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California’s First Carbon Auction Challenged in Lawsuit

California was sued by the state’s Chamber of Commerce, which seeks to bar the auction of carbon allowances, a key element of the state’s cap-and-trade program aimed at reducing greenhouse gas pollution.

The business group said in a complaint filed yesterday in state court in Sacramento that the California Air Resources Board lacks authority to auction carbon allowances, which it alleges is a paramount to an invalid tax or unconstitutional fee that would cost taxpayers $70 billion. The complaint couldn’t be immediately confirmed in electronic court records. California officials said today’s auction will proceed.