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In Blow to Big Polluters, Judge Halts California's Cap and Trade Program

The judge greenlighted most of the policies in California's AB32 except the cap and trade plan, which some argued would benefit polluters at the expense of poor communities.

San Francisco's Center on Race, Poverty and the Environment (CRPE) announced today that it received the judge's writ in its lawsuit against the California Air Resources Board (CARB). The writ gives the green light to most of the policies advanced under AB32, California's Global Warming Solutions Act, but puts a permanent hold on cap and trade.

"Judge Ernest Goldsmith of the San Francisco Superior Court ruled that CARB violated CEQA (the California Environmental Quality Act) when, among other things, it failed to properly consider alternatives to a 'cap and trade' program in its Scoping Plan to implement AB 32," CRPE's statement says. "The Court's Writ, issued Friday, enjoins, or stops, all implementation and actions in furtherance of cap and trade until CARB completes a lawfully adequate CEQA review."

CRPE's Brent Newell, the lead council on the case, called this "the best possible outcome we could have hoped for. The judge essentially gave us the writ exactly as we submitted it."

"[CARB is] enjoined now from doing anything on cap and trade," Newell told me, in a mood that can only be described as giddy, immediately after receiving the news on Friday.

The ruling, Newell said, "allows the good parts of AB32 to go forward."

Beyond its now defunct cap-and-trade provision, AB32 contains 68 other regulations, from motor vehicle fuel standards to renewable energy mandates, aimed at reducing California's greenhouse gases to 1990 levels by 2020.

While cap and trade failed in Congress last year, and the European carbon market has shown itself to be ineffective at actually reducing greenhouse gas emissions, the California Air Resources Board chose in 2008 to make cap and trade -- which CRPE has called "a Wall Street trading scheme" -- the centerpiece of the state's plan to confront global warming, rather than requiring major greenhouse gas sources like refineries, power plants and factories to reduce their emissions.

Bill Gallegos, executive director of Communities for a Better Environment, one of the plaintiffs in the lawsuit, said, "We are encouraged that the judge is now requiring CARB to take a hard and honest look at cap and trade. We have even more evidence now that cap and trade does not work to reduce greenhouse gas emissions. In the European Union, emissions have increased by 3 percent in the past year under their program, and we also know that cap and trade has the worst impact on health in low-income communities and communities of color."

CARB must now look at alternatives to cap and trade; according to Newell, CRPE's position is to push for direct regulations, to cut emissions directly at the source.

A major question hanging in the air upon announcement of the ruling is, what does this mean for California's agreement with Chiapas, Mexico and Acre, Brazil?

Last November, then-Governor Schwarzenegger signed Memoranda of Understanding (MOUs) with both foreign states to begin advancing direct carbon trading mechanisms predicated on the emerging, and highly embattled, forest carbon scheme known as REDD (Reducing Emissions from Deforestation and Degradation), and, in its more comprehensive incarnation which includes protections for biodiversity and accounting of carbon sequestration in soils, as REDD+.

Since late March, when the program in Chiapas began to come under intense scrutiny by local community-based organizations and international environmental rights advocates, the governor of Chiapas, Juan Sabines, has grown increasingly vocal in his promotion of the program. The governor has made several highly publicized visits to communities in the Lacandon Jungle to hand out funds associated with REDD+, but until last week it was unclear where the money was coming from, given that the deal with California was still in the pipeline.