A judge has dismissed two lawsuits challenging the state's cap-and-trade system that limits greenhouse gases from industrial sources by putting a price on carbon.
The arguments put forth by The California Chamber of Commerce and Pacific Legal Foundation were that the system amounted to an illegal tax.
As a tax, cap and trade would require a two-thirds vote in the Legislature to pass.
But the judge said the money collected by cap and trade is akin to regulatory fees, not a tax.
The cap-and-trade program places a limit, or cap, on emissions from individual polluters.
Businesses are required to cut emissions to cap levels or buy pollution allowances to make up for their overages.
The Pacific Legal Foundation said it plans to appeal.