California has long been a leader in the green energy and renewables industries, as we've often discussed. But an attempt to stretch that lead has been struck down in federal court in a blow to one of the state's landmark pieces of global warming regulation. The legislation in question, part of California's 2006 global warming law, concerned a mandate for low-carbon fuels. The regulation would have forced producers and refiners to reduce their fuel's carbon footprint by 10 percent by 2020, as part of a state effort to reduce greenhouse emissions to 1990 levels. The effort also includes installing 12,000 megawatts of distributedsolar and a mandate that the state hit a 33 percent Renewable Portfolio Standard within the decade.
The law assigned a 10-percent advantage to low-carbon fuels produced in California, the reasoning being that biofuels and the like produced outside of the state have higher carbon costs. While U.S. District Court Judge Lawrence O'Neill didn't necessarily disagree with the intent of the law, he issued a preliminary injunction against it on the basis that it violated the Constitution's Commerce Clause, which prohibits discrimination in interstate trade.
The law was adopted in 2010 by the California Air Resources Board (CARB), and it aimed to reward producers that use less energy in the production process. The argument for providing an advantage to Californian producers was twofold. First, in-state production would result in less transportation-based carbon as compared to biofuels shipped from the Midwest. Second, legislators argued that California producers have better access to cleaner, low-emission power -- hydroelectric, nuclear, renewables -- than competitors. It was an ambitious piece of regulation, and forward-thinking in that it attempted to account for carbon emissions throughout the entire production process.
In the end, California's goal of reducing greenhouse emissions “may be legitimate," the judge said in his ruling, but in this case, "it cannot be achieved by the illegitimate means of isolating the state from the national economy." Judge O'Neill also said that by valuing fuels based on farming and production practices, the state was attempting to regulate out-of-state conduct, which is beyond its constitutional power. He also said that California wasn't able to show that it couldn't accomplish its goals by other means that only affect in-state commerce, such as gas taxes and the like.
Fuel producers from outside California were obviously happy with the decision. "[The] decision ... struck down a misguided policy that would have resulted in even higher fuel costs for Californian consumers while increasing the cost of business throughout the state," Consumer Energy Alliance Executive Vice President Michael Whatley said to the AP.
Proponents of the law, which was the only one of its kind in the U.S., were less enthused. “If this decision stands, it would have an enormous chilling effect on states' ability to address climate change," Sue Reid, vice president of the Conservation Law Foundation, a group that intervened to help defend the regulation, told Reuters.
CARB has said it plans to ask O'Neill to put his ruling on hold, pending an appeal to the 9th Circuit Court of Appeals.