Can California Cap and Trade if Brussels Stumbles?
Last week, the European Parliament rejected a proposal to reduce the quantity of greenhouse gas (GHG) emissions allowances in order to fix a supply-demand imbalance in the European Union Emissions Trading System (EU ETS). Some view this as the beginning of the end of the European Union’s ten-year carbon cap-and-trade experiment. A high profile failure of the EU ETS is likely to provide ammunition to critics California’s cap-and-trade program.
Continue Reading Questions & commentsWhat Will It Cost for California to Save the World? California Conducts its First Greenhouse Gas Cap-and-Trade Auction
By Whitney Hodges, Randy Visser & Olivier Theard
The landmark Global Warming Solutions Act of 2006 (“AB 32”) tasked the California Air Resources Board (“ARB”) with reducing greenhouse gas (“GHG”) emissions to 1990 levels by 2020. In adopting a scoping plan assembling a number of differing, but complementary, GHG reduction strategies, the ARB included a “cap-and-trade” program as one such strategy to help satisfy AB 32’s goals while allowing industry flexibility in choosing emissions reduction options (i.e., facilities could choose to buy pollution credits, or could choose to reduce emissions and sell credits on the market). The “cap-and-trade” program was deemed preferable to other potential options such as a carbon tax.
Continue Reading Questions & commentsOvercoming Inertia -- Advancing Corporate Leadership in Adaptation
Sheppard Mullin Partner Geoff Willis was a recently a featured panelist before the Global Adaptation Institute on the subject of Overcoming Inertia — Advancing Corporate Leadership in Adaptation.
Continue Reading Questions & commentsCalifornia Appellate Court Greenlights Air Resources Board's Cap-And-Trade Program [1]
Association of Irritated Residents v. California Air Resources Board et al., A132165 (1st Dist. Div. 3, June 19, 2012)
By Randolph Visser and Whitney Hodges
On June 19, 2012, the California First District Court of Appeal upheld the California Air Resources Board’s (“ARB”) Climate Change Scoping Plan (“Scoping Plan”), which charts dozens of climate change control measures. This ruling clears the way for ARB to move forward with its designated plan to combat greenhouse gas (“GhG”) emissions with a market-based cap-and-trade program. The decision also found the Scoping Plan to be in compliance with the 2006 California Global Warming Solutions Act, also known as AB 32, which required ARB to prepare a scoping plan to reduce GhG emissions to 1990 levels by the end of 2020. A ruling against ARB could have forced ARB to revise the Scoping Plan and freeze implementation of its GhG regulations.
Continue Reading Questions & commentsCalifornia Adopts Revolutionary New Clean Car Standards
On January 27, 2012, the California Air Resources Board (“ARB”) notched a potential victory in the battle against greenhouse gas (“GhG”) emissions. In a unanimous vote, ARB adopted the Advanced Clean Cars (“ACC”) regulatory package, which is a program designed to deliver cleaner air, reduce GhG emissions, and help build the market for fuel cell and battery-electric vehicles. At the opening of the ARB hearing on this historic vote, Mary Nichols, ARB Chairman, predicted:
Continue Reading Questions & commentsEnforcement of California Low-Carbon Fuel Standard Blocked
California's effort to reduce the carbon footprint of producers and refiners of fuel has hit a snag. Shortly after the passage of the Global Warming Solutions Act (AB32), requiring reduction of greenhouse gases to 1990 levels by 2020, former California Governor Arnold Schwarzenegger signed an Executive Order setting a statewide goal of reducing "the carbon intensity of California's transportation fuels by at least 10 percent by 2020." Pursuant to this Executive Order, the California Air Resource Board (ARB) adopted the Low Carbon Fuel Standard (LCFS) in June 2007 as an early action measure under AB32. In April 2010, the regulation was formally adopted. On December 29, 2011, District Judge Lawrence O’Neill in the Eastern District of California issued a preliminary injunction blocking ARB from implementing LCFS. Continue Reading Questions & comments
ARB Passes Final Regulations for Cap-And-Trade Program
By Whitney Hodges & Olivier Theard
After months of CEQA litigation and political lobbying, including an appeal to the California Supreme Court (previous article can be found here), California's landmark climate change bill, the Global Warming Solutions Act of 2006 ("AB 32"), has been modified and appears ready to be implemented starting in January 2012.
California AB 32's Cap-And-Trade Program Developments
By Randolph Visser, Olivier Theard and Whitney Hodges
This article is the latest in a series chronicling the first litigation challenge to AB 32 (the Global Warming Solutions Act) and the cap-and-trade program in Association of Irritated Residents, et al. v. California Air Resources Board, Case No. CPF-09-509562, ("Ass'n of Irritated Residents v. CARB"). Though environmental justice groups continue to object to cap-and-trade as the primary vehicle to reduce greenhouse ("GHG") emissions to 1990 levels by 2020, the California Supreme Court recently allowed California Air Resources Board's ("ARB") cap-and-trade implementation to move forward, and agency rule development continues.
