I recall that Mike Zischke, co-author of CEB’s excellent CEQA treatise, used to be fond of saying the “normal” or “usual rules” for analyzing cumulative impacts should apply to analysis of a project’s greenhouse gas (GHG) emissions under CEQA. As underscored most recently by Governor Brown’s April 29, 2015 Executive Order B-30-15, the law, policy and science related to GHGs and climate change are evolving rapidly. In the face of such rapid change, is it possible that the “usual rules” are in flux or no longer apply? At the very least, Governor Brown’s much-publicized recent executive order highlights that CEQA analysis of GHG impacts under the “usual rules” has “evolved” into a state of considerable uncertainty and confusion.
Brief Background: GHGs Viewed Through CEQA’s Analytic Lens
In 2007, SB 97 amended CEQA to require OPR to develop proposed CEQA Guidelines for mitigation of GHGs or their effects, and to periodically update those guidelines to incorporate new information or criteria established by the California Air Resources Board (CARB) pursuant to AB 32 – the landmark Global Warming Solutions Act of 2006 (Health & Safety Code, § 38500 et seq.). OPR did so and the GHG guidelines became effective in 2010.
Essentially, GHG emissions causing global warming and climate change represent significant cumulative impacts requiring analysis under CEQA on a project-by-project basis – whether the project under review is statewide, regional or local in nature and whether it is a plan, program or site-specific project. A project’s incremental effect, though individually limited, may be cumulatively considerable, meaning “that the incremental effects of an individual project are significant when viewed in connection with the effects of past projects, the effects of other current projects, and the effects of probable future projects.” (CEQA Guidelines, § 15064(h)(1).) An individual project’s GHG emissions must therefore be analyzed to determine whether they make a “cumulatively considerable” contribution to climate change/global warming and should accordingly be considered a significant project effect requiring analysis and mitigation to the extent feasible. (§ 15064.4(a), 15064(h)(1), (3), (4).)
CEQA requires – consistent with its “usual rules” – that a lead agency exercise careful judgment in determining the significance of a project’s GHG emissions. (§ 15064.4(a), citing § 15064.) It instructs that the lead agency should consider various factors, including: (1) the extent to which the project increases or reduces GHG emissions compared to the existing environmental setting; (2) whether project emissions exceed a threshold of significance the lead agency determines applies; and (3) the extent to which the project complies with regulations adopted to implement statewide, regional or local plans for GHG reduction or mitigation. (§ 15064.4(b)(1)-(3).) A lead agency may adopt a threshold of significance adopted or recommended by experts if its decision to do is supported by substantial evidence. (§ 15064.7(c).) A lead agency may also determine a project’s incremental contribution to GHG impacts is not cumulatively considerable if it will comply with regulations or requirements in, or adopted to implement, a statewide, regional or local plan for the reduction of GHG emissions. (§ 15064.4(b)(3), 15064(h)(3).) However, in order for a lead agency to rely on such regulations or requirements (1) they must be adopted by the relevant public agency through a public review process to implement, interpret, or make specific the law enforced by the public agency and must reduce or mitigate the project’s incremental contribution of GHG emissions; and (2) the lead agency relying on the plan, regulation or program should explain how implementing its particular requirements ensures that the project’s incremental contribution is not cumulatively considerable. (§ 15064(b)(3).) If there is substantial evidence that the project’s effects are still cumulatively considerable notwithstanding its compliance with the adopted mitigation plan, program, regulations, or requirements, then CEQA requires an EIR for the project. (§§ 15064.4(b)(3), 15064(h)(3).)
Existing CEQA case law tends to require a quantitative – rather than solely qualitative – GHG analysis for significant projects; thus, it has been held that where a project will result in increases of GHG emissions beyond existing (or, perhaps, projected “business-as-usual”) conditions, and a lead agency adopts consistency with AB 32’s general statewide reduction target as its threshold of significance, quantification of the amounts of GHGs that will be emitted and mitigated will be required in order to pass CEQA muster. (See, e.g., Friends of Oroville v. City of Oroville (2013) 219 Cal.App.4th 83 [failure to properly quantify or measure proposed project’s GHG emissions and reductions expected to be achieved by mitigation measures so as to demonstrate compliance with AB 32 threshold of significance standard rendered EIR analysis inadequate].)
