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In the closing weeks of 2022, the California Air Resources Board (“CARB” or “Board”) approved its final 2022 Scoping Plan, which sets forth a detailed roadmap to accelerate the reduction of greenhouse gas (“GHG”) emissions in order for the state to achieve carbon neutrality by 2045, with an interim goal of achieving a reduction in GHG emissions of 40% below the 1990 level by 2030 (the goal adopted by the State in 2017’s SB 32).…

Continue Reading California Air Resources Board Adopts 2022 Scoping Plan

A bill that would have made development and expansion of warehouse and logistics projects more difficult in the Inland Empire has stalled out in the present legislative session. Assembly Bill 2840 passed the State Assembly earlier this year, but failed to make it out of the Senate Governance and Finance Committee at the hearing on June 29, 2022. While the bill may be down, do not count it out. In fact, AB 2840’s author, Assembly Majority Leader Eloise Gómez Reyes, is expected to renew her efforts next year to get the potentially de facto moratorium legislation enacted.…

Continue Reading E-Commerce Development Boom or Bust? Potential Setbacks for Warehouse Development in Inland Empire on Hold for Now

On February 20, 2020, the California Energy Commission approved its first community solar system under the 2019 Energy Code, which allows developers of new homes within Sacramento Municipal Utility District (“SMUD”) to meet mandatory solar energy system requirements through solar agreements with SMUD instead of installation of solar panels on new homes. …
Continue Reading CALIFORNIA MANDATORY SOLAR UPDATE: First Community Solar Program Approved by California Energy Commission

Public awareness regarding air pollution in the European Union is at an all-time high and citizens expect authorities to act. In this vein, the European Commission[1] has recently taken a number of direct and indirect actions, including engagement of the Court of Justice of the EU, enforcement measures against car manufacturers and a Europe-specific “Green Deal,” to stem the tide of rising air pollution and become the world’s first climate-neutral continent by 2050.
Continue Reading EU is Taking Action: The Fight for Clean Air

Today President Trump announced on Twitter that the U.S. was revoking California’s waiver under the Clean Air Act (CAA) which allowed it to impose stricter tailpipe emission standards than the federal ones. California’s Governor Newsom and Attorney General Becerra immediately announced that the state would file suit to challenge the revocation.

While the revocation has been characterized as an immediate rollback, the federal corporate average fuel economy (CAFE) standards[1] established under the previous administration, which are consistent with California’s, remain in place. Last year the Trump administration proposed to rollback those standards, freezing the efficiency and emission rules in 2021 and canceling further increases in stringency set through 2028. The final rule has not yet been issued. It is rumored that it will not be, as the administrative record supporting it has many problems and most acknowledge that it faces significant legal hurdles.
Continue Reading Politics Trumps Economics? Trump’s Revocation of California’s Waiver Under the Clean Air Act

A federal district court has ruled that the Bureau of Land Management (“BLM”) failed to adequately consider climate change when approving a set of oil and gas leases on public lands in Wyoming. The ruling should be of broader interest to developers and energy companies because it offers guidance on how to properly analyze a project’s effects on climate change under the National Environmental Policy Act (“NEPA”). The law in this area remains unsettled –especially since President Trump rescinded the Obama Administration’s formal guidance on NEPA and climate change in 2017. Future developments are likely, and project sponsors should monitor them closely.

At issue in the case are oil and gas leases covering 300,000 acres of public lands in Wyoming. For each lease sale, BLM prepared an environmental assessment to comply with NEPA. The environmental assessments discussed climate change on a “conceptual level,” without quantifying and analyzing the greenhouse gas emissions that would result from the lease sales. The court found the analysis inadequate under NEPA, and it halted drilling under the leases and sent the matter back to BLM for additional environmental review. In its lengthy ruling, the court offered concrete guidance to BLM on how to fix its analysis of greenhouse gas (“GHG”) emissions and climate change on remand, including that:

  • BLM should quantify GHG emissions that would result from drilling oil and gas wells on the leased parcels.
  • BLM should provide more detail about “downstream” GHG emissions that would result from the consumption of oil and gas produced under the leases.
  • BLM should better evaluate the “cumulative” effect of the leases together with other projects, including by comparing GHG emissions from the leases against available emissions forecasts and other BLM programs.

