Business owners sue over emissions deal

A lawsuit filed on behalf of three upstate business owners has challenged New York's participation in a regional agreement to limit power-plant emissions, calling the program an unconstitutional "tax" not approved by state lawmakers.

The suit was funded by the Competitive Enterprise Institute and Americans for Prosperity, groups that advocate for limited regulation and have opposed climate-change legislation. It was filed Monday in state supreme court in Albany.

The Regional Greenhouse Gas Initiative requires utilities in 10 member states to buy allowances for every ton of carbon dioxide they produce. Intended to help combat climate change, the program was the first such agreement in the United States. It also requires states to reduce power-plant emissions over time. Former Gov. George Pataki initiated the program in the early 2000s; the first carbon-credit auction was in 2008.

The suit alleges that Pataki imposed a tax -- in the form of higher energy prices for consumers -- when he greenlighted New York's role in late 2005 without seeking subsequent approval from the legislature.

"The Governor, on his own initiative . . . simply cannot raise taxes," said Mark Smith, an attorney for the plaintiffs.

A previous lawsuit over the carbon-trading program by owners of an upstate power plant was settled in 2009.

Governor Andrew M. Cuomo's office did not respond to requests for comment. A spokesman for the state Department of Environmental Conservation declined to comment.

Supporters said New York's constitution gives DEC broad powers to limit air pollution. "We think it's a groundless lawsuit," said Ross Gould of Environmental Advocates of New York.

Columbia Law School professor Michael Gerrard said the New York action was an example of "concerted litigation" taking place nationwide against such regional greenhouse gas agreements. The suit comes as New Jersey Gov. Chris Christie has announced his intention to withdraw from the agreement.