turning to cap-and-trade amendments.  The Board delayed consideration of the Scoping Plan Update from its June 22, 2017 meeting and has not yet re-calendared this item.  Without a clear statutory mandate for cap-and-trade to remain in effect after 2020, new lawsuits are likely to be filed.