Communities for a Better Environment (CBE), a California environmental health and justice organization, filed a petition for writ of mandate against the California Air Resources Board (CARB) and its Executive Officer in California Superior Court. CBE alleged that CARB’s May 29, 2026 approval of amendments to the State’s Cap-and-Invest program (formerly Cap-and-Trade) violated the California Environmental Quality Act (CEQA).  Adopted in 2011, California’s Cap-and-Invest program aimed to reduce greenhouse gas emissions by imposing annual aggregate emissions limitations on large industrial facilities. CBE alleged that changes made to the January 2026 proposal in April 2026 (the “15-Day Changes”) would undermine California’s greenhouse gas reduction targets and divert revenue from greenhouse gas-reducing projects and ratepayer assistance funded by Cap-and-Invest auction proceeds. CBE focused particularly on the new “Manufacturing Decarbonization Incentive” (MDI), which grants free emissions allowances to industrial facilities for investments in biofuels, hydrogen, carbon capture, and related infrastructure. CBE argued that the 15-Day Changes’ increased allowances available for the MDI “fundamentally altered” the program without corresponding revisions to the environmental review or an opportunity for meaningful public comment. CBE further alleged that the Final Environmental Impact Assessment (EIA), posted only two days before CARB’s vote, failed to analyze the environmental, air quality, and cumulative impacts of the 15-Day Changes. CBE also alleged that the Final EIA lacked an adequate project description and baseline (including because it failed to disclose increasing impacts of climate change and air pollution), improperly rejected consideration of more stringent alternatives, gave conclusory responses to public comments, and rested on an unsupported statement of overriding considerations. CBE asked the court to set aside CARB’s approval of the amendments, certification of the Final EIA, and adoption of related findings; to enjoin implementation of the amendments pending CEQA compliance; and for a declaratory judgment that CARB’s actions violated CEQA; and for costs and attorneys’ fees.

Lawsuit asserting that the California Air Resources Board failed to comply with the California Environmental Quality Act when it approved amendments to the Cap-and-Invest program

Communities for a Better Environment v. California Air Resources Board

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California Organization Alleged CEQA Violations in Approval of Cap-and-Invest Amendments

Filed

United States of America

California

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

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A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Justice is the ethical and political framework that addresses fairness, including issues of responsibility, rights, and structural inequity.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

People who are less able to respond to the effects of climate change due to having limited financial or physical assets

A subsidy is a direct or indirect payment to individuals or businesses, typically provided as a government cash payment or a specific tax reduction.

Tradable permits are market-based tools that grant permission for specific activities, frequently used to regulate emissions. These permits can be issued within a trading system to manage environmental impacts.

Codes and standards are regulatory instruments that specify minimum standards to protect health and safety. This ranges from performance standards, which prescribe outcomes while allowing flexibility to achieve compliance, to the more prescriptive approach of technology-specific standards.

A target to reduce the prevalence of a greenhouse gas over a specific time frame

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Either money or something of monetary value is transferred between two or more organisations, people or countries.

Actions or measures to adapt terrestrial systems to climate change.

Hot temperature extremes are daily maximum temperatures  that were exceeded on average once in a decade or once in 50 years, and includes heatwaves.

The release of heat-trapping gases, primarily from human activities such as burning fossil fuels, agriculture and industry.

A long-lived, colourless gas, chiefly emitted from fossil fuel combustion, deforestation and cement production.

A potent, short-lived greehouse gas, largely released from livestock, fossil fuel extraction and waste management.

Extreme weather refers to events where a weather variable exceeds (or falls below) a threshold. Meaning it is significantly different from the average or usual weather pattern.

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Social inclusion is the process of improving the terms on which individuals and groups take part in society—improving the ability, opportunity, and dignity of those disadvantaged on the basis of their identity.

Oil is a combustible liquid fossil fuel composed mainly of hydrocarbons, occurring as crude oil and refined into petroleum products such as petrol, diesel and kerosene.

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Activities that relate to the production of goods and services from forests.

Climate change can have a range of impacts on technological system. Extreme weather events can cause infrastructure failures like power outages or damage to roads and bridges, as well as the impacts from waste following natural disasters. Human activities also cause technological impacts, such as the risks posed by oil spillage and leaks.

Slow onset events evolve gradually from incremental changes over many years or from increased frequency or intensity of recurring events. As defined in the Cancun Adaptation Framework (2010), slow onset events include risks and impacts from rising temperatures, desertification, biodiversity loss, land and forest degradation, glacial retreat, ocean acidification, sea level rise, and salinization.

California Organization Alleged CEQA Violations in Approval of Cap-and-Invest Amendments

Target

Policy instrument

Risk

Impacted group

Just transition

Renewable energy

Fossil fuel

Greenhouse gas

Economic sector

Adaptation/resilience

Finance