City's "Business‑As‑Usual" Threshold OK For Evaluating Greenhouse Gas Emissions Under CEQA
By Jeff Forrest and Ashley Hirano
In this clean-tech era, Citizens for Responsible Equitable Environmental Development ("CREED") v. City of Chula Vista marks only the third time that a court has published a case addressing greenhouse gases in California. In CREED, the City of Chula Vista certified a mitigated negative declaration ("MND") and approved development permits for a project that would demolish an existing Target store, a smog check facility, and a small market, and construct in its place a larger Target store. CREED filed suit, claiming that CEQA required the City to certify a full environmental impact report because the project would have a significant environmental impact on hazardous materials, air quality, particulate matter and ozone, and greenhouse gas emissions. While the court held that an EIR was likely required for other reasons, the court also held that, to demonstrate the project’s consistency with the GHG emissions reduction goals established by California's "Global Warming Solutions Act" (AB 32), the City had properly relied upon evidence the project’s emissions were below the GHG threshold of significance. The City established this threshold of significance using what has become known as the "Business-As-Usual" ("BAU") method. The court also held that the City properly relied on the thresholds of significance in the South Coast Air Quality Management District's CEQA Air Quality Handbook to conclude that the project's air quality impacts (particulate matter and ozone) were not cumulatively considerable even though the San Diego air basin is in non‑attainment for particulate matter pollution.
Continue Reading Questions & commentsCarbon Dioxide Emissions Not Subject to Federal Common Law Nuisance Claims
American Electric Power Co., Inc. v. Connecticut (June 20, 2011, No. 10-174) __ U.S. __
By Robyn Christo & Micah Bobo
In the battle over climate change, the Supreme Court once again set an important precedent in American Electric Power Co., Inc. v. Connecticut (“American Electric Power”). In an 8-0 decision written by Justice Ginsburg (Justice Sotomayor recused herself, presumably because she heard the matter while sitting on the Second Circuit), the Court held that Congress's delegation of the power to regulate greenhouse gasses to the Environmental Protection Agency (“EPA”), "displaces federal common law" relating to the abatement of carbon dioxide ("CO2") emissions.
Superior Court's Injunction Preventing California's Cap and Trade Program Has Been Stayed...Right?
By Randolph Visser and Whitney Hodges
Until recently, Association of Irritated Residents v. California Air Resources Board proceeded along the litigation path as smoothly as any environmental challenge might. However, things took an unexpected twist last week that has left unanswered questions and many spectators baffled.
Final Decision Suspends California's AB 32 GHG Regulations: What Now?
By Whitney Hodges
On March 18, 2011, Judge Ernest Goldsmith of the San Francisco County Superior Court suspended implementation of AB 32, California's landmark law to reduce greenhouse gas ("GHG") emissions. In Association of Irritated Residents v. California Air Resource Board, [Statement of Decision] the Court found the California Air Resource Board (the "ARB")'s adoption of AB 32's Climate Change Scoping Plan (the "Scoping Plan") to be in violation of the California Environmental Quality Act ("CEQA"). The ruling determined that the ARB abused its authority by not adequately analyzing potential alternatives to a carbon "cap-and-trade" program aimed at limiting GHG emissions.
California Court Issues Tentative Ruling Enjoining AB 32 Implementation
By Whitney Hodges
On January 21, a San Francisco Superior Court issued a proposed decision that could significantly delay the implementation of the Global Warming Solutions Act of 2006 ("AB 32"). In Association of Irritated Residents, et al. v. California Air Resources Board, Case No. CPF-09-509562, the Court held that the California Air Resources Board (CARB) failed to comply with the California Environmental Quality Act (CEQA). The Court found the CARB to have neglected to conduct a sufficient environmental impact review prior to adopting the State's AB 32 Scoping Plan (Plan). Specifically, CARB failed to adequately analyze all potential alternatives and prematurely adopted the Plan prior to fully responding to public comment.
Proposition 23's Failure Means Full Speed Ahead On AB 32
By Gregory E. Woodard
Proposition 23 would have suspended AB 32, California's 2006 global warming initiative, until unemployment fell under 5.5% for one year. The campaign was bitter, with both sides claiming doom and gloom whether Prop 23 passed or failed. The electorate spoke loudly and soundly defeated Prop 23, 61%-39%.
The Truth About Proposition 23: Is it a "California Jobs Initiative" or a "Dirty Energy Proposition"...or Neither?
By Greg Woodard and Jim Pugh
On November 2, 2010, Californians will cast a vote on Proposition 23 (the "California Jobs Initiative") and decide whether or not to suspend AB 32, also known as the "Global Warming Solutions Act of 2006." The legislature enacted AB 32 with the intention of establishing California as a national leader in the climate change and clean technology arena. The stagnating economy has provided AB 32 opponents with a platform to propose suspending AB 32 until unemployment in California falls below 5.5%, a proposition both advocates and detractors of Prop 23 admit will not likely happen for several years. Prop 23 supporters claim that AB 32 is a job-killer that will increase Californians' energy bills. Opponents counter that AB 32 provides jobs for California's burgeoning clean tech industry and suspension of AB 32 will threaten not only that industry, but all but end California's attempt to drastically curb greenhouse gas emissions (GHGs) in the state. Amid the flurry, the truth about Prop 23 is likely somewhere in the middle. Below, we provide the backdrop for Prop 23 and objectively summarize the arguments for and against it.[1]
Council for Environmental Quality Issues Draft NEPA Guidance for Consideration of Climate Change Effects
The Council of Environmental Quality issued draft guidance to federal agencies on how to analyze the environmental effects of greenhouse gases ("GHG") and climate change under the National Environmental Policy Act ("NEPA") on February 18, 2010. (Available here.)
