New Civil Rights Complaint Attacks California’s Greenhouse Gas Cap & Trade Program as Racially Discriminatory

By Prof. Alan Ramo

The Center on Race, Poverty and Environment has opened a new front in its war against California’s Cap & Trade program, which is intended to reduce industrial greenhouse gas emissions.  The Center on behalf of a number of environmental organizations has filed an administrative complaint under Title VI of the Civil Rights Act of 1964, 42 U.S.C. §2000d, with the U.S. Environmental Protection Agency (“US EPA”), alleging that the California Air Resources Board’s (CARB) Cap & Trade program will either deny people of color or ethnic minorities the benefits of this program or actually exacerbate emissions in their neighborhoods.

The complaint focuses upon the “co-pollutants” that either accompany or are the constituents of the greenhouse gases that are to be regulated.  These pollutants include both “criteria” pollutants under the Federal Clean Air Act, such as particulate matter, or regulated toxic chemicals, all of which have near-field impacts.

The gist of the complaint is that the choice to use Cap & Trade, which is not required under California’s AB32 legislation establishing its climate change regime, impacts disproportionately those who live within six miles of the large facilities regulated under the program.  Relying upon the well-regarded work of USC’s Manuel Pastor and his associates in the report Minding the Climate Gap: What’s at Stake if California’s Climate Law Isn’t Done Right and Right Away, the complaint alleges that those suffering these disproportionate impacts from these co-pollutants are predominantly people of color or ethnic minorities.  Thus the Center says this program violates Title VI’s “disparate impacts” test as it has been interpreted by US EPA.

While most know that in one way or the other subjecting someone to discrimination is illegal, few realize that Title VI addresses also the disparate denial of the benefits of a program:

“No person in the United States shall, on the ground of race, color or national origin, be excluded from participation in, be denied the benefits of, or be subject to discrimination under any program or activity receiving federal financial assistance.”

Title VI covers the entire program of those receiving federal benefits, such as the California Air Resources Board.  It establishes an administrative process where federal agencies can receive complaints if a state or local agency violates Title VI itself (deemed to require intentional discrimination) or implementing regulations adopted by the agency (which incorporates a less stringent disparate impacts test).  42 U.S.C. §2000d-1; See Alexander v. Sandoval, 532 U.S. 275 (2001).  Federal agencies have exclusive authority to enforce their regulations under the Alexander v. Sandoval case.

EPA’s regulations, cited in the complaint, specifically prohibit a funding recipient from using “criteria or methods of administering its program or activity which have the effect of subjecting individuals to discrimination . . . or have the effect of defeating or substantially impairing accomplishment of the objectives of the program or activity with respect to individuals of a particular race, color, national origin, or sex.”  40 C.F.R. §7.35(b).  The “have the effect” language is the source of the disparate impacts test.

The complaint argues that if older industrial facilities trade for permits or allowances, or buy offsets from sources that may be far from a local community (provisions in the program allow offsets from other areas in the state or other states and countries), allowing them to avoid reductions, then the people who live nearby will not experience the same benefits of a program reducing greenhouse gases as those who live near facilities that are actually reducing pollutants.  Even worse, if a facility is allowed to increase its emissions by increasing operations or expanding capacity by purchasing offsets, for example, then people nearby will suffer additional and discriminatory health impacts.  It is feared that the older facilities in urban core areas will do just that rater than try to innovate and reduce emissions to create credits for sale.

Under Title VI, an agency can defend its actions by claiming it has a legitimate purpose in the way it is carrying out its program.  However, if there is a less discriminatory alternative, the defense fails.  Georgia State Conference of Branches of NAACP v. Georgia, 775 F.2d 1403, 1417 (11th Cir. 1985); See Ricci v. Destefano 557 U.S. 557, 129 S. Ct. 2658, 2673 (2009).

That’s what the Center charges in its complaint.  It says command and control would be a less discriminatory alternative by requiring reductions of every facility and therefore avoid discrimination.  As there is a less discriminatory alternative, Cap & Trade’s potential disparate impact constitutes impermissible discrimination.

California will undoubtedly oppose the complaint.  These issues have come up before and are in some respect now before the Court of Appeal in a separate case brought by the center.  See prior blog. CARB will claim that Cap & Trade is just as effective, if not more, and will cost industry less, helping the economy.  CARB in its latest environmental review documents claimed that other laws will prevent pollution problems, principally state and federal clean air acts.  The Center, anticipating this argument, provides examples of how a technology and cost/effectiveness statute like the Federal Clean Air Act does not necessarily assure reductions in pollution.

There continues to be debate about whether trading inevitably results in discriminatory reductions in pollution.  See Richard Toshiyuki Drury, et. al., Pollution Trading and Environmental Injustice:  Los Angeles’ Failed Experiment in Air Quality Policy, 9 Duke Envtl. L. & Pol’y F. 231 (Spring, 1999); Alice Kaswan, Climate Change, the Clean Air Act, and Industrial Pollution, 30 UCLA J. Envtl. L. & Pol’y 51 at notes 184, 188 (2012).  CARB asserts that it is very unlikely.  In the rare case where there is a trading aberration, the agency says it will employ a vague doctrine called “an adaptive management approach”, where it will monitor the trading program for increases in criteria air pollutant or toxic emissions, and if any adverse impacts are identified, it will use its authority under state and federal law to modify the program to lessen the impacts.  CARB Resolution 11-27 at 6.  Whether this approach will provide sufficient assurance that civil rights will be protected is now before the U.S. Environmental Protection Agency.

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