Environmental Regulation

In a 2-1 decision, the Court of Appeal upheld the California Air Resources Board’s cap-and-trade program for greenhouse gas allowances. California Chamber of Commerce v. State Air Resources Board,  No. C075954 (3rd Dist., April 6, 2017). In upholding the validity of the auction used by the California Air Resources Board to distribute a portion of the greenhouse gas allowances auction, the opinion created an important new test for assessing whether the auction should be considered a tax. The majority found that the allowance auction was not compulsory and provided a valuable commodity to the purchaser, and thus was not a tax requiring supermajority approval under Proposition 13.

Background on CARB’s GHG Cap-and-Trade Program

In 2006, California enacted AB 32 with the goal of reducing greenhouse gas (GHG) emissions to 1990 levels by the year 2020. The California Air Resources Board (CARB) is the designated state agency charged with regulating sources of GHG emissions under AB 32. AB 32 directed CARB to adopt rules and regulations to achieve the maximum technologically feasible and cost-effective reductions in GHG emissions.

Smoking power plantPursuant to AB 32’s directives, CARB promulgated regulations that created a cap-and-trade-program. The program sets an aggregate emissions “cap” on covered entities and enforces the cap by issuing a limited number of allowances, the total value of which is equal to the cap. Covered entities must demonstrate compliance with the program by surrendering allowances that correspond to that entity’s emissions requirements.

Emissions allowances can be obtained in three ways: 1) Some allowances are distributed by CARB for free; 2) allowances are distributed by CARB through an auction; and 3) allowances can be obtained by trading on the secondary market.

CARB’s allowance auction takes place through a single round of sealed bidding, and winners pay the market clearing price. In 2012, the state legislature passed four bills specifying how the auction proceeds would be used to support the regulatory purposes of AB 32.

Several corporations and industry groups challenged the auction mechanism as exceeding CARB’s statutory authority under AB 32 and as an unconstitutional tax that violated the supermajority requirements of Proposition 13.
Continue Reading Court of Appeal, in split decision, upholds CARB cap-and-trade program

The California Court of Appeal has upheld municipal regulation of telecommunications equipment in the public right-of-way against the argument that such regulations are preempted by state law. T-Mobile West LLC v. City and County of San Francisco, No. A144252 (1st Dist., Sept. 15, 2016).

At issue was a San Francisco ordinance passed in 2011

The significance thresholds for exposure of receptors to harmful air pollution in the Bay Area Air Quality Management District’s CEQA Guidelines cannot provide the basis for requiring an EIR or mitigation measures, when used to measure the impact of existing air pollution on future occupants or users of a project. As a result, the District’s

The Third Appellate District’s opinion in North Coast Rivers Alliance v. A.G. Kawamura (January 4, 2016) has left some practitioners scratching their heads trying to decipher the court’s holdings regarding CEQA requirements for projects that might continue operating past their initial termination date, project objectives, alternatives and cumulative impacts.

The California Department of Food and

Newhall Ranch, a proposed mega-development in Los Angeles County, can’t seem to catch a break: besieged by setbacks since Newhall Land first filed an application to develop the land in 1994, the project has been the subject of over twenty-one public hearings and several law suits over its more than twenty year history. In Center

A federal appellate court has invalidated the U.S. EPA’s approval of a new pesticide, sulfoxaflor, concluding that the agency’s decision was based on “flawed and limited data” and was unsupported by substantial evidence. Pollinator Stewardship Council v. United States Environmental Protection Agency, No. 13-722346 (9th Cir., Sept. 10, 2015). Sulfoxaflor is part of a subclass

The Ninth Circuit Court of Appeals has held that a right-of-way for an access road over Bureau of Land Management (BLM) land to connect a wind project to a state highway did not trigger formal consultation under the Endangered Species Act because the proposed access road would not have significant impacts to the environment. Sierra Club v. Bureau of Land Management, 786 F.3d 1219 (9th Cir. 2015).

North Sky River Energy developed a wind project on 12,000 acres of private land in the Tehachapi area. North Sky applied to the BLM for a right-of-way across federal lands for an access road to connect the wind farm with a state highway. North Sky could have accessed the highway through a private road, but preferred the access road over BLM land because the private road required substantial grading and would have greater environmental impacts. If the BLM had denied North Sky’s application, North Sky could have pursued the private road option.

After reviewing North Sky’s application and evaluating the potential environmental impacts, the BLM issued an Environmental Assessment concluding that the proposed road project would not have significant environmental impacts. Therefore, the BLM concluded that it need not prepare an Environmental Impact Statement or formally consult with the Fish and Wildlife Service under the Endangered Species Act. The BLM’s determination depended in large part on its finding that the private-road option was a viable alternative to the BLM access road project and thus the wind project had independent utility from the BLM access road project. The BLM issued a permit for the BLM access road project.

Project opponents — the Sierra Club, the Center for Biological Diversity, and the Defenders of Wildlife — alleged that the BLM right-of-way violated the Endangered Species Act and the National Environmental Policy Act (NEPA). The primary basis for the project opponents’ arguments was the theory that the environmental impacts of the BLM access road project should have been considered together with those of the wind project. They argued that when the impacts of the wind project and the access road were considered together, there would be significant impacts requiring the preparation of an Environmental Impact Statement and formal consultation under the Endangered Species Act.
Continue Reading The Importance of Independence: The Ninth Circuit Provides Helpful Clarification on Connected Actions in the Energy Project Development Context