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A Brief Overview of the Recent Amendments to CEQA Guidelines
By Brenna Moorhead
On December 29, 2009, the California Natural Resources Agency ("Resources Agency") adopted amendments to the guidelines implementing the California Environmental Quality Act ("CEQA"). The amendments were filed with the Secretary of State on February 16, 2010 and will assist lead agencies in complying with CEQA's existing requirements when analyzing and mitigating the impacts of greenhouse gas ("GHG") emissions[1] associated with a proposed project.
U.S. Fish and Wildlife Service Seeks Public Comment on Proposed Strategic Climate Change Plan
By Robert Uram and Robyn Christo
The United States Fish and Wildlife Service (the "Service") is accepting public comments through November 23, 2009, on its proposed Strategic Plan for Climate Change ("Strategic Plan") and accompanying 5-Year Action Plan ("Action Plan"). Both Plans are part of the Department of the Interior's (the "Department's") commitment to organizing a Department-wide effort to protect the country's water, land, fish and wildlife against the effects of global warming. The Service developed the Plans to provide the basic framework for and specific details of its overall strategy for working with others to "ensure the sustainability of fish, wildlife and habitats in the face of climate change." The Strategic Plan lays out the Service's general climate change goals whereas the Action Plan identifies specific actions the Service will take to accomplish those goals.
California Governor Signs S.B. 827 into Law; South Coast Air Quality Management District Now Permitted to Continue Emissions Trading Program
In 2008, a superior court judge placed a moratorium on certain aspects of the emissions trading program administered by the South Coast Air Quality Management District ("District"), instructing the District to complete an environmental impact report regarding its 2007 amendments to District Rule 1315 and District Rule 1309.1. See Natural Resources Defense Council v. South Coast Air Quality Management District, Case No. BS110792 (C.D. Cal., Nov. 3, 2008). Rule 1315 sets forth procedures for tracking emissions credits, while Rule 1309.1 establishes a priority reserve to more easily provide credits to certain preferred sources. Perhaps unexpectedly, the decision with respect to Rule 1309.1 had a large impact on small businesses and public services which have not been permitted to expand because the District has been unable to issue any emissions credits to these entities.
The EPA Uses the Clean Air Act to Propose New Rules Intended to Reduce GHG Emissions from Large Emitters
By Kyndra Joy Casper
In a move certain to fuel the debate over climate change legislation in Congress, the U.S. Environmental Protection Agency (the "EPA") recently revealed a new proposal to regulate greenhouse gas ("GHG") emissions from power plants, factories and refineries, which are considered large GHG emitters. The regulations being developed would, for the first time, require the use of best available control technology (“BACT”) to compel large emitting sources to curb GHG emissions whenever a new facility is constructed or a major modification takes place. The proposal would require large industrial facilities that emit at least 25,000 tons of GHGs a year to obtain construction and operating permits. Small businesses such as farms, restaurants, and many other types of small facilities would not be included in these requirements. The EPA’s proposal signals that it will act under the existing authority provided by the Clean Air Act, meaning that if Congress does not pass a climate change bill, the EPA will act on its own to curb emissions.
2nd Circuit Allows Public Nuisance Suit Against Greenhouse Gas Emitters
Connecticut v. American Electric Power Company Inc., ____F.3d ____, No. 05-5104 (2nd Cir. 2009)
By James Rusk
States and private plaintiffs may sue utility operators under the federal common law of nuisance to abate carbon dioxide ("CO2") emissions that contribute to global warming, the Second Circuit Court of Appeals held this month. Although the 139-page opinion appears to open a new front in the fight over climate change, its full import is uncertain. The court held only that plaintiffs had standing, that they had stated public nuisance claims under the federal common law and that those claims were justiceable. It did not reach the merits of plaintiffs' claims, and it expressly noted that those common law claims could yet be displaced by federal legislative or rulemaking action. With that in mind, the case could prove more significant as an additional impetus for national greenhouse gas regulation than as a tool for judicial control of emissions.
A State At Risk Attempts to Adapt to Climate Change
By Brenna Moorhead
The California Natural Resources Agency (CNRA) led twelve state agencies in preparing the Draft California Climate Adaptation Strategy. The Strategy responds to the mandates of Executive Order S-13-08, which called for development of an adaptation strategy for addressing climate change. Consistent with the Order, the Strategy summarizes the best known science on climate change impacts, assesses the state’s vulnerability to these impacts, and outlines solutions to be implemented by state agencies to promote resiliency.
Sheppard Mullin's New Climate Change and Clean Technology Blog
Please visit our new Climate Change and Clean Technology Blog at www.cleantechlawblog.com.
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