This guidance may also serve as a useful roadmap to NEPA compliance for other projects, particularly other energy projects. And development opponents are likely to use the court’s reasoning to challenge future NEPA documents. Below we break down the court’s direction on three categories of GHG emissions, each requiring a different level of detail.
Continue Reading District Court Provides Guidance On Climate Change Analysis Under NEPA

The Ninth Circuit Court of Appeals recently upheld – for the second time – California’s Low Carbon Fuel Standard (“LCFS”) against constitutional challenges brought by industry groups. The case, Rocky Mountain Farmers Union v. Corey (9th Cir. 2019) (No. 17-16881) (“Rocky Mountain II”), considered the groups’ claims that all 3 historical versions of the LCFS violate the Commerce Clause and the “federal structure of the Constitution” by regulating extraterritorially. The court held that while the plaintiff’s claims had changed form since the first time the court upheld the LCFS, “both the regulations and the claims have the same core structure now as they did then.” The court used this similarity to guide its analysis and uphold the district court’s dismissal.
Continue Reading On Repeat: Courts Again Uphold Low Carbon Fuel Standard Programs

California Chamber of Commerce, et al. v. California Air Resources Board, et al., Case No. C075930 (Cal. Ct. App. 3d. Dist., 2017).

On April 6, the California Court of Appeal for the Third District issued its long-awaited decision in the consolidated lawsuits challenging the greenhouse gas (“GHG”) emission allowance auctions, which are a key component of the California Air Resources Board’s (“CARB”) Cap-and-Trade Program.  The court held that CARB has the authority to establish the auctions and that they do not constitute an illegal tax.  The second holding is key and breaks new legal ground; it also was made over a strong dissent.  As the court put it, “the hallmarks of a tax are: 1) that it is compulsory; and 2) that the payor receives nothing of particular value for payment of the tax.”  (Op. at 5.)  The auction system is not a tax because 1) “the purchase of allowances is a voluntary decision driven by business judgments as to whether it is more beneficial to the company to make the purchase than to reduce emissions,” and 2) “the allowances are valuable, tradable commodities, conferring on the holder the privilege to pollute.”  (Id.)  This is a major victory for the Program and the State’s efforts to address climate change by reducing GHG emissions. However, there is a question whether the decision will stand.  There was a strong dissent, and the decision is sure to be appealed to the California Supreme Court.  Meanwhile, the Legislature is currently at work on crafting legislation aimed at determining how the existing ambitious emission reduction mandates will be met.  The court’s decision will factor into those critical legislative deliberations, which will resume later this month after the spring recess.
Continue Reading GHG Allowance Auctions are Not a Tax; Key Element of State’s Cap-and-Trade Program Upheld

The fashion industry has recently been using its clout and cachet to combat climate change. Who else has a heavy hand in the fight against climate change? The answer, while a bit less surprising, is the White House. With a common goal, it has been an inspiring journey for these two unlikely allies.
Continue Reading Climate Change Gets Fashionable: The Fashion Industry Embraces The President’s Climate Change Initiative

On October 15, 2013, the United States Supreme Court granted certiorari to review six of the nine submitted petitions stemming from an appellate court ruling upholding Environmental Protection Agency (“EPA”) greenhouse gas (“GHG”) controls at utilities, factories and other facilities around the country.  Specifically, the challenged appellate ruling from the Court of Appeals for the District of Columbia Circuit unanimously upheld EPA’s GHG emission endangerment findings, rebuffed challenges to the EPA’s tailpipe rule for automobile emissions and its applicability to stationary sources, and determined the EPA was “unambiguously correct” in using existing federal law to address global warming.  However, the Supreme Court’s review will be more limited than some petitioners sought and should not jeopardize the Obama administration’s larger climate-change agenda.
Continue Reading Supreme Court Grants Limited Review of GHG Emissions Regulations