By Chris Megerian, The Los Angeles Times.

Lawyers for the state and businesses clashed in a Sacramento appeals court Tuesday over how much power California has to regulate greenhouse gas emissions and whether that authority includes raising revenue for lawmakers to spend.

The case could determine the future of the state’s cap-and-trade program, which requires companies to buy permits to release greenhouse gases into the atmosphere. The program is the centerpiece of California’s climate agenda and has been extolled as an international model in the fight against global warming, but opponents argue that it constitutes an unconstitutional tax.

A decision, which is expected from the state appeals court judges within three months, has been hotly anticipated by businesses and advocates whose next steps hinge on which way the court rules. Spectators and journalists began lining up outside the courthouse before it opened on Tuesday morning, and there weren’t enough seats in the courtroom for everyone to watch the proceedings.

National environmental organizations have vociferously defended the cap-and-trade program, one of the few such initiatives anywhere in the world. The groups are particularly concerned about any stumbling block in California with President Trump promising to roll back environmental regulations in Washington.

“With the federal government seemingly stepping back from climate leadership, California’s example is even more important,” said Erica Morehouse, a lawyer for the Environmental Defense Fund.