Judge Puts California Cap & Trade Program on Hold

Francisco superior court judge Ernest H. Goldsmith has put California's law, known as AB 32, to curb greenhouse gas pollution on hold, saying the state did not adequately evaluate alternatives to its cap-and-trade program.  In a 35-page decision, the judge said the Air Resources Board (ARB) had failed to consider public comments on the proposed measures before adopting the plan, which affects a broad swath of the state's economy. In particular, the judge noted, officials gave short shrift to analyzing a carbon fee, or carbon tax, devoting a “scant two paragraphs to this important alternative” to a market-based trading system in their December 2008 plan.

AAEA disagrees with, and opposes, the judges decision.  The Center also opposes carbon taxes or carbon fees.

The Air Resources Board appealling the judge's decision, which was filed late Friday and released Monday.

AAEA supports the ARB appeal.

In the November election, Californians voted down a oil-refinery-sponsored ballot initiative (Proposition 23)  to delay the state's global warming law, which is touted as a spur to California’s fast-growing renewable energy industry. The 2006 law requires the state to cut its greenhouse gas emissions to 1990 levels by 2020.

The California lawsuit against ARB was filed by six environmental groups that represent low-income communities, including the Association of Irritated Residents, based in the San Joaquin Valley, and Communities for A Better Environment, which fights pollution around the ports of Los Angeles and Long Beach. The groups contend that a cap-and-trade program would allow refineries, power plants and other big facilities in poor neighborhoods to avoid cutting emissions of both greenhouse gases and traditional air pollutants.  The environmental justice-oriented groups believe that cap and trade means that oil refineries, which emit enormous amounts of greenhouse gases and contribute to big health problems, cannot simply keep polluting by purchasing pollution credits, or doing out of state projects.  The Center believes the trading system can be leveraged to create innovative energy efficieincy jobs.

The board’s attorneys will meet with plaintiffs about complying with the order without halting all aspects of its global warming plan. Besides the cap-and-trade program, which covers 600 industrial plants, the plan includes rules to curb the carbon intensity of gasoline production and distribution, slash motor-vehicle emissions and control potent greenhouse gases such as refrigerants.

The green groups Environmental Defense Fund, the Nature Conservancy, Natural Resources Defense Council and AAEA backed a cap-and-trade approach, and did not join the lawsuit by environmental justice groups.

If all actions under AB 32 are suspended, that might mean that California's rules requiring utilities to provide 33 percent of their electricity from renewable sources are suspended, or that the state's low-carbon fuel standard is in question.

The rules were drawn up under AB 32, which requires that California's greenhouse gas emissions be cut to 1990 levels by 2020, a drop of about 15 percent from current levels.

The particular issue regards a document called a Functional Equivalent Document (FED) prepared to assess environmental consequences of the Scoping Plan, which sets out cap-and-trade goals. The Superior Court case is Association of Irritated Residents vs. California Air Resources Board, CPF-09-509562.

Conservatives have defeated national cap-and-trade proposals in Congress, but the California legal challenge comes from a different direction - grassroots "environmental justice" groups that consider the plan too weak.

(Silicon Valley Mercury News, 3/21/2011, Reuters, 3/21/2011, L.A. Times, 3/21/2011, San Francisco Chronicle, 3/22/2011)