On June 13, 2011, the California Air Resources Board (CARB) released a Supplement to its Functional Equivalent Document (FED) (the environmental review document for its cap-and-trade program). CARB was ordered by the San Francisco Superior Court to remedy deficiencies in the initial FED's analysis of alternatives to the cap-and-trade program proposed in the AB 32 Scoping Plan (for more information on this cap-and-trade program, please see our  previous blog post).

This ruling was initially a tentative one, but was finalized on May 20, 2011. For more information on the Court's determination, please see our earlier blog post

The Supplement provides a more extensive analysis of the five alternatives to the Scoping Plan. These include: (1) a no project alternative, (2) an alternative based on cap-and-trade, (3) an alternative based on source-specific regulatory requirements, (4) an alternative based on a carbon fee or tax, and (5) an alternative program based on a variation of proposed strategies.

The Supplement will be open for 45 days (until July 28, 2011) for public comment. The Supplement (along with the FED for the AB 32 Scoping Plan) will be considered by the board of CARB for approval on August 24, 2011 in Sacramento, California. Should the revised analysis prove sufficient from the court's point of view, it is likely that California's cap and trade program will begin as scheduled in 2012. Although implementation of convergent cap and trade programs in British Columbia, Ontario, Quebec and Manitoba may be delayed until after 2012, as members of the Western Climate Initiative, these provincial cap and trade programs will link into the California program to form a larger regional carbon market.