The Downey Brand Barometer:
Optimizing Opportunities in
Emerging Greenhouse Gas Regulation
Massachusetts, et al. v. Environmental Protection Agency
In a 5-4 opinion issued on April 2, 2007, the United States Supreme
Court concluded, in Massachusetts, et al. v. Environmental Protection
Agency, that “greenhouse gases fit well within the Clean Air
Act's capacious definition of ‘air pollutant,'” and held that contrary
to the EPA's position, “EPA has the statutory authority to regulate
the emission of such gases from new motor vehicles.” (U.S. Supreme
Court, No. 05-1120, 549 U.S. ____ (2007), Slip Op. at pp. 29-30.)
The matter has been remanded, and it remains to be seen whether
EPA will simply articulate a more detailed explanation for declining
to regulate or begin a rulemaking process to regulate greenhouse
gas emissions from motor vehicles.
The Court's decision has complex implications for California industries.
By establishing that EPA has the authority to regulate greenhouse
gas emissions from motor vehicles, the Court's decision almost certainly
means that the federal Clean Air Act preempts the California legislature's
July 2002 vehicular greenhouse gas emissions bill (AB 1493). As
a result, the status of CARB's September 2004 ordinances implementing
AB 1493 almost certainly depends upon EPA approval of California's
waiver application, which was submitted to EPA in December, 2005.
In the meantime, a variety of climate change-related bills have
been introduced in the United States House of Representatives and
Senate, that, if enacted, would likely result in additional statutory
direction to EPA and other federal agencies regarding the regulation
of greenhouse gases from motor vehicles and stationary sources.
(See, e.g., S. 280, Climate Stewardship and Innovation Act of 2007,
introduced in the Senate Jan. 12, 2007; S. 317, Electric Utility
Cap and Trade Act of 2007, introduced in the Senate Jan. 17, 2007;
H.R. 620, Climate Stewardship Act of 2007, introduced in the House
Jan. 22, 2007; H.R. 1590, Safe Climate Act of 2007, introduced in
the House Mar. 20, 2007.)
2006 Legislation
AB 32 – California's Greenhouse Gas Emissions Cap Legislation
California Assembly Bill 32 (AB 32) legislates a cap on statewide
greenhouse gas emissions equal to 1990 emissions levels. The statute
requires that prior to January 1, 2008, CARB must: (1) identify
the current level of greenhouse gas emissions by requiring statewide
reporting and verification of greenhouse gas emissions from emitters;
and (2) identify the 1990 levels of California greenhouse gas emissions.
Pending these regulations, by June 30, 2007, CARB is to publish
a list of early action greenhouse gas emission reduction measures
and by January 1, 2010 must adopt regulations to implement those
early action measures.
SB 1368 – Greenhouse Gas Emissions Standards for Electricity
Used in California
California Senate Bill 1368 (SB 1368) required the California Energy
Commission and the California Public Utilities Commission in consultation
with CARB, to set performance standards for climate change pollutant
emissions resulting from electric generation for long-term procurement
by investor owned and local publicly-owned utilities. On January
25, 2007, the CPUC adopted an interim greenhouse gas emission performance
standard of 1,100 pounds of CO2 per megawatt-hour for new long-term
baseload generation commitments. The California Energy Commission
regulations are pending review by the Office of Administrative Law
but contain the same emission performance standard.
SB 107 – Renewable Energy
California Senate Bill 107 (SB 107) required investor-owned utilities
to have twenty percent renewable energy sources in their portfolios
by 2010.
SB 1505 – Hydrogen Vehicles
California Senate Bill 1505 (SB 1505) required CARB to adopt regulations
regarding the production and direct use of hydrogen fuels for motor
vehicles to reduce greenhouse gas emissions, criteria air pollutant
emissions, and toxic air contaminant emissions, and to recommend
incentives for hydrogen fuel industry development.
