A recent ruling from the California Superior Court for San Francisco County has stalled – at least temporarily – the California Air Resources Board’s (CARB) implementation of the state’s landmark AB 32 legislation, which requires CARB to take measures to reduce California’s greenhouse gas (GHG) emissions to 1990 levels by 2020. Assn. of Irritated Residents, et al. v. CARB, Case No. CPF 09-509562 (Jan. 21, 2011).
AB 32 directs CARB to use “maximum technologically feasible and cost-effective reductions” to achieve this reduction goal, but left the agency with considerable discretion in the development of substantive measures in the associated Scoping Plan under challenge in this case. The linchpin of the Scoping Plan is a cap-and-trade proposal that would cover 85% of statewide GHG emissions.
The court sided with the petitioners in finding that the Scoping Plan failed to adequately consider alternatives to cap-and-trade, such as direct regulation of GHG emitters (sometimes called “command-and-control”) or a carbon fee. The court also ruled that CARB acted unlawfully by approving the Scoping Plan before the environmental review process required by the California Environmental Quality Act (CEQA) was completed. By contrast, the court ruled in favor of CARB that the text of AB 32 did not express a preference for the type of regulation to achieve AB 32’s goals and, therefore, CARB lawfully exercised its quasi-legislative powers.
As a result of the ruling, implementation of the Scoping Plan has been stayed indefinitely. The parties have 15 days from the January 21 ruling to file objections before it becomes official. CARB may supplement its analysis with further study or appeal the ruling. Either option will take time, jeopardizing the January 1, 2012 start date for the cap-and-trade program. CARB’s cap-and-trade proposal has been closely watched by environmentalists and industry since the U.S. Congress has not enacted a comprehensive climate change statute.
Stay tuned.
Mark Erman, Esq.
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