The Center for Biological Diversity et al., v. California Department of Fish and Wildlife, and The Newhall Land and Farming Company, 62 Cal.4^th 204 (2015)(hereafter, the Newhall Land case) addresses three issues: 1) whether the project level environmental impact report (EIR) validly determined that the development would not significantly impact the environment by its discharge of greenhouse gases (GHGs)?; 2) Were the mitigation measures adopted for the protection of a freshwater fish, the unarmored threespine stickleback, improper because they involved taking of fish prohibited by the Fish and Game Code?; and 3) Were plaintiff’s comments on two other areas of disputed impact submitted too late in the environmental review process to exhaust their administrative remedies under Public Resources Code section 21177?   This post will only address the first question through an analysis of the Courts review of the project level EIR significance determination for GHGs under CEQA.

The Newhall Land case illustrates the difficulty of complying with statewide GHG reduction targets at the local level using a procedural environmental review mechanism (the California Environmental Quality Act (CEQA)) to determine whether an individual project’s GHG emission will, when understood cumulatively, create a significant environmental impact triggering an environmental impact review (EIR), mitigation, and/or statement of overriding consideration. Because CEQA is procedural and operates through lead agency discretion, AB 32 (2006) and its Scoping Plan create non-enforceable targets and recommendations for local governments, and little guidance, track record, or consensus exists for a standard to make GHG significant determinations at the project level, lead agencies and local governments are left to struggle with creating a defensible significance analysis and all the legal exposer. There is a need to create consensus around baseline and project level methodology for CEQA significance determinations to connect project level GHG emission impacts and mitigations with statewide and local GHG reduction targets.

Case Facts and Procedural History

The Newhall Ranch is to be developed over approximately 20 years on nearly 12,000 acres along the Santa Clara River west of the City of Santa Clarita in Los Angeles County. The proposed development would include up to 20,885 dwellings (approximately 58,000 residents), commercial and business use, schools, golf courses, parks and other community facilities.

The California Department of Fish and Wildlife (DFW) and the U.S. Army Corps of Engineers (the Corps) prepared a joint impact statement/EIR for two natural resource plans (the Resource Management and Development Plan and the Spineflower Conservation Plan) and drew upon a 2003 Los Angeles County environmental impact study but maintained an independent analysis for its own approvals. DFW acted as the leading agency under CEQA because of required streambed alterations agreements and issuance of incidental take permits for protected species. DFW attempted to evaluate all environmental impacts from the project despite only having direct authority over biological resource impacts. DFW and the Corps issued a draft EIR in April 2009 and final EIR in June 2010. In December 2010, DFW certified the EIR, made findings required by CEQA regarding significant impacts, mitigation, alternatives, and overriding considerations, and approved the project. Relevant to this post, DFW found that GHG emission would have less than a significant impact on global climate when accounting for the applicant’s design commitments and existing regulatory standards.

Plaintiffs challenged DFW’s actions by a petition for writ of mandate. The trial court granted the petition on several grounds, but the Court of Appeal reversed, rejecting all CEQA claims. The California Supreme Court granted plaintiffs’ petition for review to determine whether the agency prejudicially abused its discretion by 1) not proceeding in a manner required by law or 2) made a determination or decision not supported by substantial evidence. (Public Resources Code Section 21168.5).

The Court reviewed the Newhall Land case de novo addressing only the agency’s decision, not the trial courts decision.   Under a de novo review, the court’s standard of review depends on whether the claim is predominately for an improper procedure or a dispute over facts. Determination of correct procedure is de novo while greater deference is granted for an agency’s substantive factual conclusions. A court will not set aside an agency’s EIR approval on the grounds that an opposite conclusion is reasonable but will determine whether substantial evidence existed in the record for the findings and approval.

Use of the California Air Resources Board’s (CARB) 2008 Scoping Plan’s Business-as-Usual Emission Projection as a Baseline for CEQA Significant Impact Determination

DFW used CARB’s business-as-usual emission projection from its 2008 Scoping Plan implementing AB 32 (2006) for its significance of impact analysis. The business-as-usual projection calls for a 30 percent reduction in projected business-as-usual 2020 emission levels to reduce emissions to 1990 levels.   CARB identified 1990 levels of approximately 427 million metric tons of carbon dioxide equivalent (MMTCO₂E) and a 2002-2004 estimated annual emissions of 469 MMTCO₂E that were then projected out to 2020 using population and economic growth projections totaling 596 MMTCO₂E. The 1990 value of 427 MMTCO₂E is approximately 29% below the 2020 forecast of 596 MMTCO₂E giving CARB its 30% reduction target.

