California’s First District Court of Appeal has continued the stay of a Superior Court’s order which had enjoined the California Air Resources Board (CARB) from continuing to work on developing its cap and trade regulations for California (See our post “California Update—renewable energy”).  The Superior Court had earlier required CARB to undertake further analysis of its AB 32 Scoping Plan (See our post “California Court Puts Brakes on Cap and Trade Program”).  As reported, the Superior Court had found that CARB did not adequately evaluate alternatives and approved the Scoping Plan before receiving and responding to public comments.  That decision of the Superior Court has been appealed by CARB and, with the stay now continued, CARB can continue with work on developing the cap and trade program to meet the January 1, 2012 start date for cap and trade in that state. California is a leading member of the Western Climate Initiative (WCI), which includes six other US states, British Columbia, Manitoba, Ontario and Quebec.

Meanwhile, on July 1, the Chairman of CARB reported to a senate committee that while California still proposes to start its cap and trade program in 2012, the first compliance period, initially planned to be 3 years from 2012-2014, will now be shortened to 2 years covering 2013 and 2014 (Chairman Nichols’ published remarks).  As well, it was announced that the first quarterly auction of emissions allowances will be delayed to the second half of 2012, rather than February 2012 as originally planned.  Reasons for the delay include the need to test and model the system to make sure it cannot be gamed. CARB has published draft regulations covering allowance distribution and details on offset protocols and will hold public workshops to obtain feedback before final regulations are issued in the fall.

No recent word from British Columbia confirming whether its cap and trade program is on track to commence January 1, 2012.  BC’s proposed regulations have yet to be published.