Earlier Legislation and Executive Order S-3-05
AB 1493 – Vehicular Greenhouse Gas Emissions Legislation
In July 2002, the California legislature passed a vehicular greenhouse
gas emissions bill (AB 1493). As result of AB 1493, CARB adopted
standards in September 2004 to reduce greenhouse gas emissions from
passenger cars, light duty trucks, and other non-commercial motor
vehicles. These regulations are the subject of ongoing state and
federal litigation claiming, among other things, that the regulations
are preempted by federal law. The State lawsuit is pending in Fresno
County Superior Court. Several components of the federal lawsuit
were on hold pending the outcome in the U.S. Supreme Court case
Massachusetts v. EPA discussed above, and have not yet
been fully resolved. The preemption question appears to be settled,
however, as the U.S. District Court concluded in Central Valley
Chrysler-Jeep Inc. v. Witherspoon (U.S. District Ct., Eastern
Dist. CA 2007) 2007 WL 135688, that the AB 1493 regulatory program
is preempted by the Clean Air Act. The court explained that “since
the only entrée for states into the preempted field of regulation
of emissions from on-road motor vehicles is through the [U.S. EPA]
waiver provision . . . California[] may only regulate to the extent
EPA grants a waiver of preemption.”The court observed that EPA can
only grant a waiver if it has jurisdiction to regulate. The Supreme
Court's opinion in Massachusetts v. EPA indicates that
EPA does have jurisdiction to regulate greenhouse gases, and thus,
under the logic of Central Valley Chrysler-Jeep, if EPA
so chooses, it also has the ability to grant a waiver to California
for the regulation of greenhouse gases from motor vehicles. Thus,
the fate of the AB 1493 regulations is now contingent upon EPA approval
of California's waiver application, which was submitted to EPA in
December, 2005, and final resolution of the state and federal litigation.
Executive Order S-3-05 – Greenhouse Gas Emission Reduction
Targets
On June 1, 2005, Governor Schwarzenegger issued Executive Order
S-3-05. This executive order established the following California
greenhouse gas emission reduction targets: (1) by 2010, reduce GHG
emissions to 2000 levels; (2) by 2020, reduce GHG emissions to 1990
levels; and (3) by 2050, reduce GHG emissions to 80 percent below
1990 levels. The Executive Order also requires the Secretary of
CalEPA to oversee efforts to meet these targets, to report to the
Governor and the Legislature regarding the extent of global warming
impacts to California, and to prepare plans to mitigate those impacts.
Pending Litigation
CBD v. City of Banning (Riverside County Superior Court) –
Must a City Analyze Greenhouse Gas Emissions of Residential Development?
In August 2006, the Center for Biological Diversity challenged
a decision by the City of Banning to approve the SunCal Companies'
“Black Bench” development (approximately 1,400 homes on 1,488 acres),
alleging, among other things, that the City violated CEQA by failing
to disclose and evaluate the project's greenhouse gas emissions
and the environmental impact of those emissions.Center for Biological
Diversity v. City of Banning (Riverside County Superior Court
No. 460967).
NRDC v. Reclamation Board (Sacramento County Superior Court)
– Must the Reclamation Board Identify Changes in Project Impacts
that Could Result from the Projected Effects of Climate Change?
In Natural Resources Defense Council v. Reclamation Board (Sac.
Superior Court, No. 06CS01228), also filed in August 2006,
the Natural Resources Defense Council, the California Sportfishing
Protection Alliance, Deltakeeper, and the Natural Heritage Institute
challenged a decision by California's Reclamation Board to approve
fill and encroachment permits for a development in California's
Sacramento San Joaquin Bay Delta. In its CEQA-based lawsuit, petitioners
alleged that data made available after certification of the project's
EIR indicate that the impacts of climate change in the Delta “will
change the impacts of the project.” Because the Reclamation Board
approved permits for the developer without considering these changed
circumstances, alleges the complaint, the Reclamation Board has
violated CEQA.
