The auction will continue despite the last-minute suit. (Creative Commons)

On Tuesday, the California Chamber of Commerce filed a lawsuit against the California Air Resources Board and accused them of overstepping their legal boundaries by using the auction to round up revenue for the state.

They argue that under California’s climate change law AB 32, the board can only raise money for administrative costs.

Despite the last-minute suit, the board expects tomorrow's auction to continue as usual.

Under cap-and-trade regulations, greenhouse gas producers would buy permits for every ton of carbon dioxide they produce over a certain “cap.” Businesses that produce fewer emissions can then sell their remaining permits to businesses that exceed the cap. Proponents say such policies incentivize businesses to lower emissions while letting them decide how they reduce emissions. 

The lawsuit highlights the frustration many businesses feel regarding the program, which they characterize as a $1 billion burden on their balance sheets. Previously, the business coalition AB 32 Implementation Group tried unsuccessfully to petition Gov. Jerry Brown to cancel the auction. 

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