Association of Irritated Residents (AIR) v. CARB, which forced the California Air Resources Board (CARB) to halt implementation of its A.B. 32 cap-and-trade regulations until the agency conducts an adequate environmental analysis of alternatives to the cap-and-trade program, is just one of a mounting list of hurdles to keep the program on track for January 2012. The May 20, 2011, ruling narrows a preliminary ruling that would have halted all of the state’s greenhouse gas (GHG) regulations and could have affected other A.B. 32 provisions. Petitioners alleged that the cap-and-trade regulation would exacerbate pollution in low-income, minority communities by allowing polluting facilities to purchase GHG offset credits instead of reducing emissions at their facilities.

CARB has already taken an appeal from the final judgment. And while the agency has been working to satisfy the court’s order, a dispute has arisen over whether the appeal’s filing automatically stayed the court’s order and, thus, allows CARB to continue working toward its January 2012 deadline. Critics contend that CARB is downplaying the court’s ruling and the importance of the environmental review process, and signals possible inadequate public participation.

These matters compound the laundry list of tasks CARB must also complete, including, among other things, finalization of numerous operational rules and policies, the implementation of a market tracking system, initial deployment, initial training for covered entities, an auction system, and a GHG-offset tracking system. Finally, petitioners’ representatives presume that CARB will face further legal challenges as various regulations and components are finalized.

Regardless of the potential obstacles, CARB officials remain hopeful, claiming they will be able to respond to the court’s order in time to keep the GHG cap-and-trade program on schedule for its January 1, 2012, implementation date.