GHG Advisory Services - State, Regional & International

 Late last night, CARB released 274 pages of proposed rule changes for its pending cap and trade regulation. In conjunction with proposed rule changes, CARB also released specifics on allocation of carbon allowances to electrical distribution utilities and more detail on allowance allocation benchmarking for industrial sectors.

Following yesterday's public statement by CARB Chairman Mary Nichols, CantorCO2e has clarified her comments with senior executives at CARB. Through those discussions with CARB staff, we offer the following take aways from yesterday’s statement by Chairman Nichols:

• The most significant change is excusing sources from the need to secure and retire allowances or offsets to account for their 2012 emissions
  
• No 2012 carbon allowances will be issued
  
• Facilities will have the same emissions reduction obligation as before by 2014
  
• CARB has yet to determine the number of auctions that will be held in 2012
  
• 2012 auctions will auction future vintage allowances
  
• CARB will issue a statement next week (perhaps Thursday) that clarifies and answers many of these items…and addresses others as well
  
  

In an emailed statement issued by CARB late tonight to clarify Nichol’s testimony, CARB spokes person Stanley Young stated: “ ARB will be initiating all elements of the cap and trade program throughout 2012, including establishing the market infrastructure, developing market oversight mechanisms,conducting trainings, holding auctions and developing linkages with partners in the Western Climate Initiative. This will ensure that we have tested the program prior to moving into the first year of compliance.  The only change is shifting the first compliance obligation to 2013.”

The California Courts of Appeal (CA) has formally allowed the California Air Resources Board (CARB) to continue implementing its economy-wide cap and trade program while it reviews the agency’s appeal of the order issued by the lower California Superior Court to stop work on the cap and trade program. When CARB first filled its appeal of the lower court decision two weeks ago, that action triggered an automatic stay by the higher court of the lower court’s decision.  The higher court affirmed that stay, giving the parties until June 20^th to object to the decision.

Today the California Air Resources Board (CARB) issued its revised CEQA alternatives analysis, called a “functional equivalent document” (FED), required by the recent San Francisco Superior Court Decision. CARB’s board will vote on the FED on August 24 after a public review period. While the lower court’s demand for a revised FED has been temporarily stayed, CARB is taking a “two pronged strategy” of preparing a revised FED while appealing the lower court’s decision.

As part of its rapid gear up to achieve a January 1, 2012 start date for Cap and Trade, CARB convened a teleconference recently to preview its proposed “15-day rule changes” for its cap and trade program as it races forward to its planned launch date in six months.  CARB previewed such controversial issues as offset “buyer liability” and recognizing early action.

A California natural gas-fired power plant in California’s San Joaquin Valley has been exempted by the EPA from its newly-established GHG emission regulations, commonly known as the “Greenhouse Gas Tailoring Rule.” EPA has decided to grandfather a small number of power plant projects across the country that were caught halfway through their permitting process by the new rules for GHGs, NOx and SO2.

The Supreme Court of Virginia will decide on whether insurers must pay for damages due to climate change in the case AES Corp. v. Steadfast Insurance Co.

Our Children’s Trust, an environmental group based in Oregon, has launched petitions for government action on climate change in all 50 states.  The unconventional legal approach has gained traction in some states.

On the heels of his withdrawal from RGGI, Governor Christie announced that New Jersey would formally establish the 2021 Renewable Portfolio Standard (RPS) target at 22.5%.  Christie was criticized for dropping the 2021 from 30% to 22.5%, but the 30% goal was never in law or regulation.  It was simply a proposal in the state’s last Energy Master Plan.  The actual RPS goal always called for 22.5% by 2021.

The U.S. Supreme Court has started issuing decisions on the cases it heard during this year's session and will likely issue its decision on the landmark GHG nuisance lawsuit in three weeks.  The case, American Electric Power v. Connecticut,” had states and land trusts sued major power plant companies to reduce their greenhouse gas emissions.

On June 6, the EPA sent its final tailpipe rule to establish greenhouse gas emissions limits for medium- and heavy-duty trucks to the White House Office of Management and Budget.  This first-of-its-kind rule builds upon the automobile and light duty truck GHG rule that EPA finalized last year.

The U.S. Department of Agriculture issued $7.4million in grants to fund nine large-scale greenhouse gas mitigation projects in24 states through U.S. Department of Agriculture's Conservation Innovation Grants (CIG).   USDA’s program is intended to test and verify GHG reduction methods and to measure how much farmers and landowners could earn in emission-reduction credits.

Following the expected withdrawal by New Jersey Governor Chris Christie (R) from the Regional Greenhouse Gas Initiative (RGGI), the New Jersey Legislature is evaluating ways to override the Governor’s decision.  In the mean time, the New Hampshire Legislature votes to depart while the Governor threatens a veto. 

In an expected move, beginning January 1, 2013, the European Union Emissions Trading Scheme (EU ETS) will no longer accept N2O or ODS credits which make up over 70% of CERs issued in the ETS and over 25% of ERUs issued.

This afternoon the California Superior Court of San Francisco, issued its long awaited decision on a challenge to the state’s Cap and Trade Rule. The decision is so recent, legal experts are still analyzing its impact. The judge’s final decision, or “Writ of Mandate,” was not as harsh as the draft released two months ago by the court.  In contrast, the judge’s final decision focused only on cap and trade and procedural aspects, not the larger greenhouse gas program as originally proposed in the draft decision. Legal experts viewed the draft decision as an administrative speed bump, but not a significant barrier for the state to move forward with cap and trade on time. We have a synopsis of the decision and a preliminary assessment.