Executive Order B-30-15 States A New And Stricter Statewide GHG Reduction Target For Year 2030
Governor Brown’s April 29 Executive Order B-30-15 (the “BEO”) states a new statewide policy goal to reduce GHG emissions 40 percent below their 1990 levels by 2030. The Governor’s Office website’s statement accompanying the BEO calls this “the most aggressive benchmark enacted by any government in North America to reduce dangerous carbon emissions over the next decade and a half.” (Emph. added.) It adds: “This executive action sets the stage for the important work being done on climate change by the Legislature.” Noting that the BEO aligns California’s GHG emissions targets with those of “leading international governments,” including the “28-nation European Union . . . [which] set the same target for 2030 just last October[,]” the statement asserts that while California is currently “on track” to meet AB 32’s 2020 reduction goal (i.e., reduction to 1990 levels), the “new emission reduction target of 40 percent below 1990 levels by 2030 will make it possible to reach the ultimate goal of reducing emissions 80 percent under 1990 levels by 2050. This is in line with the scientifically established levels needed in the U.S. to limit global warming below 2 degrees Celsius – the warming threshold at which scientists say there will likely be major climate disruptions such as super droughts and rising sea levels.”
The BEO incorporates the substance of the above-quoted statements as “whereas” recitals, stating, among other things, that “remaining below this [2 degrees Celsius] threshold requires accelerated reductions of greenhouse gas emissions[,]” that “California has established [GHG] emission reduction targets to . . . reduce emissions to 80 percent below 1990 levels by 2050[,]” and that “setting an interim target of emissions reductions for 2030 is necessary to guide regulatory policy and investments in California in the midterm, and put California on the most cost-effective path for long-term emissions reductions[.]” In its operative section, the BEO states California’s targets as 40 percent below 1990 levels by 2030 and 80 percent below 1990 levels by 2050, and orders “[a]ll State agencies with jurisdiction over sources of [GHG] emissions [to] . . . implement measures, pursuant to statutory authority, to achieve reductions of [GHG] emissions to meet the 2030 and 2050 [GHG] emissions reductions targets.” It directs CARB to “update the Climate Change Scoping Plan to express the 2030 target in terms of million metric tons of carbon dioxide equivalent.” It directs the Natural Resources Agency to update “Safeguarding California” (the State’s climate adaptation strategy) every three years, as specified; directs state agencies to “take climate change into account in their planning and investment decisions, and employ full life-cycle cost accounting to evaluate and compare infrastructure investments and alternatives”; and orders the “state’s Five-Year Infrastructure Plan [to] take current and future climate change impacts into account in all infrastructure projects.” Among its other directives, the BEO provides that “[s]tate agencies’ planning and investment shall be guided by the . . . principle[ ] [that] [p]riority should be given to actions that both build climate preparedness and reduce [GHG] emissions[.]”
The substantive portion of the BEO concludes by stating: “This Executive Order is not intended to create, and does not create any rights or benefits, whether substantive or procedural, enforceable at law or in equity, against the State of California, its agencies, departments, entities, officers, employees, or any other person.”
What Is The Executive Order’s Legal Status And How Will it Impact CEQA’s “Usual Rules” For Analyzing An Individual Project’s GHG Emissions?
The BEO sets an ambitious new Statewide GHG emissions reduction target of 40% below 1990 levels by 2030 as a “mid-term” benchmark needed to achieve what is characterized as the State’s reduction goal of 80% below 1990 levels by 2050. But this new goal – despite the Governor’s office’s interesting statements using the term “enacted” – issues not from the Legislature or even CARB (at least not yet), but from the State’s executive officer, Governor Brown. As such, what is its status and legal impact? How will it affect the CEQA analysis of GHGs required for non-exempt discretionary projects approved or undertaken by all types by local, regional and state agencies throughout California?
