Courts Cap the 'Trade': Regulation of Competitive Markets When Courts Overturn State and Federal Cap-And-Trade Regulation

Abstract

“Cap-and-trade” regulation is the modern 21st century mode du jour of environmental law. It is a key mechanism employed in the U.S. Clean Air Act, integral to the Clean Development Mechanism of the Kyoto Protocol for greenhouse gas emission control, and the regulatory foundation of carbon control legislation in every U.S. states which regulates carbon. This modern “cap-and-trade” mechanism for environmental regulation has been squarely in the telescopic site of litigation by aggrieved parties. The D.C. Circuit Court of Appeals in every one of five 21st century legal challenges has held EPA’s use of “cap-and-trade” to be illegal.

This article examines each “cap and trade” regulation and each legal challenge, sifting through the aftermath in the legal debris around “cap-and-trade” at both the federal and state levels. This leads to conclusions on what is ‘still standing’ legally after several years of ligation against “cap-and-trade” regulation. This metric is extremely important going forward, as “cap and trade” remains the mode of choice for current environmental regulation moving toward a sustainable future. “Cap-and-trade” was the mechanism employed in the mega environmental and energy regulatory mechanism of the Obama Administration Clean Power Plan, until it was indefinitely enjoined by the Supreme Court. This article critically examines each of the successful attacks on state and federal “cap-and-trade” regulation, and how they lead U.S. environmental regulation and executive action into the legal future.