June was certainly an interesting month for those following the progression of California’s Global Warming Solutions Act ("AB 32"), which requires that California cut greenhouse gas ("GHG") emissions to 1990 levels by 2020. The "linchpin" of AB 32 is a proposed cap-and-trade program, a market-based approach to reducing GHG emissions in which the California Air Resources Board ("ARB") sets a collective cap on GHG emissions and then allows under and over-polluters to buy and sell credits among themselves. However, recent judicial and agency developments have altered the cap-and-trade landscape. At the very least, the cap-and-trade program, if it survives judicial review, will not begin in earnest until 2013 (instead of the planned January 1, 2012 start date).

In 2009, a citizen’s group, Association of Irritated Residents ("AIR"), challenged ARB’s adoption of the cap-and-trade program found in the AB 32 Scoping Plan (the Plan for compliance with AB 32), alleging that ARB failed to adequately analyze alternatives to the cap-and-trade program, thereby violating the California Environmental Quality Act ("CEQA").