CALIFORNIA, THE JUNGLE, AND CAP-AND-TRADE

Posted on September 21, 2018 by James Holtkamp

On September 14, 2018, the California Air Resources Board (CARB) issued for public comment the proposed California Tropical Forest Standard.  The proposed standard is not an attempt to address a future in which global warming has changed California’s redwood forests into tropical jungles; rather it is intended to allow reductions in carbon emissions from mitigation of rain forest deforestation in tropical countries to be linked with California’s cap-and-trade program. 

California is already well-known for its influence on culture, economics and politics outside its borders. Here in Utah we sometimes feel like we are really just a big county in eastern California.  Even outer space is not insulated from California.  As the Global Climate Action Summit wound down in San Francisco last week, Governor Brown announced that California would send its own satellite into orbit to track and monitor pollutants.  You can’t get more outside of California than that.

The proposed standard consists of detailed criteria for tropical forest credits and is accompanied by a 185-page draft environmental analysis prepared by CARB under the California Environmental Quality Act.  The proposal is issued under CARB’s cap-and-trade program rules, which authorize CARB to consider reductions originating in developing countries or “subnational jurisdictions” (e.g., provinces or states) within those countries.          

The proposed standard would require the jurisdiction seeking to link its emission reduction program with the California program to develop a “sector plan” demonstrating that the program was developed through a robust, transparent, and participatory process.  The sector plan would detail the legal, policy and program tools used to reduce emissions; procedures for monitoring, reporting and verification of reductions; and provisions to avoid double-counting of reductions with any other program.  The proposal also provides for establishing baseline emission levels, avoiding leakage, securing third-party verification, involving and protecting indigenous communities, and other elements designed to ensure that the reductions are robust and permanent.

The proposal does not include a mechanism for linking tropical forest credits to the California system; rather it is simply a proposal for standards for the credits which, after additional rulemaking by CARB, would be eligible for inclusion in the cap-and-trade program.  

Carbon emissions released from tropical forest deforestation and degradation account for about one-fifth of carbon emissions across the globe. The president and Congress have been unwilling to address the issue.  California has stepped into the breach.

Perhaps living in eastern California is not such a bad thing, after all.

"No More Business as Usual": A Preview of Climate Change and the California Environmental Quality Act in 2011

Posted on January 5, 2011 by Patrick Dennis

As goes California, so goes the rest of the nation? That could be the case with respect to climate change and the regulation of greenhouse gas (GHG) emissions. Climate change and the implications of California’s Global Warming Solutions Act of 2006 (also known as AB 32) continue to remain a topic of great debate and speculation nationwide, as well as in California. AB 32 recently survived an initiative challenge during California’s November 2010 election cycle, and deadlines established in AB 32 to meet greenhouse gas reduction goals continue to loom. Recently, Governor Arnold Schwarzenegger, who just left office a few days ago, gave remarks at a California Air Resources Board meeting and acknowledged the “great, great benefits” from the creation of green jobs and venture capital being provided to GHG reduction projects. However, the Governor’s excitement for the benefits of AB 32 and climate change initiatives were tempered by California’s economic reality. According to the Governor:

 


We have to be sensitive because it is an economic downturn and this Air Resources Board knows that they have to be sensitive. But we have to reach our goal by 2020, our reductions of 25 percent and we’ve got to go and have our 33 percent of renewables by 2020. There are no two ways about that.

 


So what does this mean as we look forward to 2011 with a new Governor and lingering fiscal issues?
 

One area of law where climate change is bound to remain an active topic of discussion, and likely litigation and regulatory development, is with respect to the California Environmental Quality Act (CEQA). At the time AB 32 was adopted, there was uncertainty about the type of greenhouse gas emissions analysis that would be required under CEQA, and opponents of development projects filed several lawsuits to challenge projects on that basis. The early California State superior court decisions after passage of AB 32 ran the gamut from not requiring climate change analysis or a discussion of AB 32 , to finding an environmental impact report inadequate for failing to make a meaningful attempt to determine the project’s effect on global warming simply because it was “speculative”. In 2007, California adopted SB 97, which directed the Governor’s Office of Planning and Research (OPR) to develop recommended amendments to the State CEQA Guidelines for addressing greenhouse gas emissions , with the goal of creating a coordinated policy – instead of a “piecemeal approach dictated by litigation .” The amendments became effective in March 2010.

 


Despite the adoption of the CEQA guidelines amendments, how state and local agencies should analyze and, when necessary, mitigate greenhouse gas emissions still remain somewhat of a mystery, because the amended guidelines and most local governing bodies have fallen short of providing a clear threshold as to what constitutes a significant impact under CEQA, and what should be done to mitigate the impact. However, what we can anticipate for 2011 is that project applicants must “do something” – business as usual (i.e. developing projects without evaluating and, as necessary, reducing GHG emissions) will likely not suffice. The amended guidelines have been adopted, models for quantifying GHG emissions are available, and state and local agencies such as the Attorney General’s Office ) and various air quality management districts have provided recommended mitigation measures and performance-based and numeric thresholds related to climate change. The California Court of Appeal also weighed in on the “do something” mantra in April 2010 in concluding that an environmental impact report was inadequate because it improperly deferred an evaluation of GHG mitigation measures. It held that, “[d]ifficulties caused by evolving technologies and scientific protocols do not justify a lead agency’s failure to meet its responsibilities under CEQA by not even attempting to formulate a legally adequate mitigation plan.”

 


All in all, with AB 32 left intact, the adoption of the new CEQA Guidelines, and the CARB regulatory package for implementation of AB 32 likely to be put in place, 2011 promises to be an active year in California’s legal and regulatory environment – one that the nation will continue to closely monitor as California takes the lead.