April 25, 2011 / 9:11 PM / 9 years ago

Calif. judge has carbon market choice: Point Carbon

WASHINGTON (Reuters) - Plaintiffs in a case targeting California’s planned greenhouse gases market on Monday offered a judge a choice of plans to redress failings by the state in rolling out its plan.

The court could either put on hold the so-called cap-and-trade market or take the much broader step of halting implementation of the state’s full global warming law, including fuel standards and other programs.

Last month, San Francisco Superior Court Judge Ernest Goldsmith said the California Air Resources Board, the agency designing the state’s cap-and-trade scheme, failed to adequately study policy alternatives to creating a carbon market.

Goldsmith said the court must “enjoin any further rulemaking” until the board completes a new analysis, and asked the plaintiffs in the case, known as the Association of Irritated Residents, to provide a draft order.

Trading in the future cap-and-trade system, which is scheduled to begin officially in 2012, has been limited so far because of fears that the legal proceedings will delay its start.

The cap-and-trade plan would let power plants and factories trade rights to pollute in order to let market forces find the cheapest way to meet a systemwide limit on greenhouse gas emissions. California is making the audacious move after the failure of the U.S. Congress to pass a similar law.

In their comments submitted on Monday to the court, attorneys for the plaintiffs, who fear the greenhouse gas market could cut air quality in their parts of the state while others benefited, offered two paths for going forward.

The first option is for the court to stop implementation of all measures related to the AB 32 law, which mandates that the state reduce its greenhouse gas emissions to 1990 levels by 2020 through a number of measures, including carbon trading.

The planned cap-and-trade program would only account for about 20 per cent of the state’s greenhouse gas cuts by 2020.

The second option would be to only stop further implementation and development of the cap-and-trade program while the analysis is completed, an approach Adrienne Bloch, an attorney for the plaintiffs, said was preferred.

He said his clients are supportive of efforts to reduce the state’s greenhouse gas emissions, but argued that cap-and-trade gives polluters the flexibility to keep their dirtiest plants open and that those plants tend to be located in poorer communities.

“Our goal is to strengthen AB 32,” he said. “We’re not trying to bring everything to a screeching halt or be dramatic.”

Bloch said he expects a final ruling from the judge “soon”.

Air Resources Board officials have said they will appeal the court’s decision.

Reporting by Rory Carroll at Point Carbon, editing by Peter Henderson

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