Topic: AB 32
Judge Rules Part of AB 32 Unconstitutional
A district court judge in California dealt a major setback to AB 32, California’s landmark global warming law. With the goal of reducing greenhouse gas emissions to 1990 levels by 2020, AB 32 set a Low Carbon Fuel Standard that required the carbon content in gasoline to be reduced by 10% and required that 20% of total gasoline used in the state come from renewable fuels.
The law was one of the first in the country to use a “carbon intensity” analysis to determine the total amount of green house gases emitted during the production and transportation of fuel. By capping the amount of carbon permissible in the fuel, the law would provide marketable credits to producers and distributors who emitted less carbon. Those who could not comply with the standard would face increased fuel costs as they would be forced to buy additional credits.
However, the law, which went into effect this year, may have stalled before even leaving the gates. According to the judge, the new standard unconstitutionally discriminated against out-of-state producers and attempted to regulate activity that occurred outside of state borders. As a result, the law violated the Dormant Commerce Clause of the Constitution.
The lawsuit was brought by various farm groups, ethanol producers, refiners and truckers. The California Air Resources Board has said it would appeal.
California Air Resources Board Approves Nation’s Largest Cap-and-Trade Program
The California Air Resources Board (CARB) has voted to approve California’s first-of-its-kind carbon market to reduce pollution across California, helping to ensure that the state will make good on its AB 32 pledge to reduce greenhouse gas emissions back to 1990 levels (427 million metric tonnes of carbon dioxide equivalent) by 2020. The program, set to launch on January 1, 2012, is expected to account for roughly 18-27% of the emissions reduction required by AB 32.
Entities affected include power plants, oil and gas refineries, steel manufacturers, and those in other heavy industries that emit more than 25,000 tons of CO2 per year. Each emitter will start with enough free permits to cover most of its emissions, but will eventually have to buy more through quarterly auctions set to begin in February 2012.
Despite this vote, many questions remain as to how the program will be implemented. First, while CARB has determined the total number of allowances that will be allotted to cover emissions from the electricity sector (98 million metric tons in 2012 and declining 15% by 2020), it has yet to establish a concrete methodology for allocating emissions within the sector. CARB must decide how to reconcile its objectives of rewarding utilities that have already taken steps to lower their carbon footprint, while also allowing utilities transition time to make investments in low carbon alternatives. Also at issue is the allocation of auction revenue in the electricity, transportation and industrial sectors. While state law requires that this revenue be directed towards furthering the goals of AB 32, CARB has granted the California Public Utilities Commission (electricity) and the Legislature (transportation and industrial) significant discretion in the use of these funds.
CARB’s action also positions California to link with programs approved by partner jurisdictions in the Western Climate Initiative (WCI) to create a broader Western carbon market. Through the WCI, California has been working with six other western states and four Canadian provinces to design such a regional system that can help deliver lower GHG emissions at a less cost than a California-only system.
Weekly Quick Hits
California’s Destructive Green Jobs Lobby – Opinion regarding the effects of AB 32 and the California voter initiative to repeal AB 32, which failed on November 2. (The Wall Street Journal)
AEG Seeks a Green Stadium For Downtown Los Angeles – A sneak peak at the proposed NFL stadium for downtown Los Angeles. (LA.Streetsblog)
Megabus Expands – Double-decker bus service from Boston to D.C. will start within six months. (The Boston Globe)
MTA Recommends Freeway Toll Lanes – A preliminary study recommends that MTA add freeway toll lanes for solo motorists. (Los Angeles Times)
Weekly Quick Hits
A Solar Boom: Who Owns It? - A discussion of land use and political issues that create tension for the solar industry. (The New York Times)
Urban Land Institute Backs Sprawl-Limiting Law – ULI endorses SB 375 which aims to reduce emissions and vehicle miles traveled by pushing dense urban development and limiting sprawl. (San Francisco Chronicle)
How to Be Urban – A commentary on how architects see the urban landscape in 2030. (The Economist)
Stop the $1 Billion Bag Tax – California Assembly Bill 1998 prohibits the use of plastic bags at grocery stores, requiring consumers to use recycled paper bags or other reusable bags. (American Chemistry Online)
L.A. Plans For More Rail Lines Get A Boost in Washington – Transportation Secretary Ray LaHood expresses support for L.A.’s 30/10 plan. Sees it as a potential model for other transportation projects. (Los Angeles Times)
