## Facts

- The Global Warming Solutions Act of 2006 (AB 32) directed the California Air Resources Board (ARB) to set a statewide greenhouse-gas (GHG) emissions limit equivalent to 1990 levels to be achieved by 2020, and to prepare and approve a “scoping plan” for achieving the maximum technologically feasible and cost-effective GHG reductions.
- AB 32 required ARB to evaluate the economic impacts of measures included in the scoping plan and to update the plan at least every five years.
- After research, public workshops, and hearings, ARB adopted a Climate Change Scoping Plan that identified 18 categories of reduction measures and also recommended additional measures aimed at reductions beyond 2020.
- The Scoping Plan recommended relying primarily on a cap-and-trade program for large industrial sources, based on ARB’s conclusion that cap-and-trade was the most cost-effective option among those it evaluated.
- For agricultural emissions, the Scoping Plan emphasized voluntary actions rather than direct regulations, citing scientific uncertainty and difficulty quantifying certain biologically based sources of agricultural GHG emissions.
- The Association of Irritated Residents and other organizations and individuals (AIR) petitioned for a writ of mandate challenging ARB’s approval of the Scoping Plan. AIR argued, among other things, that:
  - the plan achieved only the minimum target (1990 levels by 2020) rather than the maximum feasible and cost-effective reductions required by AB 32;
  - ARB lacked a standardized approach for evaluating cost-effectiveness and economic impacts across measures; and
  - ARB unlawfully omitted feasible and cost-effective direct regulations for industrial and agricultural emissions in favor of cap-and-trade and voluntary agricultural measures.
- AIR also challenged ARB’s environmental review under the California Environmental Quality Act (CEQA), including the adequacy of ARB’s analysis of alternatives.
- The trial court rejected AIR’s AB 32 statutory claims but found CEQA error in ARB’s alternatives analysis and issued a limited writ directing additional CEQA work while allowing certain implementation steps to proceed.
- The parties filed cross-appeals addressing (1) AB 32 compliance and (2) CEQA compliance and the scope of the remedy.

## Issues

1. Whether ARB violated AB 32 by approving a Scoping Plan that AIR contended pursued only the minimum statewide 2020 limit (1990 levels) rather than the maximum technologically feasible and cost-effective reductions.
2. Whether AB 32 required ARB to use a standardized, uniform methodology to quantify and compare cost-effectiveness and economic impacts for all measures in the Scoping Plan.
3. Whether ARB violated AB 32 by relying heavily on cap-and-trade for industrial sources and by choosing voluntary measures rather than direct regulations for agriculture.
4. Whether ARB’s CEQA review for the Scoping Plan adequately analyzed reasonable alternatives, and, if not, what implementation could continue while ARB corrected the CEQA deficiency.

## Decision

- The Court of Appeal largely affirmed the trial court’s rejection of AIR’s AB 32 claims, holding that ARB’s Scoping Plan fell within the discretion AB 32 grants ARB to select measures that are feasible and cost-effective to meet the statewide 2020 limit.
- The court concluded AB 32 did not require ARB to demonstrate that it had adopted every additional reduction measure that might arguably be feasible and cost-effective beyond what was needed to reach the 2020 statewide limit.
- The court held AB 32 does not compel any single, standardized mathematical method for cost-effectiveness across all measures; ARB’s evaluation of costs and economic impacts satisfied the statute’s direction.
- The court upheld ARB’s reliance on cap-and-trade as a central tool and its decision to proceed with voluntary agricultural measures given scientific and measurement uncertainty.
- On CEQA, the court agreed that ARB’s alternatives analysis was deficient and that additional CEQA review was required.
- The court upheld a tailored remedy that required ARB to correct the CEQA deficiency while permitting continued work that would not prejudice informed environmental review; implementation tied to the defective alternatives analysis could be restricted until CEQA compliance was achieved.

## Legal Principles

- AB 32 sets a statewide 2020 emissions limit as a concrete benchmark and assigns ARB the task of selecting a set of measures that are technologically feasible and cost-effective to achieve that benchmark.
- Courts generally defer to an agency’s technical and predictive judgments where the Legislature has delegated decisionmaking on feasibility, cost, and program design to the agency, so long as the agency’s choices are reasonable and supported by the record.
- AB 32 authorizes ARB to use market-based compliance mechanisms, including cap-and-trade, and does not require ARB to prefer prescriptive direct regulation over market-based tools.
- AB 32’s cost-effectiveness and economic-impact requirements call for reasoned consideration, not a mandated single formula applied uniformly to every measure.
- CEQA requires a good-faith analysis of a reasonable range of alternatives to a plan-level program, sufficient to inform decisionmakers and the public; conclusory treatment of key alternatives can be inadequate.
- When CEQA error is found, courts have discretion to craft a remedy that addresses the defect while allowing activities that do not compromise meaningful environmental review.

## Conclusion

The Court of Appeal upheld ARB’s Scoping Plan against AIR’s AB 32 statutory challenges, finding ARB acted within its delegated authority in selecting a mix of measures that included cap-and-trade and voluntary agricultural actions. The court also agreed that ARB’s CEQA alternatives analysis required further work and approved a limited remedy requiring additional CEQA compliance while allowing non-prejudicial implementation steps to continue.


Association of Irritated Residents v. California Air Resources Board, 143 Cal. Rptr. 3d 65, 206 Cal. App. 4th 1487 (2012)