EcoZone Blog: Climate Change Outline: Emissions Trading Sub-National Challenges

A. Potential Challenges to Sub-National Regulation

In response to the recent flurry of activity at the US regional, state, and local levels on climate change, questions have surfaced regarding whether these initiatives are compatible with the US Constitution and its system of federalism. Though the states have broad authority to regulate public health and welfare, the Constitution places limitations on their authority to regulate in certain areas where federal authority is pre-eminent. Emerging carbon trading regimes at the regional and state level are already being challenged by affected interests. For example, early in the RGGI development process, Edison Electric Institute (a trade association for the utility sector) raised many of the constitutional issues discussed below in comments it submitted regarding the RGGI MOU.¹ More recently, a power company sued to overturn the State of New York's administrative regulations implementing RGGI, raising several