Update On Litigation Challenging California's Greenhouse Gas Regulatory Programs

Legal challenges to California's greenhouse gas ("GHG") regulatory programs continue to work their way through California and federal courts. With the most significant challenge facing possible review by the U.S. Supreme Court, two other challenges pending before the California Court of Appeal, and a fourth prompting CARB to redo part of its rulemaking, the long-term viability of California's latest efforts to curb GHG emissions is uncertain.

GHG Emission Allowances and Offset Credits

Under California's cap-and-trade program, covered operators of stationary sources of GHG emissions must surrender compliance instruments—emission allowances or offset credits—for each ton of GHGs they emit. The California Air Resources Board ("CARB") has adopted several methods of allocating these compliance instruments to covered entities, two of which face continuing legal challenges.