You can’t have an energy credit trading system with phony credits. Even worse – you can’t have an energy credit trading system when the organization that controls the credits knows that they are phony. That’s like letting counterfeiters take over the U.S. Mint.
Today, NRDC -- along with Communities For A Better Environment, Coalition For A Safe Environment, and Desert Citizens Against Pollution -- filed a lawsuit in federal court in Los Angeles, against the regional air regulators, the South Coast Air Quality Management Board (“SCAQMD”). The suit alleges that SCAQMD’s air pollution credits violate federal Clean Air Act requirements that credits be real, surplus, enforceable, quantifiable, and permanent. We believe, and are prepared to prove, that SCAQMD distributed and sold these invalid credits to countless polluting facilities for nearly two decades, introducing unlawful pollution into the South Coast Air Basin, a huge area that includes all of Orange County and significant portions of Los Angeles, Riverside, and San Bernardino Counties, and also happens to be the dirtiest air basin in the country.
Our lawsuit rests on data from the state confirming that SCAQMD, purporting to hold 124.46 tons per day of pre-1990 credits in its offset accounts, violated the federal offset requirements, and that no documents exist, or have ever existed, to verify the validity of these credits. When you add up every credit SCAQMD sold or handed out to polluters during the past 17 years, the air district actually has a negative balance in its offset accounts – although it is still giving away and/or selling offset credits. If you tried this with your checking account, checks would be bouncing all over town. We are asking the federal court to conduct an accounting to see just how many – if any – legitimate offset credits SCAQMD has left, and to prohibit SCAQMD from using phony credits to allow more pollution in Southern California.
Here’s the background. Under the Clean Air Act, polluted areas such as Los Angeles are required to implement a program to control pollution from new sources of emissions. These can include emission offset trading programs that require new sources to obtain credits for every pound of new pollution that they propose to emit. Emission reduction credits, in theory, represent quantified reductions of “criteria pollutants” and ozone precursors—CO, nitrogen oxides (NOx), PM10, volatile organic compounds (VOCs), and sulfur oxides (SOx)—that result from the installation of new technology at, or shutdowns of, old polluting sources. As part of its program, SCAQMD has adopted a trading system through which all new sources must obtain emissions reduction credits before beginning construction. Thus, no new emissions of the specified pollutants may occur in the SCAQMD’s jurisdiction unless a facility has obtained sufficient credits to offset its projected emissions.
Under federal law, a valid emission reduction credit must be real, surplus, enforceable, quantifiable, and permanent. All reductions must also have legal documentation. There is no dispute that these are the rules. But SCAQMD has not played by the rules.
AQMD contends that the polluting facilities in question, in this case 10 power plants to be built in the Southland, are necessary to meet the region’s growing demand for power. But a recent study confirms that much, if not all, of the region’s energy demand can be met by employing energy efficiency measures and investing in transmission lines to wind and solar plants scheduled to become available by 2013. And those facilities, the coalition counters, should have to buy the credits on the open market as originally intended under the Clean Air Act.
If the money factor wasn’t enough, a recent AQMD report confirmed that constructing just one of the 10 proposed power plants in the City of Vernon will likely result in killing anywhere from four to 11 people each year, causing hundreds of premature deaths over the life of the facility. The plant is also planned for construction next to a heavily populated, majority Latino neighborhood.
Thanks to a recent court win over how SCAQMD creates the credits, plans to build those 10 power plants near Vernon are on ice for now. However, if Plaintiffs win today’s lawsuit, AQMD will be required to end the use of unlawful credits and implement a program to reduce emissions in amounts equal to the emissions that were unlawfully allowed.