Greenhouse Gas Litigation

The California Environmental Quality Act (CEQA) is a useful tool for citizens and public-interest groups to use to help reduce greenhouse-gas (GHG) emissions. Our Executive Director, Dean Wallraff, has a YouTube Video on CEQA Commenting techniques in general. Here are explanations of two cases in which we were involved—the first one as lead counsel on two related cases, the second as counsel of record. They show how CEQA litigation can be used to help reduce GHG emissions.

Newhall Ranch

Center for Biological Diversity v Department of Fish & Wildlife (2015)
62 Cal.4th 204 (CBD v. CDFW)

On November 30, 2015, the California Supreme Court voided the approval of one of the Environmental Impact Reports for Newhall Ranch, essentially a new city proposed to be built near Santa Clarita, and arguably the largest housing project ever approved in California. One of the main issues in the case was the method by which Newhall Land and Farming Company and Los Angeles County, in the Environmental Impact Report (EIR), determined that greenhouse-gas (GHG) emissions from the Newhall Ranch project would not be “significant,” under California’s principal environmental law, the California Environmental Quality Act (CEQA).

Such a determination makes no sense. When the built environment accounts for over 40% of GHG emissions on the demand side, how can a project that will build 20,000 homes and millions of square feet of commercial space on a 12,000-acre site not have significant GHG impacts? New buildings also have a longer-term effect that is harder to change down the road than other actions that cause GHG emissions now.

The reason that Newhall and other developers want to find, in their EIRs, that their projects do not have “significant” GHG effects is that CEQA requires that significant environmental effects be mitigated to the maximum feasible level. So a significance finding would require Newhall to adopt greener building standards, which would make their buildings more expensive and perhaps reduce their profit margins.

Newhall admitted that their project would annually emit 269,053 metric tons (MT) of CO2 equivalents (CO2E). This is a large amount, significant by any measure. To give the number some scale, it is the equivalent of:

So how did Newhall argue that their new city would not have significant GHG effects? Under CEQA, an agency like Los Angeles County may adopt a significance threshold for each type of environmental impact, as long as it can support the validity of the threshold. For example, the EIR for Landmark Village, the first phase of the Newhall Ranch Development, used the Los Angeles Basin Plan water quality objective of 100 milligrams/liter of chlorides (salt) in the Santa Clara River as a significance threshold for the project’s runoff. Since the project’s storm runoff is projected to have a chloride concentration lower than 100 mg/l, the EIR concluded that the project’s effects on chloride in the river would not be significant, even though the project would add chlorides to the river.

It’s difficult to come up with a good significance threshold for greenhouse-gas emissions. Since, as mentioned above, over 40% of demand-side GHG emissions come from housing, it is good common sense to acknowledge that all new housing will result in “significant” GHG impacts. But adopting zero as a CEQA GHG threshold would be to require developers and agencies to prepare EIRS for every construction project. This would be appropriate for larger developments, say those over 50 homes, but would be an unacceptable burden for smaller developments. Environmentalists would still sue over projects; the legal basis of those suits would shift from significance levels to feasibility of additional GHG mitigation. Developers don’t like this idea because additional mitigation—additional energy efficiency—would reduce their profits.

Another common-sense approach would be to have a standard per-dwelling-unit GHG or energy budget, above which emissions or energy use would be deemed significant under CEQA. It shouldn’t matter to the significance determination whether a thousand homes are built as a single 1000-home project or ten 100-home projects. But larger developments can achieve economies of scale, so they should be held to a higher standard. There could be a sliding scale, under which larger project would have to be more energy-efficient on a per-unit basis.

The best threshold would be net-zero. The California Public Utility Commission’s California Long Term Energy Efficiency Strategic Plan, adopted September 18, 2008, and the New Residential Zero Net Energy Action Plan set a goal that all new residential construction will be zero net energy starting in 2020. This means that residential development will generate on-site as much energy as it consumes, though the homes would be grid-connected. They will give back to the grid, at a different time of day, as much energy as they draw from it. If net-zero were legislatively mandated as a significance threshold, then developers would need to mitigate any GHGs emitted by their projects, to the maximum feasible degree.

But zero is not the currently legally mandated significance threshold. The issue for the County and the developer, in preparing the GHG analysis in the EIR, was to come up with a legally defensible GHG-emissions threshold that wouldn’t be too expensive to meet. Regulatory agencies have proposed or adopted a number of possible thresholds:

In the CBD v CDFW case, the Supreme Court reviewed the GHG significance determination in CDFW’s EIR for the Newhall Ranch Project. The EIR purported to use compliance with AB32 as its CEQA significance threshold. “AB32” refers to the Global Warming Solutions Act of 2006, Health and Safety Code §§ 38500-38599, which calls for a reduction of statewide GHG emissions to 1990 levels by 2020. Under AB32, the Air Resources Board (ARB) developed a plan, the 2008 Climate Change Scoping Plan, which stated that California would need to reduce GHG emissions about 30 percent from business-as-usual (BAU) emissions projected for 2020 in order to meet AB32’s goals. The BAU is what the ARB projected would occur in the absence of any further GHG regulation.

