Battle escalates over Calif.’s low-carbon standard

Source: Debra Kahn, E&E reporter • Posted: Thursday, June 21, 2012

Sparring over the fate of California’s low-carbon fuel standard continues in and out of court with a coalition of state attorneys general joining the fray on California’s side.

Oregon Attorney General John Kroger (D) filed an amicus brief in the 9th U.S. Circuit Court of Appeals, accompanied by the attorneys general of Maryland, Massachusetts, New York, Rhode Island, Vermont and Washington. Oregon Gov. John Kitzhaber (D) in April directed the state environmental quality department to write low-carbon fuel standard regulations by the end of the year; the complaint also cites the Northeastern states’ consideration of a low-carbon fuels policy.

California’s program is currently on appeal, following a December 2011 decision by U.S. District Court Judge Lawrence O’Neill in Fresno that the program violates the Constitution’s commerce clause, which prohibits states from discriminating against interstate trade. The regulation assigns carbon scores to each type of fuel, and most ethanol from the Midwest has a higher score than California-produced ethanol, in part because it is transported over greater distances and uses different electricity sources. The state received permission in April to continue implementing the program while it appeals the decision.

Kroger argued that federal inaction on climate change necessitates state policies. “The federal government has been slow to confront climate change,” he wrote, citing the 2007 Supreme Court case Massachusetts v. U.S. EPA that established carbon dioxide as a pollutant under the Clean Air Act. “As a result, it has fallen to the states to take the lead.”

Seven other attorneys general representing Midwestern states joined the plaintiffs’ side in March (ClimateWire, March 21).

Meanwhile, refiners and state regulators traded barbs over the program at an industry conference in Sacramento yesterday. The Western States Petroleum Association released a report on the economic effects of California’s climate policies that estimated the low-carbon fuel standard would cost the state $4.4 billion in tax revenue per year by 2020 and force up to eight of the state’s 14 refineries to close.

Regulators in turn criticized the study. “I feel like these studies are not contributing to the process in a constructive way,” said Dan Sperling, a California Air Resources Board member and head of the Institute for Transportation Studies at the University of California, Davis.

Other experts said it would be more productive to focus on policies to reduce the cost of alternative fuels and vehicles, which are still too expensive for most consumers without subsidies. “There’s really no point in California alone reducing its carbon emissions,” said Severin Borenstein, co-director of University of California, Berkeley’s Energy Institute. “Whatever we’re going to do is not going to be very valuable if it’s not exportable.”