California's economywide cap-and-trade program got clearance to proceed yesterday from an appeals court that rejected environmental justice groups' arguments.

The decision in the 1st District Court of Appeal found the state Air Resources Board complied with state law when it decided to place a market-based cap over 85 percent of the state's greenhouse gas emissions. The first-in-the-nation system is scheduled to go into effect in January.

San Francisco Superior Court Judge Ernest Goldsmith originally ruled in March 2011 that the state had not adequately justified its choice of cap and trade over other policies like direct regulation or a carbon tax, forcing the Air Resources Board to redo its analysis of alternatives (ClimateWire, Dec. 8, 2011).

The three-judge appellate panel ruled yesterday that the agency had fulfilled its obligations under A.B. 32, the 2006 law that sets a target of 1990 emissions levels by 2020.

"The challenges inherent in meeting these goals can hardly be overstated," Justice Stuart Pollak wrote for the court. "It is not for the court to re-evaluate ARB's judgment call, which is neither arbitrary nor unsupported in the record."

Attorney Brent Newell of the Center on Race, Poverty and the Environment said that he hadn't had time to review the decision but that he still could petition the state Supreme Court for review. CRPE also filed a complaint earlier this month with U.S. EPA under Title VI of the Civil Rights Act, which prohibits racial discrimination by recipients of federal funding. The complaint holds that cap and trade allows companies to avoid reducing emissions directly at the source, depriving nearby residents of reductions in other air pollutants that would also occur (ClimateWire, June 13).

ARB praised the ruling in a statement. "We are pleased that the Court of Appeal agreed that California's climate plan fully addresses the requirements of A.B. 32," said agency spokesman Stanley Young. "This decision sends a clear message that California is the right place to invest in the full range of innovation and technologies that will continue to create new jobs and move California toward a clean energy economy."