A battle is brewing between Minnesota and North Dakota over a carbon tax on coal-fired energy that has long-term consequences for both the U.S. Constitution and energy regulation.

The Minnesota Public Utilities Commission has proposed adding a significant carbon dioxide tax (between $3 and $34 per ton) on all electricity used in the state starting in 2012, whether or not it was produced there. This would make North Dakota produced-electricity, nearly all of which is coal-fired, prohibitively expensive in Minnesota and thus discourage its use.

The North Dakota Attorney General is already preparing to sue Minnesota over this tax, as there are a number of dangerous precedents set here if this is allowed to stand. First, Minnesota is attempting to place a regulatory burden on North Dakota energy producers, operating far outside their normal jurisdiction. Second, and more importantly, the U.S. Constitution places specific limitations on the states’ ability to impose intrastate trade restrictions.

Article I, Section 8 of the Constitution states, in part, that the Congress shall have power “… to regulate commerce with foreign nations, and among the several states ….” Further, Article I, Section 10 states, in part, “No state shall, without the consent of the Congress, lay any imposts or duties on imports or exports, except what may be absolutely necessary for executing it's inspection laws: and the net produce of all duties and imposts, laid by any state on imports or exports, shall be for the use of the treasury of the United States; and all such laws shall be subject to the revision and control of the Congress.”

In other words, the federal government regulates commerce between the states, forbids state levied trade tariffs except under very specific circumstances, and collects any duties allowed under those exceptions. That makes the Minnesota proposal deficient on all three counts.

As the Obama Administration’s attempt to regulate carbon emissions at the federal level continues to falter, we can expect more of this from the states and localities. These cynical attempts to push more power and more tax revenues into the hands of state government, especially given the current rotten condition of most state budgets, are inevitable but will not be successful, as long as Constitutional rights and protections are enforced.

Carl Oberg is a Policy Associate at Americans for Prosperity.