Superior Court Judge Sets Minor Roadblock for Air Resources Board in Adopting Cap and Trade Program

On Friday, March 19, 2011, San Francisco Superior Court Judge Ernest Goldsmith ruled that the California Air Resources Board’s (ARB) attempt to implement the State’s landmark greenhouse gas emissions reduction law with a cap and trade program was premature because the agency did not sufficiently evaluate other alternatives to the program nor submit those alternatives to public comment.

In December 2010, the air board set up and adopted the cap and trade program as the centerpiece of the state’s plan to implement AB 32, the 2006 law requiring California to reduce greenhouse gas emissions to 1990 levels by 2020. The program would place state-wide limitations on a company’s carbon dioxide and other GHG emissions and annually reduce the maximum allowable GHGs in order to meet AB 32’s deadlines. For businesses which typically emit higher levels of GHGs, the program would allow the purchase of allowances from other companies. In the alternative, businesses may meet AB 32’s goals by performing other actions which promote a healthy environment.

The Center on Race, Poverty, and the Environment (CRPE) and various other environmental grassroots organizations, however, criticized the plan, arguing that allowing companies to buy the rights to higher levels of GHG emissions would result in existing businesses emitting higher levels of other pollutants into neighboring communities. CRPE brought suit against ARB, seeking to require the agency to first examine “more appropriate” alternatives to the cap and trade program before it implementing the plan. San Francisco Superior Court Judge Ernest Goldsmith agreed with the organization, ruling that ARB did not take a hard look at alternatives to the cap and trade program.

While the judge’s ruling does not explicitly require ARB to delay the implementation of, nor prohibit it from adopting, the cap and trade program, the ruling does direct the board to (1) seek other options and (2) explain why each of the alternative options were deemed inadequate. The ruling effectively prevents ARB from taking additional steps to execute the program, as the board must first conduct an environmental review and public comment period. Stanley Young, ARB spokesman, stated the board had already conducted an extensive examination of available alternatives prior to deciding on the cap and trade program, and will submit its findings to the court. Additionally, according to Young, ARB plans to appeal the judge’s decision. (See