New Ruling Puts California’s Cap and Trade on Permanent Hold

San Francisco, May 23 – 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] are 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 sixty-eight 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 center piece 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% 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 and indigenous 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.

It is unknown whether his administration is aware of the lawsuit, which has now effectively put an end to the promise of funds from California in the foreseeable future.

In a May 17 article in Mexican daily La Jornada, Sabines elaborated on the REDD+ program: “We made an agreement with California, the most polluting state in the world. The objective of the polluting governments is to clean their consciences by paying for carbon credits under REDD+.”

Sabines told La Jornada that a forest inventory is being prepared with the participation of the environmental organization Conservation International, and that inhabitants of the jungle will be trained to participate in this inventory, to define “how many trees there are and how many tons of Greenhouse Gases they can capture.” The Lacandon jungle, along with the Amazon, are the areas of the Americas that capture the most Greenhouse gases; therefore, said Sabines, “the international resources will go directly to the communities.”

In February of this year – three months after signing the MOU with Schwarzenegger – Governor Sabines began distributing payments of 2000 pesos a month to members of the Lacandon Community (as reported here). The payments, Governor Sabines said at the time, were “to allow the completion of the forest inventory so that [members of the Lacandon Community] can access federal and international funds, as well as complement these funds with projects such as agricultural conversion outside the Reserve with species such as oil palm and rubber.”

“You conserve the earth, and I pay you to conserve it,” Sabines told the recipients of the first REDD + payments. “I don’t buy the land; I commit you to conserving it.”

La Jornada reported last week, that “the 2000 pesos a month [per land-owner within the designated Lacandon Community] come from a tax on vehicle registration, because, as of yet, California is not able to put up the money.”

“Our goal,” Governor Sabines told La Jornada, “is that the entirety of the surface of Chiapas will enter into the market for carbon credits and methane credits, beginning through agreements with polluting sub-national states, like California.”

Last Friday’s writ on AB32, however, prevents any such agreement from going forward. What this means for the Chiapas state government and its plans to put the entirety of its forests into sub-national carbon markets remains to be seen. With no money forthcoming from California,  it is unclear how, and whether, the governor of Chiapas will be able to continue paying the Lacandon Community.

Late on Friday afternoon, as Newell celebrated CRPE’s court victory in his San Francisco office before heading home to spend the weekend relaxing with his family, I asked him what it was about cap and trade that persuaded him to take on the crusade.

“Poor people are getting screwed on both sides of the transaction,” he said. “Only the polluters are benefitting. It’s just [expletive deleted] wrong.”