Last week, Judge Lawrence O’Neill of the U.S. District Court in Fresno issued a preliminary injunction blocking enforcement of California’s Low Carbon Fuel Standard (LCFS), a regulation requiring a 10% reduction in the carbon content of motor fuels sold in the state by 2020. O’Neill concluded that the LCFS violates the Commerce Clause of the U.S. Constitution because it discriminates against out-of-state economic interests and attempts to control conduct outside the state’s jurisdiction.

The California Air Resources Board (CARB) adopted the LCFS as part of its strategy to implement California Assembly Bill 32, the Global Warming Solutions Act of 2006, which aims to reduce the state’s total greenhouse gas (GHG) emissions to 1990 levels by 2020. Other AB 32-implementing measures include a cap-and-trade program covering the state’s largest emitters, a renewable portfolio standard (RPS) requiring 33% of California’s baseload power to come from renewable sources by 2020, and the state’s motor vehicle greenhouse gas emission standards (AB 1493), which implicitly (and, I argue, unlawfully) regulate fuel economy. CARB estimated that the LCFS would reduce in-state carbon dioxide-equivalent (CO2-e) emissions by 16 million metric tons (mmt), or about 10% of the total 174 mmt CO2-e emission reduction target for 2020.

The injunction is a setback for the California greenhouse political establishment, including former Gov. Arnold “I say the debate is over” Schwarzenegger, who issued the Jan. 2007 executive order directing CARB to develop and adopt the LFCS. CARB says it will appeal O’Neill’s decision. If the injunction is upheld, it should strengthen opponents of similar policies proposed or adopted by other states.

O’Neill considered three separate lawsuits by refiners, truckers, and out-of-state ethanol producers against the LCFS. The injunction focuses on the ethanol producers’ complaints.

The LCFS requires a 10% reduction in the carbon intensity (CI) of motor fuels sold in the state by 2020. CI is calculated on a life-cyle (“well-to-wheels”) basis, taking into account not only the GHGs emitted when the fuel is combusted but also emissions associated with production and transport of the fuel. Life-cycle analysis is an essential planning tool for climate policy regulators, because what supposedly matters climatologically is not the emission reductions from a particular source or jurisdiction but the net reduction in global emissions.

For example, life-cycle analysis indicates that switching from gasoline-powered cars to electric vehicles in China would actually increase net GHG emissions, because almost 80% of China’s electricity comes from coal.

But it’s precisely CARB’s use of life-cycle analysis that puts the LCFS crosswise with the U.S. Constitution. Midwest ethanol producers get much of their electricity from coal. To sell their product in California they must transport it thousands of miles. Their methods of turning ethanol byproducts into animal feed may be more carbon-intensive than comparable operations in California. On a life-cycle basis, ethanol produced in the Midwest, although physically and chemically identical to ethanol produced in California, has a higher CI rating.

Thus, to compete in the California motor fuels market, Midwest producers must either make additional CI-reducing investments California producers do not have to make, or buy surplus low-carbon fuel credits from California producers whose CI score is below the required state-wide average for that year. Either way, the LCFS puts the Midwest producers at a competitive disadvantage. It discriminates against interstate commerce.

In Judge O’Neill’s words:

CARB is attempting to stop leakage of GHG emissions by treating electricity generated outside the state differently than electricity generated inside its border. This discriminates against interstate commerce. Moreover, tying carbon intensity scores to the distance a good travels in interstate commerce discriminates against interstate commerce.

O’Neill also agreed with plaintiffs that the LCFS attempts to control conduct outside of California’s territorial jurisdiction. According to plaintiffs, CARB’s life-cycle analysis “calibrates CI scores so that they regulate, among other things, deforestation in South America, how Midwest farmers use their land, and how ethanol plants in the Midwest produce animal nutrients.” For example, CARB “imposes a substantial penalty — more than 30% of the CI score for corn ethanol — for ‘indirect land use.’ That penalty is used to discourage farmers around the world from converting nonagricultural land into farmland to enter the corn market.”

CARB contends that taking these out-of-state activities into account in calculating CI scores is not the same as regulating those activities. O’Neill disagreed. Just because the LCFS does not “directly regulate” out-of-state activities does not mean it does not attempt to control the conduct of out of state activities. CARB acknowledges that the LCFS assigns higher CI scores based on those out-of-state activities to provide “an incentive for regulated parties to adopt production methods which result in lower emissions.” CARB “cannot dispute that the ‘practical effect’ of the regulation would be to control this conduct — occurring wholly outside of California.” Thus, the LCFS “impermissibly attempts to ‘control conduct beyond the boundary of the state.’”