There are no clear answers to these questions. Under the existing CEQA Guidelines discussed above, the BEO, standing alone, does not appear to constitute a regulation or requirements in or adopted to implement a statewide, regional or local plan for the reduction of GHG emissions that a lead agency could rely on as such to mitigate GHG impacts. It clearly states a bold new policy goal, and cites evidence that it is based on the best current science, but the BEO was not adopted to implement, interpret or make specific a law that is currently in force and enforced by any public agency. (Compare CEQA Guidelines, §§ 15064.4(b)(3), 15064(h)(3).) Further, (1) for CEQA purposes, the Governor is not a “public agency,” but, rather, an official or an individual (Picayune Rancheria of Chukchansi Indians v. Edmund G. Brown, Jr. (3rd Dist. 2014) 229 Cal.App.4th 1416), rev. den. 1/14/15; (2) the BEO is not a law or regulation establishing or implementing a GHG plan adopted through any public process; and (3) the legal status and authority of an executive order stating statewide GHG emission goals is itself far from clear – in fact, it is currently under review by the California Supreme Court, which will decide whether the EIR for SANDAG’s regional transportation plan must include an analysis of the RTP’s consistency with the year 2050 GHG emission reduction goals of Governor Schwarzenegger’s seminal 2005 Executive Order No. 5-3-05 in order to comply with CEQA. (See “Supreme Court Will Review CEQA Decision Invalidating SANDAG’s 2050 RTP,” by Arthur F. Coon, posted March 12, 2015.)
It appears that under the “usual rules” a lead agency could – through the law currently does not compel it to – determine voluntarily in the exercise of its “careful judgment” to apply the BEO’s newly-stated GHG reductions target as a threshold of significance against which to measure an individual project’s GHG/climate change impacts. (CEQA Guidelines, §15064.4(a),(b)(2).) The BEO cites to substantial expert evidence – e.g., the work of the Intergovernmental Panel on Climate Change – in support of its reduction targets; however, the state, regional or local lead agency would still have to translate the statewide targets into a consistent and appropriate project specific threshold, taking into account the type of project under review and that required GHG reductions occur unevenly over various sectors of the economy such as transportation, energy generation, industrial and manufacturing operations, new construction, and various types of stationary and operational sources. “Expert” regulatory agencies, such as the various air quality management districts throughout the state, have already set thresholds of significance for GHG emissions in many cases – and are probably in a better position than most local agencies in terms of the “expertise” required to translate (through their adoption of regulations) state policy on these scientific and technical issues into quantified project-specific significance thresholds for various regions.
In any case, it appears that state GHG policy and science are both continuing to evolve rapidly, and that relevant laws – e.g., CEQA and its regulations – are struggling to keep pace. While many questions remain without definitive answers, CEQA’s “usual rules” continue to give lead agencies discretion to adopt project-specific significance thresholds for GHG emissions in the exercise of their “careful judgment,” subject to review for substantial evidence support. However, in light of the Supreme Court’s grant of review in Cleveland National Forest Found. v. San Diego Assn. of Govts. (4th Dist. 2014) 231 Cal.App.4th 1056, rev. gtd. 3/11/15 (Case No. S223603) the legal effect and impact of executive orders (such as the BEO) on a lead agency’s required CEQA analysis of GHGs appears wholly unsettled. In light of the Supreme Court’s grant of review in Biological Diversity v. Department of Fish and Game (2d Dist. 2014) 224 Cal.App.4th 1105, rev. gtd. 7/9/14 (Case No. S217763), the application of CEQA’s “usual” baseline rule to GHG analysis – i.e., use of the “existing conditions” environmental setting vs. projected “business as usual” emissions as the measuring stick – also appears to be unsettled.
In sum, GHGs are, by their very “global” nature, unlike “normal” (i.e., more localized) cumulative impacts, and it may be that their analysis under CEQA will require something different than the “usual rules.” It seems that along with evolving policies and science have come significant litigation, uncertainties and unresolved issues surrounding GHG analysis under CEQA. Interested parties are advised to carefully monitor judicial, legislative, regulatory and executive branch developments. To avoid vulnerabilities in litigation to the extent possible, lead agencies preparing GHG analyses in EIRs and negative declarations would be well advised to employ a highly conservative approach, including a robust analysis comprehensively describing the current legal, scientific and policy climate surrounding GHG impacts – including the BEO.
Questions? Please contact Arthur F. Coon of Miller Starr Regalia. Miller Starr Regalia has had a well-established reputation as a leading real estate law firm for fifty years. For nearly all that time, the firm also has written Miller & Starr, California Real Estate 3d, a 12-volume treatise on California real estate law. “The Book” is the most widely used and judicially recognized real estate treatise in California and is cited by practicing attorneys and courts throughout the state. The firm has expertise in all real property matters, including full-service litigation and dispute resolution services, transactions, acquisitions, dispositions, leasing, construction, management, title insurance, environmental law, and redevelopment and land use. For more information, visit www.msrlegal.com.