Today CARB released a supplement to its previous Environmental Review Document that considers the five new alternatives to cap-and-trade, to fortify the its environmental review under the California Environmental Quality Act (CEQA). As discussed in a previous DWT Alert, the San Francisco Superior Court found that CARB failed to adequately analyze alternatives to its Assembly Bill 32 (AB 32) cap-and-trade program in Association of Irritated Residents (AIR) v. CARB [Case No. CPF-09-509562].

In addition to "no project" and the cap-and-trade program, this new document analyzes alternatives based on (1) source-specific regulatory requirements, (2) a carbon fee or tax, and (3) a "combination" approach that incorporates select features from the cap-and-trade program, the source-specific regulatory requirements and the carbon fee/tax proposals.

The public has 45 days to comment, or by July 28, 2011. CARB plans to hold a public workshop on its supplemental environmental review of cap-and-trade during the 45-day comment period, though the specific date has not been set. A public hearing on this matter is scheduled at CARB for August 24, 2011.

Meanwhile, the flurry of appellate activity in the First Appellate District of California has yet to definitively resolve whether CARB can proceed with cap-and-trade program implementation while it conducts its CEQA alternatives analysis on the program. Briefing on whether CARB can move forward with its cap-and-trade rulemaking activity while it appeals the San Francisco Superior Court decision must be submitted by June 20. Stay tuned for more details.