California’s First District Court of Appeal on Friday ruled that the state Air Resources Board (CARB) can proceed with implementation of a carbon cap-and-trade system. The ruling grants the state regulator a temporary stay on an order, pending the court’s decision, to halt work on the program that was issued by a San Francisco Superior Court judge on May 20.

A.B. 32, California’s landmark 2006 climate change law, tasked CARB with developing a roadmap to cut the state’s greenhouse gas emissions to 1990 levels by 2020. According to CARB, this means cutting about 30% from business-as-usual levels projected for 2020, or about 15% from today’s levels.

The agency’s "scoping plan" includes a range of actions, including direct regulations and market-based mechanisms such as a cap-and-trade system. The agency on Dec. 16 approved a resolution ordering its executive officer to proceed with finalizing cap-and-trade regulations for the program.

The suit against CARB had been filed by Communities for a Better Environment and the Center on Race, Poverty and the Environment, groups that claim cap and trade would not protect low-income communities from pollution released by nearby power plants and oil refineries.

The lower court in May had ruled that California failed to adequately analyze alternatives to a carbon market when it approved a statewide cap-and-trade plan in 2009.

It is unclear how long it could take before the court could issue a decision in the case.

Sources: POWERnews, CARB, Reuters