O’Neill also considered what would happen if many or all states adopt a LCFS. To the extent that distance traveled influences CI, each state’s LCFS would discriminate against out-of-state imports. [A Midwest LCFS would discriminate against California ethanol producers -- Ha!] The proliferation of LCFS regulations would “balkanize” fuel markets and “plainly intefere” with free trade in ethanol and ethanol production. Moreover, there is no guarantee that each state would set the same CI reduction targets. “Ethanol producers and suppliers would be hard pressed to satisfy the requirements of 50 different LCFS regulations which may require 50 different levels of reductions over 50 different time periods.”

If upheld, Judge O’Neill’s ruling should embolden opponents of the LCFS proposed last August by the Northeast States for Coordinated Air Use Management (NESCAUM).

So, we read that Hollywood, Al Gore’s group, rent-seeking industry and other green groups have been joined by the rest of the usual suspects-Google, Bill Gates-in opposing Proposition 23, a ballot initiative to delay their state’s energy rationing law which will soon take effect. That is, barring voter intervention putting a temporary stay on this economic suicide pact until the state’s economy recovers somewhat.

I should think that’s about all one needs to know about Proposition 23.

Still, all of that money to protect the global warming industry’s gravy train seems to be having an effect among telephone survey respondents. But it remains a close one. And that’s why they suit up and play the game.

The people who will be hurt most by this costly gesture by elites who for the most part will not feel the pinch of California sinking further down the drain, particularly Hispanic voters, support reclaiming voter sovereignty on an issue the political class has proven an inability to responsibly manage.

I suppose this is just fodder for so much more hand-wringing by the Left about the regular voter being too stupid for the elites to stomach. How dare those imbeciles not wildly fall for it! Remember, AB 32 was passed as a global warming law. When it began to dawn on people that now was not the time for foolish gestures, even in California, and since no one actually posits that AB 32 would ‘do something’ to the climate in any detectable way (or even close, accepting all of the alarmists’ assumptions), the party line promptly switched to it being a jobs bill. Yeah, that’s it.

And, now, as the truth is making the rounds that this “world’s first” scheme has in fact proven to be a job-killing bog in many places already, the global warming industry has now done its usual late-hour race to the bottom. One pressure group is blitzing the airwaves with shameful ads saying this is about (of course) childhood respiratory function. Not a word in the ad about global warming. Huh. This comes from the California chapter of a group long having had a difficult relationship with being straight on such matters (including, as Reason’s Joel Schwartz has pointed out on many occasions, about California-specific issues and, as I detailed in Red Hot Lies, about global warming).

Which begs the question, unless they are just torturing the facts and being alarmist (again), why wasn’t that the reason AB 32 was passed to begin with? Instead, it was (risible) state-specific computer-modeled scenarios of doom unless the people allowed the political class to strip them of ever more freedoms. It was the faddish “global warming” pony they sought to ride to the long-held desire to price energy out of the reach of the same average voters whose proliferation and attainment of automobility, vacations and the like the elites just couldn’t tolerate.

You will know them by their deeds, and the global warming industry’s have a pretty miserable record.

I’ve blogged before on the LA Times’s one sided coverage of AB 32, California’s first-in-the-nation climate change mitigation law. In a nutshell, the LA Times is a big cheerleader for the legislation, with a record of publishing favorable stories and ignoring negative ones.

Case in point: Today, the Times ran an opinion piece, “A Green Jobs Generator,” by two economists who claim that their economic analysis of AB 32 is being distorted by opponents of the legislation. The LA Times allowed them the space to set the record straight, and thus its editorial page again reassured readers that “doing something” about climate change will be easy because it will reduce energy costs and create “green jobs.”  Of course, this is baloney-in fact, “doing something” about climate change will make energy more expensive and thereby kill jobs-but the LA Times has an agenda to push, so why sweat the details.

Also today, E&E ClimateWire broke the news that Larry Goulder, the lead author of a recent AB 32 economic analysis commissioned by the state, is on the board of directors of a non-profit that has given money to a political campaign to defeat a ballot initiative that would suspend AB 32. So it’s not surprising that he concluded that AB 32 would create jobs. Naturally, the LA Times covered Goulder’s favorable economic analysis when it was released a few weeks ago. But it has yet to report on his association with a pro-AB 32 political organization. Perhaps it will tomorrow, but I doubt it.

Goulder told ClimateWire that nothing is amiss, but it sure seems like a conflict of interest to me. If an Exxon staffer punched up an economic report suggesting that AB 32 would harm California’s economy, environmentalists would throw a hissy-fit. And the LA Times, no doubt, would try to discredit the report as “industry funded.”