AB 32 and CARB’s Scoping Plan do not set out a mandate or method for GHG CEQA analysis for a proposed project. The only guidance comes from the SB 97 (2007) amendment to CEQA that required the preparation, adoption, and periodic updated of guidelines for mitigation of GHG impacts (See Public Resources Code Section 21083.05). In 2010, the Natural Resources Agency adopted a new CEQA Guidelines on Determining the Significance of Impacts from GHGs under California Code Regulations, Title 14, Section 15064.4.   Guidelines Section 15064.4 grants discretion to a lead agency in how to calculate GHG emissions providing that “[a] lead agency should make a good-faith effort, based to the extent possible on scientific and factual data, to describe, calculate or estimate the amount of greenhouse gas emissions resulting from a project.” (Guidelines, Section 15064.4(a)). A lead agency should consider the following factors, among others, in its significance analysis:

(1) The extent to which the project may increase or decrease greenhouse gas emissions as compared to the existing environmental setting;

(2) Whether the project emissions exceed a threshold of significance that the lead agency determines applies to the project[;]

(3) The extent to which the project complies with regulations or requirements adopted to implement a statewide, regional, or local plan for the reduction or mitigation of greenhouse gas emissions. Such requirements must be adopted by the relevant public agency through a public review process and must reduce or mitigate the project’s incremental contribution of greenhouse gas emissions. If there is substantial evidence that the possible effects of a particular project are still cumulatively considerable notwithstanding compliance with the adopted regulations or requirements, an EIR must be prepared for the project. (Guidelines, Section 15064.4(b).

With this guidance, DFW’s EIR attempted to quantify the existing emissions and future emissions once fully developed. The EIR found that existing emissions from the property totaled approximately 10,272 metric tons of CO₂ annually, which was conservatively treated as zero for impact analysis. The EIR calculated a full build out to be 269,053 metric tons of CO₂ equivalent (MTCO₂E) annually.   From this, the EIR found that while there was a change to existing, on-site conditions there was insufficient support for a significance determination in light of the global nature of climate change and the absence of scientific and factual consensus on the significance of a particular amount of GHG emissions from a project.

The EIR then considers whether the proposed project’s emissions would impede emissions reductions under AB 32. The EIR used the same method as the Scoping Plans business-as-usual emission projection. The EIR estimated that the full build out would produce 390,046 MTCO₂E in 2020 under a business-as-usual projection in which no additional regulatory actions were taken to reduce emissions. The EIR found that the proposed project will not impede achievement of AB 32’s goals and was therefore not significant because the actual annual project emissions is 31% below its business-as-usual estimate exceeding CARB’s 29% reduction target. The Court analysis then transitioned to determining if the DFW abused its discretion in relying on CARB’s AB 32 reduction goals as its significance criterion.

The Court found that DFW did not abuse its discretion by using the statewide reduction goals of 29% as its significance criterion as compared to a numerical value. The Court framed its discussion in terms of the sufficiency of using efficiency and conservation methods based on statewide efforts – as comparable to simple numerical threshold – where a project’s impacts were analyzed for “whether the project’s incremental addition of greenhouse gases is ‘cumulatively considerable’ in light of a global problem, and thus significant” and the impacts are “global rather than local.” (Newhall Land case, at 219-220.) Use of efficiency and conservation serve as the basis of land use and transportation GHG reductions under the Scoping Plan (as well as the basis of local government authority) and comply with CEQA because “CEQA is not intended as a population control measure.” (Ibid. at 220.) In other words, CEQA assumes growth and efficiency and conservation can be used to solve the cumulative problem of GHG emissions. Additionally, the Court noted that because there is no iron-clad definition of significance and Guidelines Section 15064.4 provides discretion (furthered by the fact that neither AB 32 nor the CARB Scoping Memo set regulations for individual project GHG emission reductions), DFW’s use of this criterion did not violate CEQA.

However, the Court held that DFW abused its discretion in finding that the project’s GHG emissions would have no cumulative significant impact on the environment. The Court based this determination on the fact that the administrative record lacked any substantial evidence that the Newhall Ranch’s project-level 31% reduction in comparison to the business-as-usual was consistent with achieving AB 32’s statewide goal of a 30% reduction from business-as-usual. The Court further found that the EIR failed to support its no significant impact finding even when the EIR used its own significance criterion. The Court noted that:

• The Scoping Plan does not provide a percentage of reduction that would be required by an individual project to achieve the overall statewide reduction;
• the administrative record failed to provide substantial evidence generally or provide expert opinion based on substantial evidence to explain why the percentage reduction from business-as-usual of a new residential or mixed used individual project would be the same or comparable to the entire state population and economy without any adjustment or changes for residential density for the Santa Clarita Valley average or indirect sources such as related transportation GHG emissions; and
• Quantitative comparison methods from a statewide GHG emission reduction effort do not measure the efficiency and conservation measures incorporated in a specific land use development proposed for a specific location.

