Regulating leakage presents potential legal challenges: in our federal governmental structure, states are limited by the Constitution in the extent to which they can regulate activities occurring beyond their own borders, and may be preempted by federal statutes from regulating certain interstate activities altogether. This paper analyzes the legal hurdles that RGGI may face should it choose to address emissions leakage through regulating imported electricity. It focuses on two legal issues in particular, which are generally thought to be the most likely arguments raised against imports regulations: (1) whether imports regulations violate the dormant Commerce Clause (DCC) of the Constitution; and (2) whether such regulations are preempted by the Federal Power Act (FPA).
Environmental Law | Law
Erin Parlar, Michael Babakitis & Shelley Welton,
Legal Issues in Regulating Imports in State and Regional Cap and Trade Programs,
Sabin Center for Climate Change Law, Columbia Law School, October 2012
Available at: https://scholarship.law.columbia.edu/sabin_climate_change/155