Wake up daily to our latest coverage of business done better, directly in your inbox.


Get your weekly dose of analysis on rising corporate activism.


The best of solutions journalism in the sustainability space, published monthly.

Select Newsletter

By signing up you agree to our privacy policy. You can opt out anytime.

Jan Lee headshot

California's New Climate Program Steams Ahead Despite Likely Legal Challenges

By Jan Lee

Less than an hour after Donald J. Trump was sworn into office on Friday, the state of California announced its latest plans to fight climate change.

While the California Air Resources Board (CARB) insisted that the timing of the announcement was coincidental, it was clear the agency has no plans to wait out the Trump administration’s decision on whether to address the effects of global warming.

The proposed plan, which is expected to be finalized by April,  includes reducing California’s greenhouse gas emissions to 30 percent below 1990 levels by 2030. It’s the most ambitious GHG target yet set in North America, topping Canada’s aim of 30 percent below 2005 levels by 2030.

The state’s multi-pronged approach includes extending its cap-and-trade program another 13 years and requiring oil refineries to cut their emissions by 20 percent. It also calls for an 18 percent cut in carbon-intense transportation fuels and pushes for more zero-emission vehicles on California’s highways.

“The analysis in the plan finds that cap-and-trade is the lowest cost, most efficient policy approach and provides certainty that the state will meet the 2030 goals even if other measures fall short,” CARB stated. “To date, a total of $3.4 billion in cap-and-trade funds have been appropriated for the California Climate Investments program.”

CARB’s plan dovetails with the California Global Warming Solutions Act of 2006 and Gov. Jerry Brown’s 2016 executive order calling for a 40 percent cut in GHGs by 2030. But it also calls for a more comprehensive approach when it comes to ensuring that the state addresses climate adaptation.

The executive order requires the adaptation plans be updated regularly and sets methods for measuring how well the state is actually succeeding in its adaptation goals, such as infrastructure planning by regional and local governments.

California climate policies vs. Trump administration goals

What California’s new attack on climate change doesn’t yet outline is how it will address the incoming federal administration’s claim that it can overrule the state’s plan to set more stringent emission requirements than the feds.

On Wednesday, Scott Pruitt, who Trump has nominated to head the Environmental Protection Agency, declined to say that California would be permitted a federal waiver to set such limits.

“Administrators in the past have not granted the waiver and have granted the waiver. That is a review process that will be conducted,” Pruitt said in his Senate confirmation hearing.

Nor does the plan spell out how California will address another challenge that some critics say could be more threatening to its innovative cap-and-trade program: legal challenges by the California Chamber of Commerce and private businesses that question the program's financial structure.

In 2013, the chamber sued CARB in Sacramento County Court -- questioning the Air Resources Board's right to auction off a portion of the allowances. The chamber argued there was a lack of statutory authority to implement the cap-and-trade program in this manner.

The court upheld CARB's authority. The National Association of Manufacturers intervened a year later, and the chamber appealed the court's ruling. They argued that the structure was generating revenue "over and above the regulatory fees separately authorized to implement and enforce the law," and that doing so was outside of the agency's stated responsibility.

The state is expected to argue its case this week, with an appeals decision set to arrive later this year. The chamber stated that its issue isn't with the implementation of a cap-and-trade program, but with the manner in which the revenue is being handled.

Nevertheless, losing the case could be devastating to the state's effort to fund its comprehensive climate change battle.

“If that happens, we could lose an entire stream of revenue to make our communities more sustainable,” said California Sen. Kevin de Leon, a Democrat representing District 24 in Los Angeles.

But some analysts say the possibility of losing the case isn't the only thing California has to worry about when it comes to the future of this program.

Cap-and-trade credit sales are actually down, leaving supporters concerned that the uncertainty of the ruling and the anti-clean energy mood in Washington could make the program a poor investment.

And that could be why the state has stepped up to the plate now with details of a plan that clearly benefits from a robust and successful cap-and-trade structure.

With comment period now open to the public, the state is staying true to Gov. Brown's vow to fight against climate change, as well as to ensure that the progress that has been made on other scientific fronts won't be lost to haggling in Washington -- or to court battles in Sacramento.

Image credit: Flickr/Wonderlane

Jan Lee headshot

Jan Lee is a former news editor and award-winning editorial writer whose non-fiction and fiction have been published in the U.S., Canada, Mexico, the U.K. and Australia. Her articles and posts can be found on TriplePundit, JustMeans, and her blog, The Multicultural Jew, as well as other publications. She currently splits her residence between the city of Vancouver, British Columbia and the rural farmlands of Idaho.

Read more stories by Jan Lee