California's much heralded effort to reduce greenhouse gas emissions to 1990 levels by 2020 suffered a blow when U.S. District Court Judge ruled it unconstitutional and issued a preliminary injunction sought by ethanol producers. The California Air Resources Board issued the rule in 2009 rewarding marketable credits to fuel producers and distributors that emit less greenhouse gases. Those who exceed emission limits must buy the credits in order to be in the state market, raising their costs.
Judge Lawrence J. O'Neill of the district court in Fresno stated in three separate rulings that the rule discriminates against out-of-state fuel producers and tries to regulate actions-including farming methods and use of coal-fired electricity-that lie outside California's boundaries.
Ethanol producers, truckers and refiners sued separately against the regulation, claiming it would make Californians pay the highest fuel prices in the country.
The air resources board said it would appeal O'Neill's decision, arguing that while the Constitution gives Congress the power to control interstate commerce, California's Clean Air Act grants the state special power to regulate pollution and protects it from claims of interference in interstate commerce.
