California formally established its greenhouse gas (GHG) emission reduction goal as 40% below 1990 levels by 2030 when Governor Brown signed SB 32 and AB 197 last week. He had previously called for this target in an Executive Order, but SB 32 cements the mandate with legislative support. AB 197 establishes more legislative oversight over the California Air Resources Board (CARB), the agency charged with implementing both AB 32 over the past decade (which called for reducing the state’s GHG emissions to 1990 levels by 2020) and developing policies to meet the much more ambitious SB 32 target of 40% below 1990 levels. This will require steeper, faster reductions to meet the deeper targets of SB 32.
AB 197 also requires CARB to address the environmental justice ramifications of GHG reductions by prioritizing GHG reductions in areas “to protect the state’s most impacted and disadvantaged communities” by considering “the social costs of the emissions of greenhouse gases.” This will alter how CARB implements SB 32 between now and 2030. It will directly affect the CARB Scoping Plan for SB 32 implementation and how CARB regulates GHG emissions so that the co-pollutants of GHG are also reduced to protect the disadvantaged.
SB 32 and AB 197 have been adopted against the backdrop of SB 350, which was passed by the legislature and signed into law by Governor Brown in 2015. SB 350 calls for an ambitious expansion of the state’s Renewable Portfolio Standard (RPS) to 50% by 2030 (versus 33% by 2020 under previous law) and a doubling of the rate of energy efficiency improvements by 2030. The lead agencies implementing SB 350 are the California Public Utilities Commission (CPUC) for the RPS and the California Energy Commission (CEC) for the energy efficiency standards (although both agencies also have important roles in coordinating with each other on both tasks). The CARB Scoping Plan under SB 32 will account for the RPS expansion and energy efficiency improvements called for in SB 350, while the CPUC and CEC are required to ensure that their policies reduce GHG emissions rather than simply increase renewable electricity generation. Together, the three bills will guide all three agencies to develop what I call “Climate Law 2.0” over the next year or two to guide investment and regulation over the coming decade or more.
But there is another state law that is affected by SB 350, SB 32, and AB 197: the California Environmental Quality Act (CEQA). CEQA, which dictates how state and local agencies evaluate the environmental impacts of public works projects or discretionary regulatory decisions (such as General Plan amendments and rezoning actions), requires that projects mitigate their environmental impacts so that they are less than significant. For GHG emissions, the “significance” threshold has generally been determined based on whether a project’s emissions are consistent with CARB’s policies compared to the “business as usual” (BAU) emissions. The California Supreme Court threw a wrench in that approach last fall in Center for Biological Diversity v. Department of Fish and Wildlife 62 Cal.4th 204 (Nov. 30, 2015) by requiring CEQA documents to analyze and support a closer link between a project’s particular GHG emission impacts, the CARB Scoping Plan, and the AB 32 goals compared to BAU. AB 32 called for a 29% reduction in emissions compared to BAU, but SB 32 now calls for a further 40% reduction compared to 1990 and 2020 levels—but, in state that is projected to grow to 44 million people and with an economy that will expand by 50% by 2030, the actual reduction compared to BAU will be much more (before CARB accounts for SB 350 as part of BAU).
The more aggressive targets of SB 32 will now affect every project that has to go through CEQA review—and many of the mitigation measures that projects have relied upon, such as rooftop solar or improved water and energy efficiency in buildings, will now be part of BAU under SB 350. The result will be increased attention to transportation-related mitigation measures that could alter the patterns and density of land use projects that can meet the new CEQA standard.
These changes have the potential to affect all development in California in profound ways. I’ll discuss the relationship between GHGs, CEQA, transportation, and land use in the future.