Such deficiencies deprived the EIR of its sufficiency as an informative document which is also why the Court found the EIR conclusion prejudicial for depriving the public and decisions makers substantial relevant information about the project’s likely impacts and potential mitigation.

Potential Options to Evaluate Cumulative Significance of a Proposed Land Use Development’s GHG Emissions

The Court moved to suggest – without any guarantee of sufficiency of CEQA compliance – several options to evaluate cumulative significance at the project level.

The options are listed below:

1. The lead agency determination of what level of GHG emission reduction from business-as-usual projection that a new land development at the proposed location would need to achieve to comply with statewide goals upon examination of data behind the Scoping Plan’s business-as-usual emission projections. The lead agency must provide substantial evidence and account for the disconnect between the Scoping Plan and an analysis of an individual project’s land use emissions (the same issues with CEQA compliance addressed in this case);
2. The lead agency may use a project’s compliance with performance based standards – such as high building efficiency – adopted to fulfill a statewide plan to reduce or mitigate GHG emissions to assess consistency with AB 32 to the extent that the project features comply with or exceed the regulation (See Guidelines Section 15064.4(a)(2), (b)(3); see also Guidelines Section 15064(h)(3)). A significance analysis would then need to account for the additional GHG emissions – such as transportation emissions – beyond the regulated activity. Additionally, the lead agency may use a programmatic effort including a general plan, long range development plan, or a separate plan to reduce GHG emissions (such as Climate Action Plan or a SB 375 metropolitan regional transportation impact Sustainable Communities Strategy) that accounts for specific geographical GHG emission reductions to streamline or tier project level CEQA analysis pursuant to Guidelines 15183.5(a)-(b) for land use and Public Resources Code Section 21155.2 and 21159.28 and Guidelines Section 15183.5(c) for transportation.
3. The lead agency may rely on existing numerical thresholds of significance for GHG emissions (such as the Bay Area Air Quality Management District’s proposed threshold of significance of 1100 MTCO₂E in annual emission for CEQA GHG emission analysis on new land use projects). The use of a numerical value provides what is “normally” considered significant but does not relieve a lead agency from independently determining the significance of the impact for the individual project (See Guidelines Section 15064.7).

These options are not exclusive and serve to provide the procedural mechanism for CEQA compliance without a substantive conclusion on how a local jurisdiction or lead agency should address project level GHG reductions.

The Need for Standardization and Consensus

When reviewing the three options described by the Court, the need for standardization around regional or statewide consensus for both baseline significance analysis and analysis of cumulative GHG emission impacts from individual projects become apparent to not only provide clear guidance but to prevent continued CEQA litigation against individual projects. Because of how authority over land use applies in California, the applicable lead agencies and local governments must lead such an effort.

It is possible to determine at what level of reduction from business-as-usual a new land development at the proposed location must achieve to comply with statewide goals upon examination of data behind the Scoping Plan’s business-as-usual projection, per the Court’s first suggested option. To be most defensible, a regional consensus based on specific geographical areas may be developed to provide both a baseline and mechanism of analysis for significance at the project level. This could include the three elements that compose the Court’s second option by utilizing existing state regulatory performance based standards for applicable project features combined with general plan, climate action plan, and/or sustainable communities strategies to cover the additional GHG emission impacts (assuming such plans or strategies exist or have been adopted). This concept assumes that the baselines and methodologies of each jurisdiction (whether city, county, joint power authority, metropolitan planning organization, or other applicable entity) are actually similar and therefore comparable. This again emphasizes the need for consensus around GHG emission impact analysis at the state, regional, county, and city level to connect the dots between an individual project’s emissions and statewide and local GHG reduction goals. A recent post addresses a similar issue. Such a consensus may utilize the third option, a numerical value, or use efficiency and conservation analysis to determine whether a project’s cumulative GHG emissions would have significant environmental impacts under CEQA.

To date, no consensus exists in light of the different basis of authority over land use (and therefore the limits of that authority) and how CEQA operates. The Governor’s Office of Planning and Research issued a draft General Plan Update in October of 2015 that includes a short section on Climate Change (see Chapter 8) but does not address these ongoing issues around general plans, projects, and GHG reduction analysis. This means that the courts are left to deal with the issue leaving lead agencies and local jurisdiction exposed to uncertainty and the cost of litigation. From the existing decided cases, no real consensus exists about how to analyze project level GHG reductions to connect the dots to statewide goals. There also appears to be a growing number of cases settled out of court, which prevents new understanding or guidance.

Disclaimer: The materials included in this post are intended for informational purposes only and not for the purpose of providing legal advice in any particular case or matter.   Use of or reliance on this material does not create an attorney-client relationship between the Energy Policy Initiatives Center and the reader. Individuals or entities should consult their own counsel before taking any action on any particular case or matter.