Our Children’s Earth Foundation v. California Air Resources Board

Several citizens’ groups filed a lawsuit against the California Air Resources Board (CARB), alleging that its carbon dioxide offset regulations violated AB 32, otherwise known as the California Global Warming Solutions Act. The lawsuit alleged that the offset protocols allowed non-additional credits to qualify as offsets, that CARB’s definitions for “conservative” and “business-as-usual” had the potential to be interpreted in more than one way, that the regulations themselves were not enforceable, and that the provisions violated AB 32’s integrity standards.

The California Court of Appeal ruled that the offset component of California’s cap-and-trade program for greenhouse gas emissions did not violate the California Global Warming Solutions Act of 2006 (AB 32). Two environmental groups had charged that the offset program did not satisfy AB 32’s additionality requirements, and in particular that the California Air Resources Board (CARB) had not ensured that offset projects’ emission reductions would be “in addition to … any other greenhouse gas emission reduction that otherwise would occur.” The court was not persuaded by “the rather pedantic position” that AB 32 required “unequivocal proof” that an offset project’s emission reduction would not otherwise occur. The court called this interpretation “unworkable” and said that such a requirement would not account “for the fact that is virtually impossible to know what otherwise would have occurred in most cases.” The appellate court instead concluded that AB 32 delegated rulemaking authority to CARB to establish a “workable method of ensuring additionality” and that CARB had not acted arbitrarily or capriciously in formulating the offset protocols. The court also ruled that AB 32 authorized CARB to grant early action credits for offset projects previously undertaken pursuant to Carbon Reserve protocols.