California Supreme Court Won't Hear Cap-And-Trade Challenge

California businesses must continue to pay the state for their greenhouse gas emissions, under its cap-and-trade program. The state Supreme Court Wednesday declined to take up a challenge from business groups. That solidifies cap-and-trade, but only in the short-term.

Even as Governor Jerry Brown has touted cap-and-trade as an example for other countries like China to fight climate change, business groups have argued it was created illegally—that because it requires companies to buy state credits for their emissions, it’s effectively a tax, but that lawmakers didn’t pass it with the two-thirds majority votes taxes require. An appeals court rejected this argument in April, and it’s that ruling that will now stand.

So, cap-and-trade will continue for now, but it’s still set to expire in 2020. The governor is trying to negotiate a deal with lawmakers to extend the program. He’s been wanting a two-thirds vote, and didn’t immediately veer from that stance, even with the court’s decision.

“With this Supreme Court victory, now it’s up to us to take action extending California’s cap-and-trade system on a more permanent basis,” Brown said.