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Entries in cap and trade (2)

Thursday
Mar012012

Carb Wars - Europe the Latest Evil Empire in the Greenhouse Gas Wars?

Litigation Los AngelesEnvironmental Litigation  

Stephen T. Holzer
818.907.3299

 

Just over a decade after the Cold War ended, we may be beginning another highly stressful, albeit less deadly face-off: a Carbon War. 

Highly stressful, because it will probably mean skyrocketing airfares in the near future. This will be bad for both individuals and companies that require travel to do business, international shippers and the businesses that rely on their services, and even the smaller mom-and-pop stores that thrive on the tourism economy.

Not to mention tensions between countries. 

Less deadly, because world Super Powers aren't pointing ballistic missiles at each other—at least not yet. 

Instead, they're levying fees: Unlike California's controversial Cap and Trade System, the European Union enacted a law that makes airline companies pay for greenhouse gas emissions outright. But they're not just taxing their own aircraft's carbon emissions, but all carriers coming into Europe. 

 

European Union Emissions Trading Scheme (EU ETS) Opposition 

 

The European Union has been charging for aircraft emissions since January 1, 2012. Environmental Law Carbon EmissionsIf an airline refuses to pay up, the airline will be fined 100 Euros for each ton of carbon dioxide emitted. Those companies still refusing to pay the fees or fines may find their wings clipped in Europe. 

In response, a "Rebel Alliance" of unlikely players has formed: Brazil, South Africa, India and China call themselves the BASIC bloc, though the United States and Russia are also involved. Saudi Arabia may even host the next rebellion planning meeting. 

Russia, which like the other countries just mentioned, opposed the EU’s greenhouse gas fees, is threatening in retaliation to reinstate over-flight fees for planes cruising over Siberia, which Russia gave up for World Trade Organization membership. The United States' State Department is also against the greenhouse gas fees, though there's no talk of retaliation or counter charges of any kind as of yet. 

China refuses to allow their air carriers to pay. Companies who feel they must will need special permissions from the Chinese government. 

A joint statement from environmental ministers of the BASIC countries said, 

"Ministers noted that the unilateral action by EU in the name of climate change was taken despite strong international opposition and would seriously jeopardize the international efforts to combat climate change." 

The EU's response is that it wouldn't be charging these fees if there were a global response to solving the greenhouse gas problem. It may take the United Nations' International Civil Aviation Organization (ICAO) to step in and suggest a resolution. But the EU says talks through ICAO haven't worked for the past 10 years, that's why they enacted the aviation emissions law in the first place. 

Moreover, history teaches that countries act only in their own interest and that the United Nations is an impotent organization unless the major powers want it to act.  No wonder talks through the ICAO haven’t worked. 

On the other hand, the EU’s carbon fees may be worse than not acting.  If one government (here, the EU) essentially places a tariff on doing business in that government’s jurisdiction, retaliation is sure to follow (example:  Russia, as discussed above). 

Whatever happens, the carbon emissions war is sure to do one thing: raise airfares for everyone. 

Stephen T. Holzer is a Business Litigation Attorney and the Chair of our Environmental Law Practice Group. Contact him by calling 818.990.2120.

 

 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Thursday
May262011

Cap and Trade System Capped for Now

Los Angeles Environmental AttorneyEnvironmental AttorneyStephen T. Holzer
May 26, 2011

Los Angeles Environmental Attorney

What is Cap and Trade? In 2006, California passed Assembly Bill 32, the Global Warming Solutions Act, meant to help the state meet a set goal of reduced greenhouse gas emissions by 2020. The California Air Resources Board (CARB) developed plans to meet those goals. 

One strategy included a cap and trade system which allowed companies emitting fixed amounts of greenhouse gases to earn credits when they emit less, and to buy credits when they emit more. But critics of the plan say the strategy wasn’t well thought out.

In late March, Judge Ernest Goldsmith of the San Francisco Superior Court issued a tentative ruling invalidating CARB’s program. The Judge has now finalized his ruling. 

 

Why Is CARB Under Fire?

 

The implementation of AB 32 was challenged not by industry, but by a coalition of environmental justice advocacy groups, which claimed CARB had not adequately considered viable alternatives to a cap-and-trade system. Who are the parties that filed suit? 

     ▪ Association of Irritated Residents
     ▪ Communities Against Toxics
     ▪ Communities For a Better Environment
     ▪ Coalition For a Safe Environment
     ▪ Society For Positive Action
     ▪ West County Toxics Coalition
     ▪ Various Individuals

The plaintiffs complained that the system, which sets an overall level of greenhouse gases that industry may emit into the environment imposes burdens on low-income communities. 

The unfairness allegedly arises because, while an overall pollution limit may be set, companies exceeding emissions allowances can buy credits from other companies and continue existing levels of individual company pollution. 

The advocacy groups complained that the companies benefitting from a cap and trade system are disproportionately in low-income areas. While the system may cap pollution in the long run, the groups allege that the end result would actually raise greenhouse gas levels in low-income communities. 

 

Cap and Trade & CEQA

 

CARB’s approach to curbing greenhouse-gas pollution was specifically challenged on the basis of the California Environmental Quality Act (CEQA). Judge Goldsmith’s final Statement of Decision agreed with the groups’ claim that CARB violated CEQA by, “failing to adequately analyze alternatives” to cap and trade. In other words,  the Judge said, CARB had failed to determine whether the goals of greenhouse gas regulation could be achieved without the flaws identified by the plaintiff groups.

You can find Judge Goldsmith’s Statement of Decision at  http://www.latimes.com/media/acrobat/2011-03/60311754.pdf  (Association of Irritated Residents, et al. v. California Air Resources Board, et al., Case No. CPF-09-509562). 

CARB was supposed to finalize the cap and trade program by the end of October. Will they make their own deadline? Some say we will be trading carbon by 2012, while others expect a court appeal. 

Stephen T. Holzer is a Los Angeles Environmental Lawyer, Shareholder and Chair of the Environmental Law Department. Contact him by calling 818.990.2120.

 

 
Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

 

 

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