In a potentially far-reaching move, a San Francisco Superior
Court judge has ruled that the California Air Resources Board
failed to conduct an adequate environmental impact review before it
adopted the State's AB 32 Scoping Plan in December 2008. This
plan sets forth the Board's basic outline of actions to reduce
California's greenhouse gas emissions. The court issued a
proposed order which would enjoin "any implementation of the
Scoping Plan" until the Board complies with the California
Environmental Quality Act (CEQA).
The lawsuit was filed by a number of environmental justice groups
challenging the Scoping Plan as failing to comply with the
substantive mandates of AB 32, the Global Warming Solutions Act of
2006, and the impact review and procedural requirements of CEQA.
The court issued a proposed decision on January 21 in which it
rejected all of the substantive legal challenges to the Scoping
Plan under AB 32, holding that the Board did not act arbitrarily
and capriciously in adopting the Plan. Thus the court denied the
environmental groups' request for an order rejecting the plan
as inconsistent with AB 32.
The environmental groups were successful, however, in arguing that
the Board did not comply with CEQA in its environmental review for
the Plan, and in the adoption of the Plan itself. Like many
environmental regulatory agencies, the Board's actions were
part of a "certified regulatory program" which allows the
preparation of a "functional equivalent" documents under
CEQA instead of preparing environmental impact reports or negative
declarations. Generally, these functional equivalent documents must
include analysis that largely duplicates an EIR, although the
agency is not formally subject to the requirement to prepare an
EIR.
Among other things, a "functional equivalent" document
must include an analysis of alternatives to the project. The
environmental groups argued that the Board violated CEQA in three
ways. They claimed that the Board failed to adequately evaluate
alternatives to the adopted plan, that the impact analysis was too
generalized, and that the Board improperly adopted the Scoping Plan
before the environmental impact review had been completed.
The court agreed with the environmental groups on two of their
three arguments. First, the court ruled that the analysis of
alternatives failed to include a sufficient factual explanation
justifying the Board's adoption of the Scoping Plan over
several other alternatives, including an alternative that would
rely on a carbon fee to reduce emissions. The court specifically
found that the Board had tried to proceed with cap and trade as a
fait accompli without sufficient evaluation of
alternatives. Second, the court found that the Board acted
prematurely. When the Board adopted the Scoping Plan in December
2008, it had not yet finished preparing the responses to comments
on the "functional equivalent" document. Finally, the
court rejected the environmental groups' claim that the impact
analysis was too general and did not evaluate the impacts of
potential biofuel facilities in sufficient detail. Relying on CEQA
cases that have upheld a generalized analysis when an agency is
adopting a program-level document, the court found that the general
level of detail in the Board's analysis was sufficient.
Although the court's ruling is a proposed decision, the
potential implications of the decision are profound. The
court's order may change in response to comments or objections
from the parties, but at a minimum, it likely will slow
California's efforts to adopt a cap and trade program. The
proposed decision also contemplates issuance of a broad writ of
mandate, which would direct the Board to halt "any
implementation" of the Scoping Plan until the Board complies
with CEQA. This could affect not only the Board's December 2010
decision to proceed with a cap and trade program, but the
implementation of many other measures as well. [Association of
Irritated Residents et al v. California Air Resources Board, San
Francisco Superior Court Case No. CPF-09-509562.]
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