California Climate Rethink? CARB's AB 32 Implementation Plan Under Fire

By Tom Tanton -- February 22, 2011

A California superior court recently issued a tentative decision against the California Air Resources Board (CARB) for failing to comply with environmental law pursuant to the implementation of AB 32, California’s global warming law.

The tentative decision directs CARB to rewrite its documentation pursuant to the California Environmental Quality Act (CEQA), and to cease implementation of the AB 32 Scoping Plan until the violation is corrected. The decision is based on violations of process, not the scientific or economic substance of either the CEQA documentation or the scoping plan as critics of climate alarmism would have liked.

Reactions to the tentative finding have ranged from “no big deal” to “hallelujah.” But it is a big deal; CARB’s implementation of AB 32 hangs in the balance, at least for the time being.

Will CARB convince the trial judge to change his decision–or flaunt the order even if unchanged? Rest assured if the decision becomes final, CARB will appeal.

Will CARB admit, maybe, that mistakes were made and work to improve their own process and analyses, rather than just push the blame elsewhere?

Comments from both parties were just submitted. We will see what transpires, but it is wishing too much for a mea culpa from CARB.

Plaintiff (Association of Irritated Residents) Concerns

The judge’s decision found that CARB violated state environmental law in 2008 when it adopted the plan to reduce greenhouse gases–and again last year when it passed cap-and-trade regulations. So if the judge’s decision is made final without substantive change, the state would be ordered to stop the implementation of AB 32 until the CEQA process is fully complied with.

The Association of Irritated Residents filed the lawsuit against CARB. This group is not against AB 32 per se but fears the effect of mandated greenhouse gas (GHG) reductions on  disadvantaged communities in the state. And AB32 specifically directs CARB to evaluate and assess the impacts of measures on low-income and minority communities and to mitigate those impacts where feasible.

The plaintiffs have long complained that a cap-and-trade system will create more pollution in low-income areas in California. The suit focuses in part on the analysis CARB performed on the scoping plan it developed under AB 32, which directed the agency to create a regulatory path for reducing greenhouse-gas emissions to 1990 levels by 2020.

Under CEQA, the agency is required to analyze the environmental impacts of the measures proposed in the scoping plan, as well as alternatives. The environmental groups argued that CARB’s discussion of alternatives in the scoping plan, approved by the agency in December of 2008, was unsupported by facts or data.

As a result, they contended, the agency did not provide the public with a good sense of why it chose to go with a cap-and-trade program, versus other options such as placing a fee on carbon emissions or source-specific regulations.

The San Francisco Chronicle notes:

The Air Resources Board “seeks to create a fait accompli by premature establishment of a cap-and-trade program before alternative (sic) can be exposed to public comment and properly evaluated by the ARB itself,” Goldsmith found, adding that the air board’s “analysis provides no evidence to support its chosen approach.

On the overall carbon emission reduction plan, the court found the air board approved it prior to issuing responses to public comment as is required by law and the air board’s own regulatory program.

In an excellent piece of reportage about the utter arrogance and lack of accountability of CARB, CalWatchDog reporter, Katy Grimes, also notes the “no big deal” reaction of UCLA wherein:

Described as only a “temporary setback,” an analysis of the judge’s decision sent out last week by UCLA said, “the tentative ruling, should it become permanent, will create some bumps in the road toward AB 32 implementation, but I predict that the bumps will be only small ones.” Ann Carlson, the author of the UCLA memo also said, “The court decision is, appropriately in my view, highly deferential to the complex decisions CARB has had to make in implementing legislation that requires economy wide limitations on greenhouse gases.”

Also writing on the CalWatchDog site, Chriss Street envisions a sea shift in regulatory activism well beyond AB32.

Every businessperson in California knows these stunning court rejections are the kiss of death for the fanatical environmental movement. These pro-business rulings are coming from the same courts that eco-warrior extremists have swamped with legal challenges and prevented the construction of any new dam on running water, widening the state aqueduct, or building of new oil refineries since Ronald Reagan was governor of California 40 years ago. For the last two years, environmental litigation resulted in an embargo on one third of all water deliveries to California’s Central Valley; causing agricultural losses of tens of thousands of jobs and hundreds of millions in crops.

The Judge’s Ruling: Other Considerations

The ruling is not about the science of global warming but procedure and process–and apparently CARB isn’t even getting that right. The ruling basically states that CARB was deficient in evaluating “alternatives.” This is especially ironic given that inadequate “alternatives” analysis has held up many a private-sector project seeking regulatory permits to be built.

Often as the permit approvals move along, new information comes to light that requires re-analysis or even starting over–often described by applicants as sort of regulatory purgatory. It has spelled the death of numerous projects.

One major “justification” of CARB’s Scoping Plan are the claimed economic benefits from the measures, such as energy efficiency mandates. Putting aside for the moment the validity of the original analysis, the impact of recent developments in natural gas technology (e.g. fracking in the Marcellus Shale) on dramatic reductions in forecasted natural gas prices by EIA call into question whether CARB’s economic analysis of their energy efficiency measures is still valid (if it ever was).

The same is true for the faux-analysis of Cap and Trade. Since the CARB’s analysis was done, significant new natural gas resources have been identified and are being developed, increasing domestic resources by up to 40 percent, and driving down forecasted natural gas prices.

Lower future natural gas prices are reflected in the U.S. Energy Information Administration’s 2010 Annual Energy Outlook. CARB has never answered the fundamental question of why their economic analysis is so out of line with everybody else’s on the question of cap-and-trade impacts, nor even the impact of dramatic lower future energy prices.

Foregone Alternatives to Cap-and-Trade

Equally, if not more important, to the procedural requirements laid out in CEQA, AB32, and the Judges Decision, is that alternative techniques for capturing those efficiency improvement were not fully considered. IF consumers can actually save untold millions (well CARB actually said how many millions they thought would be saved) by implementing efficiency measures, why did the agency decide on regulations and mandates rather than proposing to print a consumer catalog?

CARB could easily rely on free market and rational behavior on the part of consumers to save themselves cash, and also saving the State the cost of enforcement. Tellingly, CARB’s adamant reliance on regulations and standards says more about their perception of the people they serve than their commitment to climate management.

Not only was the alternatives analysis done by CARB deficient, it was done backwards. The various analysis done by CARB were essentially done after the measures like Cap and Trade were selected as the preferred approach, something alluded to by the Judge in his “fait accompli” remark.

The analyses were fraudulently used to justify the measures’ selection rather than to inform the selection and design of measures. They likely would have found less costly, more effective and less intrusive ways to accomplish their goals had they done things in the right order. They might actually gain the respect of environmental groups and businesses alike for doing so, and finally turn around decades of poor public perception.

This is a teachable moment for CARB. It could also further highlight the complexity–and futility–of regulating GHG emissions in the quixotic quest to ‘stabilize climate’.