In the Newhall Ranch EIR, Los Angeles County used AB32 as a CEQA significance threshold. They projected that the Newhall Ranch Project would emit 390,046 MT/year if the project were built without any GHG mitigation (BAU), but the mitigation measures Newhall required by the EIR would reduce the Project’s GHG emissions to 269,053 MT/year, a 31% reduction from BAU. Therefore, since this 31% reduction was more than the 30% GHG reductions from BAU the Scoping Plan found to be needed across the board to meet AB32 targets state-wide, the Project’s GHG emissions were were not significant.

The Supreme Court did not buy this claim. They held that using AB32 as a CEQA significance threshold was OK, but that new development probably needed to reduce its emissions more than 30% below BAU, because the County did not show that Newhall’s 31% project-level reduction was consistent with the state as a whole achieving its 30% reduction by 2020. Designing new buildings and infrastructure for maximum energy efficiency and renewable energy use is likely to be easier, and is more likely to occur, than achieving the same savings by retrofitting older structures and systems. Newhall probably needs to reduce its GHG emissions more than 31% below BAU, and needs to show that its reduction is consistent with the state as a whole achieving the AB32 goals.

The Court suggested alternative GHG significance thresholds that may stand up to judicial review:

The Supreme Court also pointed out that we’re nearing the end of the period for which compliance with AB32’s 2020 goals will be an appropriate significance measure. Executive Order No. S-3-05, signed by Governor Schwarzenegger on June 1, 2005, set reduction targets at 80% below 1990 levels by 2050. According to guidelines from the California Air Pollution Control Officers Association, using EO S-3-05 as a threshold would require 90% reduction from BAU, starting immediately.

One of the biggest problems with using AB32 as a CEQA significance threshold lies in determining the BAU scenario for the project. The developer can easily invent some hypothetical version of the Project that would result in far more GHG emissions than the actual Project. That is what Newhall did in this case, an issue that the Court did not address in its opinion. If they can invent a bad enough alternative project, then the features of the project they really want to build will provide enough mitigation to meet whatever threshold is adopted.

As environmentalists, we want CEQA to have teeth, and to help force GHG emissions lower by making developers build more energy-efficient housing. The CBD v. CDFW case should help us. We can hope that Newhall will redesign its project to use less energy instead of inventing another sophistical GHG analysis showing, in their next EIR, that the Newhall Ranch mega-project will not have significant GHG impacts.

Highland Park Transit Village

Friends of Highland Park v. City of Los Angeles (2015)
2015 Cal.App.Unpub LEXIS 8002

Even though it is unpublished, meaning it can’t be cited and used as precedent, this case is important because it shows up errors the City of Los Angeles made in approving a small residential housing project. The Highland Park Transit Village, if it is ever built, will consist of three sites containing a total of 80 dwelling units built as infill next to the Metro Gold Line in Highland Park, part of the City of Los Angeles.

The City’s CEQA approval was in the form of a Mitigated Negative Declaration (MND), in which the City found that the Project’s environmental effects would not be significant, since the developer had agreed to measures that would mitigate those effects to below a significant level.

The environmental documentation admitted that the Project’s GHG effects might be significant without mitigation, but required the following mitigation for those effects: “Only low- and non-VOC-containing paints, sealants, adhesives, and solvents shall be utilized in the construction of the project.” Requiring the use of paints, sealants, adhesives and solvents with low concentrations of volatile organic compounds (VOCs) is good for the environment in that it reduces VOC-related air pollution. But VOCs are not greenhouse gases, so this mitigation measure provided virtually no mitigation for GHGs. It is shameful that the planner assigned to this project knew so little about how buildings can mitigate their GHG impacts that the planner allowed this mitigation measure to be approved.

CEQA requires mitigation if the Project’s GHG impacts are significant. Anything that reduces the Project’s energy consumption, such as better insulation, better sealing of air leaks, more efficient appliances, solar panels, or passive solar construction, would mitigate for GHGs.

In this case, the Court of Appeal held that the MND and supporting documentation were deficient because the record did not contain factual support for the MND’s finding concerning the Project’s GHG effects, and its finding that using low-VOC construction compounds would mitigate those effects.

The City of Los Angeles, since it touts its adherence to principles of sustainability, should, as a policy matter, use its CEQA and project-approval authority to push for more energy-efficient buildings, even if it is not legally required to do so. The planners approving projects in the Dept. of City Planning should be better trained, so that they don’t approve mitigation measures that don’t mitigate, like the ones approved for the Highland Park Transit Village Project.

We hope this case functions as a wake-up call for the City of Los Angeles planners.