JMBM Development Rights: Evaluating Climate Change Through CEQA—Will SB 97 Clear the Haze?

Adopted approximately one year ago, the ramifications of California’s Global Warming Solutions Act of 2006, commonly referred to as Assembly Bill or AB 32, are being felt by California’s development community. AB 32 will likely affect the price of fuels, electricity, and raw building materials, as well as the urban fabric, design, and “feel” of our cities.

AB 32 and CEQA

AB 32 establishes a goal of reducing California greenhouse gas emissions (GHGs) to 1990 levels by 2020—roughly a 30 to 35% decrease from the current levels. Governor Schwarzenegger further mandated that by 2050, GHG emissions are to be “capped” at 80% below those 1990 levels. Imagine maintaining your current levels of economic prosperity emitting 35% less carbon—then using 80% less than that!

While AB 32 makes no specific reference to CEQA, the Office of California’s Attorney General (AG) Jerry Brown Jr. has determined that climate change should be considered under CEQA (a mandate implicitly confirmed with the enactment of Senate Bill (SB 97, discussed below). The AG recently settled a suit against San Bernardino County and a challenge to the expansion of a ConocoPhillips petrochemical refinery in Rodeo, California. Both challenges were brought on the basis that the projects’ environmental impact reports (EIRs) required by CEQA failed to adequately address impacts of global warming.

Evaluating GHG Emissions in CEQA Documents

That climate change must be evaluated under CEQA leaves environmental practitioners with numerous open questions. For example, what are the key environmental areas affected by climate change and what constitutes a “significant impact” upon climate change and how can it be mitigated? To date, when designing an appropriate strategy to address climate change under CEQA, most experts agree that: (1) GHG emissions from any given project will be individually limited but cumulatively considerable; and (2) the climate change section in CEQA documents should provide the regulatory and scientific background on climate change in California. The consensus, however, seemingly ends there.

The AG further asserts that lead agencies must quantify the GHG emissions from the proposed project, making a determination whether or not those emissions will result in cumulatively significant impacts. Lead agencies must then identify and adopt all feasible mitigation measures to minimize the project’s effect on global warming.

Other practitioners allege the AG’s assertions go beyond CEQA’s mandates and that under the “regular” rules established by the CEQA Guidelines and applicable case law, lead agencies are not required to evaluate “speculative” environmental impacts such as climate change. At the other end of the spectrum, still others have asserted that any new emissions generated by a project should be considered significant, thus requiring mitigation. The confusion inherent in these approaches, coupled with the fear that climate change based CEQA litigation could grind development in California to a halt, partially led to the adoption of SB 97.

SB 97 To The Rescue?

On August 24, 2007, SB 97 was passed, exempting certain state-funded development projects from legal challenge for failure to adequately evaluate climate change impacts under CEQA. In addition, SB 97 also requires the California Office of Planning and Research (OPR) to prepare and develop CEQA guidelines for the evaluation of GHG emissions. SB 97 mandates that the California Air Resources Board certify and adopt the guidelines by January 1, 2010. Given the current lack of an officially sanctioned approach to analyzing GHG emissions, any regulatory guidance will be welcome.

Benjamin M. Reznik is chairman of the Government, Land Use, Environment & Energy Department at JMBM. Contact him at BMR@jmbm.com.