Tuesday, February 08, 2011

California Cap-and-Trade Program Under Attack

The South Coast Air Quality Management District (AQMD) voted 10-1 on February 4th to approve Rule 1315, which allows industry to expand in the Los Angeles region by tapping into a public fund of free pollution credits. This sounds like a rule the Center can support if it will enhance the ability of small businesses and public services agencies to participate in the cap and trade program.  The Center is registered in EPA's Acid Rain and NOx allowance trading programs and the Northeastern Regional Greenhouse Gas Initiative (RGGI).

Some environmentalists and environmentalist justice activists, who generarlly oppose cap and trade systems, contend that a proposal by known as Rule 1315, will lock in a phony accounting system that will count years-old pollution reductions as offsets, thus allowing businesses to build new facilities that pollute.

The AQMD believes the free credits to be created by the board would go to small businesses and public service agencies such as police and fire departments, water treatment plants and landfills. The AQMD believes the  environmentalists' proposal would severely limit growth or place a moratorium on growth. AQMD's proposal allows for some growth and at the same time allows us to meet clean-air standards. The AQMD notes that the new rule would not allow the credits to be used for power plants.

The fight over the trading system has ricocheted through state and federal courts for years. In the waning hours of its 2009 session, the California Legislature enacted two laws to circumvent a state court ruling that had suspended the region's trading system. One of those laws explicitly authorized a proposed power plant in Palm Desert to use AQMD offsets that had been banked for use by hospitals and other public facilities.

In a parallel battle, the U.S. 9th Circuit Court of Appeals ruled Wednesday that the EPA violated the Clean Air Act by failing to hold the South Coast district accountable for meeting federal health standards. The district's plan to achieve safe levels of ozone by Nov. 15, 2010 should have been rejected by the federal government, the court said. Specifically, measures to enforce air pollution from pesticides and to control vehicle emissions through mass-transit projects were inadequate.

Another judges opinion has concluded that:

* Alternatives to cap-and-trade not well analyzed-court
* Tentative ruling could face objections, then appeals
* California cap-and-trade plan due to start in 2012

San Francisco Superior Court Judge Ernest Goldsmith has tentatively ruled that California did not adequately consider alternatives to creating a carbon market, a decision that clouds the premier U.S. climate change program's outlook. California's so-called cap-and-trade plan is seen as the vanguard of U.S. climate change policy after the U.S. Congress failed to pass a federal system. The ruling, if finalized, could potentially delay implementation of the cap-and-trade carbon market due to start next year. The tentative ruling does not say precisely what happens to the cap-and-trade program and can also be appealed.

The cap and trade plan establishes state-wide limits on emissions of carbon dioxide and other greenhouse gases but lets power plants and industry trade rights to emit, which could lead to different emissions in different regions.

The judge denied the attempt by the Association of Irritated Residents environmental justice group to force regulators to rewrite its blueprint for specific measures to combat global warming, known as the Scoping Plan of the 2006 climate change law. But he tentatively ordered regulators to set aside the environmental certification for the Scoping Plan and to stop the Scoping Plan's implementation until regulators come into compliance, saying an analysis of alternatives was needed. He did not specify what steps were required, or what that meant for cap-and-trade, but indicated regulators should have analyzed existing data more carefully. The case is Association of Irritated Residents vs. California Air Resources Board, CPF-09-509562.

The Center would like to see the cap and trade program implemented as soon as possible.  These challenges are simply attempts to delay the program to death or kill it outright.  (L.A. Times, 2/3/2011, Reuter, 2/2/2011)

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