California’s cap-and-trade program withstood a battle in court, and now the Legislature is proposing changes to the controversial program.  Senator Bob Wieckowski (Democrat – District 10), Chair of the Environmental Quality Committee, has authored Senate Bill 775 (“SB 775”) which would extend the cap-and-trade program to 2030 with modifications.  The existing cap-and-trade program, established under Assembly Bill 32 (2006) or the California Global Warming Solutions Act (“Act”), expires in 2020.  The Act requires the State Air Resources Board (“ARB”) to approve a statewide greenhouse gas emissions limit equivalent to 1990 greenhouse gas emissions level to be achieved by 2020, and to ensure that statewide greenhouse gas emissions are reduced to at least 40% below the 1990 level by 2030, as outlined in Senate Bill 32 (2016).
Continue Reading Senate Bill Proposes Major Market-Based Remodel of Cap-and-Trade Program

This is the third update on environmental regulatory and legal developments in Los Angeles and adjacent counties, as well as the Southern San Joaquin Valley.  We welcome your comments and updates.

South Coast Air Quality Management District

*Governing Board Shift:  New Governing Board Member Sheila Kuehl replaced Mike Antonovich, returning the Board to a Democratic Majority.  Ms. Kuehl calls upon the South Coast Air Quality Management District (District) to use its full regulatory power, and she has strong ties with the California Legislature.  New emphases now include further regulations of stationary facilities, such as warehouses and shopping malls that are considered “indirect sources” of air emissions because they attract emissions from cars and trucks, as well as a termination of the RECLAIM Program.  Questions on the latter include when (2025, 2023, 2031?), treatment of credits from shutdowns, and how companies that invested in long-term credits will be dealt with.  In addition, the District wants to achieve the NOx shave under RECLAIM and at the same time sunset the Program.  Collaterally, the District is pushing the California Air Resources Board (CARB) and US EPA to do their “fair share” to regulate mobile sources so that further efforts to improve air quality will not be piled on the backs of stationary businesses.Continue Reading SOUTHERN CALIFORNIA ENVIRONMENTAL UPDATE #3 – APRIL 24, 2017

As the sands shift on federal climate change policy, California’s cap-and-trade program survives to fight another day.  Yesterday, a California Court of Appeal upheld the program because it does not impose a tax subject to the two-thirds supermajority vote requirement under Proposition 13.  The Court also affirmed the California Air Resources Board’s (CARB) authority to auction GHG emissions allowances.  For the ins and outs of the decision and prior coverage of the case, pop on over to Renewable + Law for a great post by my colleagues, Allison Smith and Parissa Florez.

Now, stating the obvious here: a lot is riding on this case.  The cap-and-trade program has generated billions of dollars in fees and the program plays a crucial role in California’s goal to cut GHG emissions.  Those fees don’t get paid with monopoly money, but instead hit the bottom line of companies across many different industries.  Of course, some consider the fees to be a small price to pay to prevent flooding, the sixth mass extinction, and in their view, the end of the world. On a level that hits closer to home for many readers of this blog, the challenge to the cap-and-trade program has added to the uncertainty of how to address GHG emissions for development projects subject to CEQA.  As previously discussed by my colleague, Tom Henry, reliance on the cap-and-trade program appears to be one of the few approaches to a legally defensible CEQA GHG analysis.Continue Reading CARB Wins Again on Cap-and-Trade, But Is It Really in Any Danger of Losing?

On March 23, 2017, the California Air Resources Board (“ARB”) adopted regulations for Greenhouse Gas Emission Standards for Crude Oil and Natural Gas Facilities (“Methane Regulations”).  The Methane Regulations impose emission controls on offshore and onshore oil production and processing facilities and at natural gas compressor stations, underground storage facilities, and gathering and boosting stations.
Continue Reading ARB Adopts GHG Emission Standards for Oil and Gas Facilities; Operators Wary of Costs

My colleague, Michael Sherman, posted yesterday about two issues decided in the California Supreme Court’s decision in Center for Biological Diversity v. California Department of Fish and Wildlife.  Today, I’ll address the part of the decision that involves the evaluation of the Newhall Ranch project’s greenhouse gas emissions.  In short, the Court just made it a lot harder to evaluate greenhouse gas emissions under CEQA for any large land use project.  There is likely a solution for some situations where the emissions primarily involve the consumption of transportation fuel – the AB 32 Cap and Trade Program was recently expanded to cover those fuels.  This potential solution is hinted at by the Court.  I’ll get to that at the bottom of the post.  But first I’ll discuss the decision and why it’s a problem.

For some background, the Newhall Ranch project would consist of over 20,000 residential units in Southern California.  The Environmental Impact Report (EIR) for this project was certified back in 2010.  The resulting litigation has since been making its way through the courts.  The California Department of Fish and Wildlife used an approach to analyze greenhouse gas emissions similar to what other lead agencies have been using recently.  They relied on the AB 32 Scoping Plan to set a threshold of significance.  AB 32 requires statewide greenhouse gas emissions to return to 1990 levels by 2020.  In the Scoping Plan, the California Air Resources Board determined that this would require a 29% reduction in statewide emissions from a business-as-usual approach — an approach with no conservation or regulatory efforts beyond what was in place when the forecast was made.  Lead agencies have used this standard to find that proposed projects that would reduce their greenhouse gas emissions by at least 29% over a project with a business-as-usual approach would, therefore, have a less than significant impact for greenhouse gas emissions.
Continue Reading How to Fix Your GHG Analysis After the California Supreme Court’s Newhall Ranch Decision