June 23, 2008

California Establishes Ground Rules for Assessing Climate Change Impacts for Development Projects

Holland & Knight Alert
Jennifer L. Hernandez

On June 19, 2008, the Governor’s Office of Planning and Research (OPR) released a Technical Advisory explaining how impacts and mitigation measures from climate change and “greenhouse gas” (GHG) emissions should be addressed in environmental impact reports prepared for residential, commercial and industrial development and other projects under the California Environmental Quality Act (CEQA). This guidance will likely influence environmental impact analyses prepared under the National Environmental Policy Act (NEPA) and similar state statutes.
The new guidance expands on existing California climate change legislation aimed at enforcing GHG reductions (AB 32), and requiring consideration of GHG issues in environmental analysis documents for a broad spectrum of projects (SB 97).

The Advisory begins by providing a background on the science of climate change and how it arises in the CEQA context. CEQA does not prescribe thresholds of significance for any given environmental impact; instead, the statute encourages public agencies to adopt their own thresholds. This determination presents a particular challenge in the framework of a climate change analysis, where science continues to evolve and effects are measured on a global scale. As a result, OPR has asked the Air Resources Board (ARB) technical staff to recommend a method for setting thresholds that will encourage a consistent approach statewide. In the meantime, this Advisory provides informal guidance for lead agencies attempting to make and mitigate a GHG threshold of significance determination.

The Advisory recommends a three-step approach to CEQA analysis of GHG emissions:

  1. Mandatory Quantification of GHG Project Emissions

    The environmental impact analysis must include quantitative estimates of CO2 and GHG emissions from different types of air emission sources within the broad range of residential, commercial, industrial and other types of projects. These estimates should include both construction-phase emissions, as well as completed operational emissions, using one of a variety of available modeling tools. This analysis may be located in one or more typical sections of the EIR, including air quality, transportation, energy, or a separate section on climate change.
  2. Continued Uncertainty Regarding “Significance” of Project-Specific GHG Emissions

    Each agency preparing the environmental assessment document is obligated to assess the significance of the project’s impacts on climate change (even in the absence of any significance threshold set by any air quality agency). As a practical matter, many agencies have been concluding that “small” projects do not warrant quantitative GHG impact assessments; OPR has not endorsed or helped define any such “small” category. Additionally, many agencies have been concluding that they lack the scientific expertise to decide whether project-specific GHG emission impacts are “significant,” but given existing climate change conditions, have been concluding that larger projects may or do cause significant cumulative impacts in relation to climate change. Likewise, OPR’s guidance does not endorse this practice but it does acknowledge that there is uncertainty and also encourages agencies to rely on the evolving guidance being developed in this area. OPR’s guidance also makes clear that the environmental analysis must describe a “baseline” of existing (pre-project) environmental conditions, and then add project GHG emissions onto this baseline to evaluate whether impacts are significant. This “baseline” directive is a clear rejection of arguments that GHG emissions are driven more by population than particular project.
  3. Menu of Mitigation Measures

    OPR also identifies a menu of GHG emission mitigation measures, ranging from balanced “mixed use” master-planned project designs to construction equipment and material selection criteria and practices. Legally, mitigation may only be required for “significant” impacts. But the ongoing technical and corresponding legal uncertainty regarding when GHG emissions are “significant” for a particular project has, as a practical matter, resulted in many projects adopting GHG mitigation measures to minimize GHG emissions and strive for “carbon neutrality.” OPR raised the legal bar on this practice by including a pointed reminder that “all feasible” mitigation measures or project alternatives must be adopted if an impact is significant, defining feasibility in relation to scientific, technical and economic factors. If mitigation measures cannot sufficiently reduce project impacts, the agency should adopt whatever measures are feasible and issue a detailed, fact-based Statement of Overriding Concerns explaining why additional mitigation is not feasible.

Additional Advisory Recommendations
In addition to this three-step process, the Advisory contains more general policy-level guidance. It encourages agencies to develop standard GHG emission reduction and mitigation measures. The Advisory also recommends that agencies consider land use strategies that address GHG emissions on a broad scale. Local governments may use their general plans to encourage reductions in GHG emissions, while regional and state-level agencies can adopt policies that take climate change into account. Agencies may also look to national and international organizations which have published guidance materials, including land use techniques and suggestions for municipal operations. The Advisory contains a list of technical resources and Web links to agencies and organizations that offer reference materials and information regarding methods to characterize, quantify, assess and reduce GHG emissions.
Going forward, OPR expects ARB to recommend a method for setting the GHG emission threshold of significance, including both qualitative and quantitative options. The Advisory also requests input from interested parties and invites them to attend a series of public workshops on the development of a new regulatory standard for GHG emissions, which OPR is obligated to establish by July 1, 2009.
This guidance will be significant in the context of CEQA in California, as well as for NEPA and other NEPA-like statutes across the country. It is notable that California requires analyses of GHG emissions earlier and more comprehensively at a project-specific level under the CEQA process, while the more traditional programmatic, cost-benefit approach to air quality rulemaking required by AB 32, California’s signature climate change law, lags behind.
Link to Web page containing the Technical Advisory: http://opr.ca.gov/index.php?a=ceqa/index.html 
We will continue to keep you informed of any further developments.

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