Lawsuit Claims That California Sells Bogus Credits to Polluters

August 20, 2008 | Roger McEowen


The Natural Resources Defense Council (NRDC) has filed a lawsuit in federal court claiming that the South Coast Air Quality Management District (SCAQMD)has encouraged air pollution for nearly 20 years by selling invalid “offset accounts” to polluters.  The NRDC claims that SCAQMD (a government agency) sells pollution reduction credits to polluters that do not take real steps to reduce pollution.  The NRDC is challenging the SCAQMD’s actions in the South Coast Air Basin, which includes all of Orange County and parts of Los Angeles, Riverside and San Bernadino Counties.  The federal Clean Air Act (CAA) sets standards for six air pollutants – carbon dioxide, lead, nitrogen dioxide, ozone, particulates and sulfur dioxide, and allows states to create plans to address pollution in areas with unclean air.  These programs may include emission offset trading programs that require new sources to obtain credits for every pound of new pollution that they propose to emit.  Federal law also identify and clarify what constitutes a valid credit, and defines such key terms as “real,” “surplus,” “enforceable,” “quantifiable,” and “permanent.”  The lawsuit claims that SCAQMD has violated the offset requirements by selling and distributing emission reduction credits that do not demonstrate that these credits are real, surplus, enforceable, quantifiable and permanent.  However, the lawsuit notes, SCAQMD has used the allegedly invalid credits to allow thousands of facilities to produce new emissions in the already heavily polluted Basin.  The suit claims that the emissions are severely damaging and, in some cases, lethal to Basin residents.  The plaintiff is seeking an injunction and removal of the invalid credits from the polluters’ accounts, and an order that the SCAQMD comply with the CAA.  Natural Resources Defense Council, et al. v. South Coast Air Quality Management District, No. CV08-05403, filed Aug. 18, 2008, (C.D. Cal). 

Note:   The same scheme is occurring in the Midwest – but it involves the sale of  “carbon credits.”  It’s just a shell game resulting in no net pollution reduction.  It’s practically a certainty that in due time, the same type of lawsuit will be filed against the carbon trading programs.