Justice Dept. Sues California to Stop Climate Initiative From Extending to Canada

WASHINGTON — The Justice Department sued California on Wednesday over the state’s carbon dioxide and greenhouse-gas reduction program, claiming that California officials overstepped their authority by entering into what is essentially an international agreement because one of the participants is in Canada.

In a lawsuit filed in the Eastern District of California, the Justice Department said that the regional system created by California’s air resources board, which caps planet-warming greenhouse gas emissions but lets corporations trade emissions credits within that cap, was unlawful because it included Quebec, Canada. The Justice Department cited the constitutional prohibition on states making their own treaties or agreements with foreign governments.

“The state of California has veered outside of its proper constitutional lane to enter into an international emissions agreement,” Jeffrey Bossert Clark, the head of the Justice Department’s Environment and Natural Resources Division, 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,” Mr. Clark said.

The suit is the Trump administration’s latest salvo in its battle with California over whether the state can set its own environmental policies. If it is successful, the lawsuit will also cut at the heart of California’s ability to curb planet warming emissions at a time when the Trump administration has vowed to withdraw from the Paris Agreement on climate change and is rolling back former President Barack Obama’s efforts to curb fossil-fuel pollution.

President Trump also has targeted California through the Environmental Protection Agency, which threatened to withhold highway funding from the state because of what it said was its inaction on decades-old state Clean Air Act plans. The agency also warned California that the state is failing to meet federal water quality standards in a letter that E.P.A.’s own officials said bypassed the regional experts based in San Francisco and was filled with exaggerations.

Earlier this year the Justice Department opened an antitrust investigation into the deal that California struck with several carmakers to reduce auto emissions, and the Trump administration argued that California should not be allowed to set its own vehicle admissions standards at all. In a recent letter to California Governor Gavin Newsom, the federal government said that the state may have violated clean water laws.

Mr. Clark said that California’s cap-and-trade agreement — a regional carbon trading system called the Western Climate Initiative — “undermines the President’s ability to negotiate competitive agreements with other nations, as the President sees fit.”

The Western Climate Initiative — whose board includes representatives from California, Quebec and Nova Scotia, another Canadian province — is also a defendant in the lawsuit. The state of Oregon recently passed legislation that would allow it to link into the Western Climate Initiative’s cap-and-trade system. A similar cap-and-trade system, the Regional Greenhouse Gas Initiative, covers power-plant emissions in Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont, but does not stray beyond the borders of the United States.

California officials could not immediately be reached for comment.

Robert N. Stavins, a professor of economics at Harvard University, said linking California’s cap-and-trade system to Canada’s enables cost savings for electricity generators in both places.

“If the lawsuit were successful, both policies would remain in place, but the costs to compliance entities and to the broader economies (including consumers) would increase,” he said in an emailed comment. “That outcome would be in no one’s interest!”