Cap-and-Trade Program Update: California Air Resources Board Releases Court-Ordered Alternatives Analysis Under CEQA

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On June 13, the California Air Resources Board (CARB) released a supplement to its previous Environmental Review Document that considers new alternatives to California’s cap-and-trade program, which was developed pursuant to California's landmark greenhouse gas (GHG) law, the Global Warming Solutions Act of 2006 (AB 32). CARB's supplemental environmental review document is designed to fortify its previous environmental review of the cap-and-trade program under the California Environmental Quality Act (CEQA).

As discussed in a previous advisory, a recent San Francisco Superior Court decision in Association of Irritated Residents v. CARB [Case No. CPF-09-509562] found that CARB failed to adequately analyze alternatives to cap-and-trade as a means of reducing greenhouse gas emissions. Under CEQA, CARB is required to consider “feasible alternatives to the proposed action” that reduce adverse environmental impacts and comply with CEQA’s broad policy goals and substantive standards.

CARB’s new cap-and-trade alternatives analysis under CEQA

In addition to a “no-project” alternative and the cap-and-trade program, the supplemental environmental review document CARB released yesterday analyzes three alternatives: (1) source-specific regulatory requirements, (2) a carbon fee or tax, and (3) a “combination” approach that incorporates select features from the cap-and-trade program, the source-specific regulatory requirements, and the carbon fee/tax proposals.

June 13 marks the beginning of the 45-day public comment period, which ends on July 28, 2011. CARB staff plans to hold a public workshop on its supplemental environmental review of the alternatives to cap-and-trade during the 45-day comment period, though the specific date has not been set. CARB will consider the supplemental environmental review document, public comments, and issues raised at the workshop at its board meeting scheduled for Aug. 24, 2011.

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Published In: Energy & Utilities Updates, Environmental Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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