Trump administration sues California over cap-and-trade deal with Quebec

Quebec has found itself in the middle of a quickly escalating legal battle waged by the Trump administration against the state of California and its efforts to reduce greenhouse gas emissions.

A U.S. lawsuit filed Wednesday takes aim at California over its 2013 cap-and-trade agreement with the province, saying the state had no right to conduct foreign policy.

"The state of California has veered outside of its proper constitutional lane to enter into an international emissions agreement," Assistant Attorney General Jeffrey Bossert Clark said in a statement.

"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."

The suit was swiftly condemned by California Gov. Gavin Newsom, who said it was part of a continued "political vendetta against California, our climate policies and the health of our communities."

"Carbon pollution knows no borders, and the Trump administration's abysmal record of denying climate change and propping up big polluters makes cross-border collaboration all the more necessary," Newsom said in a statement.

Speaking to reporters at the National Assembly, Quebec Premier François Legault said he would prefer California remain in the pact, but he's prepared to go it alone if necessary.

"We are satisfied with cap-and-trade. If California ever were to leave the agreement, I think we can continue alone but I would prefer California remain in the agreement and even other states [join]," he told reporters in Quebec City.

Legault said the cap-and-trade system has proven effective in reducing greenhouse gas emissions and that he favours the policy over a carbon tax.

Robert Stavins, director of the environmental economics program at Harvard University, said in an email that a successful lawsuit would not affect the separate cap-and-trade programs in Quebec or California, but it would prohibit the connection between the two programs.

The dissolution of the pact would mean higher costs for companies in Quebec and California that are regulated by the cap-and-trade policies, Stavins said, which would "thereby … pass on increased costs to consumers in both jurisdictions."

At least one expert, Derek Walker of the U.S. Environmental Defense Fund, maintained the pact is on "solid legal and constitutional ground."

"California and Quebec are modeling an innovative, legally and environmentally robust program that cuts pollution and delivers economic incentives for cleaner energy, fuels and business practices," he said.

Trudeau monitoring lawsuit

As part of the program, started by former Republican governor Arnold Schwarzenegger, industries commit to purchasing pollution "credits'' or to reduce their consumption of climate-changing oil, gas and coal.

Nova Scotia also employs a cap-and-trade system. Ontario Premier Doug Ford repealed his province's cap-and-trade system, which was linked with Quebec and California, in 2018.

Prime Minister Justin Trudeau imposed a carbon tax last year on provinces without a program to reduce emissions.

Trudeau said Wednesday, at his first news conference since the federal election, that he will look at the lawsuit "very closely."

"Quebec has long demonstrated leadership in the fight against climate change, like B.C., and Canada, and we will make sure that we are continuing to fight climate change across this country in ways that we can," he said.