The Newsroom

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Washington, DC — Protocols implementing California’s groundbreaking climate law, AB32, would allow many activities that are already occurring to count as greenhouse gas offsets, contrary to AB32’s requirements, argues a lawsuit filed today by the Citizens Climate Lobby and Our Children’s Earth Foundation.  The suit will test the integrity of the offset mechanism that has been central to many of the cap-and-trade systems for reducing greenhouse gas emissions associated with climate change, according to Public Employees for Environmental Responsibility (PEER).

AB32 (California’s Global Warming Solutions Act of 2006) enacted mandatory greenhouse gas emissions reduction goals.  Under regulations and protocols recently adopted by the California Air Resources Board (ARB), up to 85% of the required greenhouse gas reductions in ARB’s cap-and-trade program could be met by the use of offsets.  ARB has approved offsets for projects such as livestock manure digesters, urban and rural forestry practices and destruction of ozone depleting substances.   

The lawsuit contends that these offsets fail to meet the twin statutory standards that were intended to ensure the reliability of AB32 reductions, namely –

•  Any “greenhouse gas emission reductions achieved are real, permanent, quantifiable, verifiable, and enforceable by the state board”; and

•   Any such “reduction is in addition to any greenhouse gas emission reduction otherwise required by law or regulation, and any other greenhouse gas emission reduction that otherwise would occur.”

Offsets, on the other hand, are imaginary commodities based upon guesses about what would have happened in their absence.  The suit, filed in the California Superior Court in San Francisco, argues that the offset protocols and regulations violate the statutory standards because they lack a reliable way to distinguish what has happen because of the offset payments versus what would have happened anyway. In addition, the lawsuit claims that many activities that are already ongoing would qualify as offsets under the recently approved regulations.  As a result, the use of these offsets would allow a false accounting of California’s progress in fighting climate change.

The flaws of the offsets permitted by the California program would include:

• Inherently subjective and hypothetical;

• Lack a reliable way to what will happen versus what would have happened anyway

• Relocate rather than eliminate harmful practices; and

• Create perverse incentives to keep polluting activities going so they can be used for offsets.

“Unfortunately, the additionality of offsets cannot be reliably verified or enforced,” stated PEER Executive Director Jeff Ruch, noting that each of the new AB 32 protocols suffer from a welter of weaknesses.  “Offsets are a Trojan Horse designed to topple the entire regulatory structure.”

The arguments in the suit dovetail with past analyses by the Government Accountability Office as well as the experience of the U.S. Environmental Protection Agency when it tried to implement market-based pollution control programs.   In fact, two of the key players in the Citizens Climate Lobby lawsuit, Laurie Williams and Allan Zabel, are EPA enforcement attorneys acting as private citizens.