In a decision released Sept. 18 the court held that the LCFS does not transgress the Commerc Clause. Two judges on a U.S. Court of Appeals for the Ninth Circuit panel found that California law may treat fuels with different levels of carbon intensity differently because the benefits obtained for the environment outweighs that discrimination.
"This is a great day for public health and the economy of California," Tim O'Connor, an attorney at Environmental Defense Fund and director of that organization's California Climate Initiatives, said. "The court clearly upheld a groundbreaking policy that will protect consumers and the environment by diversifying our fuel mix and providing more choices for a clean energy future."
The court's holding specifically sanctioned California's effort to take into account the greenhouse gas emission caused at all stages of a fuel's production, transportation, and distribution.
“If California is to successfully promote low carbon-intensity fuels, countering a trend towards increased [greenhouse gas] output and rising world temperatures, it cannot ignore the real factors behind GHG emissions,” the majority opinion by Judge Ronald M. Gould said.
Another noteworthy aspect of the Ninth Circuit's opinion is a recognition that states may formulate regulations that recognize the greenhouse gas emission implications of fuel producers' entire operations:
With its long coastlines vulnerable to rising waters, large population that needs food and water, sizable deserts that can expand with sustained increased heat, and vast forests that may become tinderboxes with too little rain, California is uniquely vulnerable to the perils of global warming. The California legislature determined that [greenhouse gas] emissions from the production and distribution of transportation fuels contribute to this risk, and that those emissions are caused by the in-state consumption of fuels. Whether or not one agrees with the science underlying those views, those determinations are permissible ones for the legislature to make, and the Supreme Court has recognized that these risks constitute local threats.The opinion also rejected a claim that the California LCFS is preempted by the federal Clean Air Act.
One of the three judges on the panel, Mary Murguia, dissented.
The LCFS is one aspect of California's multi-pronged efforts, based on the state's Global Warming Solutions Act of 2006, to reduce greenhouse gas pollution. It forces producers and distributors of fuels used in transportation systems, especially motor vehicles, to meet a gradually more rigorous schedule of reduced greenhouse gas emissions. The regulation does this by mandating a focus on the "carbon intensity" of the fuels. That term refers to the amount of atmosphere-warming compounds produced at each stage of the process of extracting, refining, distributing, and burning the fuel.
The case is Rocky Mountain Farmers Union v. Corey, No. 12-15131.
