The California First Appellate District Court of Appeal affirmed a trial court ruling that the “Climate Change Scoping Plan” adopted by the California Air Resources Board (“ARB”) in 2009 complied with the requirements of the Global Warming Solutions Act of 2006 (“AB 32”). (Association of Irritated Residents v. California Air Resources Board (2012) 206 Cal.App.4th 1487).
The Association of Irritated Residents, several other nonprofit organizations and individuals (collectively, “AIR”) challenged the Scoping Plan claiming, among other things, that the Scoping Plan failed to achieve the maximum technologically feasible and cost-effective reductions in greenhouse gas emissions and also failed to require emissions reduction measures for significant sources of emissions.
Assembly Bill 32 (Global Warming Solutions Act of 2006, Health & Saf. Code § 38500 et seq.) (“AB 32”) declared global warming a “serious threat to the economic well-being, public health, natural resources, and the environment of California.” AB 32 charged the ARB with monitoring and regulating the sources of emissions of greenhouse gases that cause global warming. The mandate central to the legislation was that by January 1, 2009, ARB must prepare and approve a scoping plan for achieving the maximum technologically feasible and cost-effective reduction in greenhouse gas emissions from sources or categories of sources of greenhouse gases by 2020 (“Scoping Plan”).
The Scoping Plan would identify and make recommendations on direct emissions reduction measures, alternative compliance mechanisms, market-based compliance mechanisms, and potential monetary and nonmonetary incentives for sources and categories of sources that ARB finds are necessary or desirable to facilitate the achievement of the maximum feasible and cost-effective reductions of greenhouse gas emissions by 2020. Lastly, ARB would be required to evaluate the total potential costs and total potential economic and noneconomic benefits of the Scoping Plan to California’s economy, environment, and public health, using the best available economic models, emissions estimation techniques, and other scientific methods.
Adoption of the Scoping Plan
The process for developing and approving the Scoping Plan in compliance with the statutory mandate involved hundreds of public workshops and community meetings. ARB released a discussion draft of the Scoping Plan followed by public comments, workshops, and community meetings. On May 7, 2009, ARB adopted the final Scoping Plan. The Scoping Plan stated that the emissions reduction measures that it recommended would be developed and put in place by 2012.
In June of 2009, AIR filed a petition for a writ of mandate against ARB alleging that the Scoping Plan did not comply with the mandates of AB 32 and the California Environmental Quality Act (Pub. Resources Code § 21000 et seq.) (“CEQA”). The petition alleged a list of failures to comport with AB 32, specifically asserting that the Scoping Plan’s analysis “act[ed] as a post hoc rationalization for police decisions.” The petition alleged the Functional Equivalent Document (the environmental impact report utilized in connection with a certified regulatory program) (“FED”) did not comply with CEQA, because, among other reasons, it failed to adequately analyze alternatives to the regional cap-and-trade program included in the Scoping Plan.
The trial court entered an order granting in part and denying in part the requested relief. The court held that the Scoping Plan did not violate the requirements of AB 32 in any respect nor had ARB acted arbitrarily or capriciously in selecting the measures included in the Scoping Plan. The trial court did find, however, that the FED failed to adequately analyze alternatives to the cap-and-trade program, and therefore the ARB had improperly approved the Scoping Plan. Following this ruling, ARB promptly appealed and AIR cross-appealed. While the appeal was pending, ARB prepared a supplement to the FED. On August 24, 2011, ARB certified the FED and re-adopted the Scoping Plan. ARB’s appeal was dismissed. What remained before the court was AIR’s cross-appeal.
The Court of Appeal Decision
The appellate court unanimously held that the ARB did not act arbitrarily or capriciously in approving the Scoping Plan. The appellate court considered whether ARB violated AB 32 by (1) limiting the scoping plan measures to only those necessary to achieve the minimum reduction required by AB 32; (2) failing to create and apply a standard criteria for cost-effectiveness; and (3) failing to include feasible and cost-effective direct regulations from the agricultural and industrial sectors in the Scoping Plan.
AIR first contended that ARB violated AB 32 by failing to design the Scoping Plan to achieve the maximum technologically feasible and cost effective reductions in greenhouse gas emissions. The court disagreed, explaining that the goal the plan sets for 2020 is “but a step towards achieving a longer-term climate goal” and full implementation of the Scoping Plan will put California on a “path toward these required long-term reductions.” The court asserted that even if other measures might conceivably result in greater reductions, AB 32 calls for maximum reductions that are both feasible and cost-effective, and the record reflects that ARB went to exceptional lengths to obtain informed and scholarly input on the issues. After reviewing the ARB’s consideration and analysis of alternative options, the court deferred to the expertise of the ARB noting, “it is not for the court to re-evaluate ARB’s judgment call.”
AIR next asserted ARB failed to create and apply standard criteria for cost-effectiveness by which to evaluate alternative measures. The court rejected this claim, noting cost-effectiveness is not easily measured. The court explained that the record demonstrated that extensive consideration had been given to establishing a methodology for evaluating cost-effectiveness. The court was satisfied by the administrative record showing ARB solicited and obtained input from industry, academia, environmental organizations, and members of the general public. The court acknowledged the areas of uncertainty, but held that ARB was neither arbitrary nor irrational in its recommendations.
Finally, AIR contended that the Scoping Plan failed to “assess” available control measures in the agricultural sector and failed to include them in the Scoping Plan so as to maximize reductions. The court rejected this contention, pointing to the record reflecting thorough analysis of numerous potential measures in the agricultural sector.
In sum, the court acknowledged the ambitious nature of the Governor and Legislature’s goals of reducing the level of greenhouse gas emissions in California and doing so by the means that are feasible and most cost-effective. The court viewed the Scoping Plan as an “initial step” to be followed up by adoption of regulations and plan modifications as research clarifies currently uncertain areas. The court stated, “[it] is hardly surprising that the Scoping Plan leaves some questions unanswered and that opinion differ as to the many complex issues inherent in the task,” but found the measures ARB recommended reflect sound judgment on the basis of substantial evidence.
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