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Another set-back for carbon trading – this time in California

Another set-back for carbon trading - this time in CaliforniaLast week, a court in San Francisco ruled against California’s cap and trade programme. Here’s how California Watch reported the decision: “Activists are celebrating a victory in their lawsuit against the state’s Air Resources Board, halting the start of the landmark climate change law, at least momentarily.”

The court ruled that the California Air Resources Board failed to consider fully the alternatives to the cap and trade part of “Assembly Bill 32: Global Warming Solutions Act.” The organisations and individuals that took out the case against AB 32 work at community level against polluting industry – which, as the press release below notes, is “disproportionately located in low income communities of colour.”

The organisations were not protesting against legislation that is supposed to address climate change. In an interview with California Watch, Alegria De La Cruz, legal counsel for the organisations, explained that,

her clients did not file suit to slow down regulations that would reduce greenhouse gas pollution. Rather, they wanted the board to seriously consider alternatives – such as directly regulating polluters at the smokestack.

This case highlights one of the crucial problems with offsets. Even if emissions are avoided in one place, for example through a community forestry REDD project in Indonesia, pollution will be allowed to continue somewhere else, for example an oil refinery built next door to communities in California. While a process of free, prior and informed consent may be able to help prevent human rights abuses in Indonesia, a similar FPIC process also needs to be carried out with the communities affected by the continued (or increased) pollution. It is difficult to think of any reason why informed communities would agree to their homes and environment remaining polluted, or even becoming even more polluted.

Cara Horowitz, a law professor at UCLA, summarises the decision as follows:

The court concludes, however, that the state failed to conduct adequate environmental review of its implementation decisions under CEQA [California Environmental Quality Act]. In particular, the court holds that the Air Resources Board (1) failed to consider adequately alternatives to the mix of measures adopted in the scoping plan, including especially alternatives to cap-and-trade measures, such as a direct carbon tax; and (2) improperly began implementing the scoping plan measures before its CEQA process was complete.
The court therefore enjoins ‘any further implementation of the measures contained in the scoping plan’ until the state has complied with CEQA.

Jon Costantino, a senior adviser on climate change and energy policy at the law firm Manatt, Phelps & Phillips, explains that,

The court concluded that CARB’s only failure was to an inadequate environmental review of the alternatives to its policy decisions, i.e., implementing a Carbon Tax instead of the Cap and Trade System. It is this review that must be revisited by CARB, and approved by the judge, before the AB 32 train can get moving again.
Therefore, the multimillion dollar questions are: “Will the California Cap and Trade System start on time in January 2012?” and “Does this ruling put a halt on all the other Scoping Plan measures?” At this point it is not clear what the answers will be.

The court’s decision is available here (pdf file, 1.8 MB).

For Immediate Release
March 21, 2011

SAN FRANCISCO, CALIFORNIA – On March 17, 2011 a San Francisco Superior Court judge ruled that the California Air Resources Board violated the California Environmental Quality Act (CEQA) when it failed to properly consider alternatives to a “cap and trade” program in its plan to implement AB 32, the California Climate Solutions Act. Cap and trade is pollution trading that allows the worst polluters to continue or increase their pollution by buying “reductions.” These polluters are disproportionately located in low income communities of color. Instead of reducing pollution and creating jobs in California, dirty facilities, like oil refineries, get to buy credits from often unverifiable projects in other states and countries.
“Allowing the most entrenched polluters to increase pollution violates our environmental rights and is not the way to stop poisoning our air and slow catastrophic climate change,” said Bill Gallegos, CBE’s Executive Director. “ARB was dogmatic in its focus on cap-and-trade even though it is not effective in reducing greenhouse gases, increases pollution in heavily polluted low-income communities and communities of color, and misses the opportunity to create jobs in California. Now the ARB has a chance to do it right and consider real alternatives to pollution trading. We continue to be willing to work with the ARB to make the whole plan work for everybody.”
Environmental justice and air quality organizations have been fighting for years to get ARB to protect low-income communities of color in its efforts to reduce greenhouse gas emissions. In 2009, these groups filed suit to enforce their rights under AB32 and CEQA.
Judge Ernest Goldsmith’s ruling rejected ARB’s rationale for choosing a pollution trading scheme, stating that the law requires more than “a discourse on cap and trade justification.” The decision requires ARB to fully analyze alternatives to the cap and trade program, and stops all implementation of the program until ARB complies with the law. “ARB refused to do its job so we were left with no other choice but to sue to protect public health,” said Caroline Farrell, Executive Director for the Center on Race, Poverty & the Environment. “The court’s decision ensures that ARB fully understand how its decisions impact the most vulnerable of Californians and avoid unintended negative consequences as we move forward with this groundbreaking and transformative measure.”
In addition, the court ruled that ARB violated a key CEQA protection when it prematurely moved forward with its plan before completing environmental review, stating that ARB “interpreted its regulation in a way that undermines CEQA’s goal of informed decision-making.”
“ARB jumped the gun and failed to respond to the thousands of public comments it received before it approved and implemented its plan,” said Tom Frantz, President of the Association of Irritated Residents. “This ruling will compel ARB to fully consider those of us most affected by its decisions, and not just move forward in its haste to make major polluters happy.”
Communities for a Better Environment represented itself and its members; the Center on Race, Poverty & the Environment (CRPE) represented Association of Irritated Residents, Coalition for a Safe Environment, Society for Positive Action, West County Toxics Coalition, Angela Johnson-Meszaros, Dr. Henry Clark, Jesse Marquez, Shabaka Heru, and Tom Frantz; Angela Johnson-Meszaros represented Martha Dina Arguello, Caroline Farrell, and California Communities Against Toxics.


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  1. I wonder if all those ‘conservation’ organisations – like Conservation International, TNC, Rainforest Alliance, Wildlife Conservation Society, Environmental Defense Fund, NRDC etc – that are in bed with these polluting companies, and partnering with them in the so-called ‘Avoided Deforestation Partnership’, and have applauded AB 32, would be so keen if the smokestacks that they are encouraging to carry on polluting the planet were all relocated to Washington DC NW or downtown NYC?