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Court Upholds Use of Offset Credits in Californias Cap-and-Trade Program

On January 25, 2013, the San Francisco Superior Court, Judge Ernest Goldsmith presiding, denied a challenge to the California Air Resources Boards (CARB) Cap-and-Trade Regulation. Citizens Climate Lobby and Our Childrens Earth Foundation v. CARB, Cal. Super. Ct., No. CGC-12-5195544 (Jan. 25, 2013). The lawsuit sought to invalidate the use of a standards-based approach for determining whether projects should be awarded offset credits, which can be used by entities subject to the Cap-and-Trade Program to meet a portion of their obligation. While the Courts decision represents a significant victory for CARB, it does little to assure that a robust supply of offsets will be available to meet demand, at least during the early years of program implementation.

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