WALNUT CREEK, CA-GlobeSt.com chats with Christopher Calfee of counsel in the environmental and natural resources practice group of Best Best & Krieger LLP’s Walnut Creek and Sacramento offices about planning for development certainty in a quickly changing climate and about making the most out of recent changes in the State CEQA Guidelines.

Dolce: Tell me a bit about the Global Warming Solutions Act of 2006 and the Sustainable Communities and Climate Protection Act of 2009, because I know the development landscape changed as a result of those, and I know there is a new set of climate regulations were enacted this year as well.

Calfee: The Global Warming Solutions Act of 2006, commonly known as AB32, does not directly regulate real estate development. Shortly after its passage, however, the development landscape quickly changed as new projects were challenged in court for not incorporating climate change considerations into the environmental review process. Project proponents soon rushed to highlight the green credentials of their projects, but a lack of statewide standards and inconsistent local responses to climate change policies injected unwelcome uncertainty into the development process. The Sustainable Communities and Climate Protection Act of 2008 (SB375) offers some relief by exempting certain types of mixed use projects that would be consistent with a regional “Sustainable Communities Strategy” from some of the more onerous environmental review requirements. It will still be several years though before such strategies are adopted in some of our most populous regions. Even then, the promised exemptions may apply to only a narrow category of projects.

Beyond the AB32 and SB375 hype, a separate set of climate change regulations were enacted just this year that could provide just the certainty necessary to facilitate future development.  Major amendments to guidelines implementing the California Environmental Quality Act, widely known as CEQA, went into effect in March requiring public agencies to analyze and mitigate the effects of their projects’ greenhouse gas emissions. In a nutshell, before any public agency can adopt almost any type of project, the environmental review for that project must study the magnitude of the project’s direct and indirect greenhouse gas emissions, decide whether and how those emissions may harm the environment, and implement measures to mitigate those emissions. While analyzing a project’s greenhouse gas emissions is a complicated task, those regulations also provide a streamlining tool for communities that have adopted a climate action plan or similar policy for reducing community-wide greenhouse gas emissions.  Under the new CEQA Guidelines, projects that are consistent with a community greenhouse gas reduction plan can skip the complicated analysis.  In other words, the agency will not have to reinvent the wheel for each new project that is proposed.

Dolce: What goes into a climate action plan?

Calfee: One of the major plan elements is a reduction target. Unlike the SB375 targets, which are mandated by the State Air Resources Board, emissions reduction targets in a local climate plan are set by the local community, based on local conditions. Once potential future emissions are calculated, the next piece of the plan is to identify ways to reach the reduction target. This is the part that will interest developers. A well-designed plan will spell out exactly how emissions reductions will be achieved (i.e., through energy efficiency standards, solar requirements, urban forestry projects, programs for efficiency upgrades, etc.). This benefits potential developers in at least two ways.  First, the types of exactions and mitigation measures that may be required will be known up front.  Second, such plans can also achieve emissions reductions from existing sources, so that the entire burden does not have to be shouldered by new development.

Dolce: How many communities actually have such plans? 

Calfee: More than you might think. The Governor’s Office of Planning and Research further reports that, as of 2008, more than 70 cities and counties had developed general plan policies and programs addressing climate change. More are likely to come, since each of the major air districts that has tried to develop greenhouse gas thresholds has recognized that projects that are consistent with qualified plans should not have to engage in further analysis. Such plans can be included in a local general plan or can be adopted as a stand-alone policy document. While the updated CEQA Guidelines set out criteria for what such plans should contain, communities have tremendous flexibility in developing a plan that suits local conditions and priorities.

Dolce: So does this mean that some developers might sit on the sidelines while things get worked out?

Calfee: Yes, some local agencies and developers might still be tempted to sit on the sidelines while questions about AB32 and SB375 get worked out. There are very good reasons to partner with local agencies in the development of such climate plans now, however. First, even if Proposition 23, the proposal to suspend AB32, were passed by the voters in November, it would not insulate projects from CEQA compliance. It would only suspend the provisions of the Health and Safety Code added by AB32 and climate change would remain a CEQA issue. Second, a sustainable community’s strategy developed under SB375 is only required to address greenhouse gas emissions from transportation. Unless a project is completely exempt from CEQA review, even a project that is consistent with a sustainable community’s strategy may still need to analyze non-transportation greenhouse gas emissions. A local greenhouse gas reduction plan, on the other hand, could address a broader range of sources of greenhouse gas emissions in the community. Finally, because development of sustainable community’s strategies is tied to the regional transportation planning cycle, it will still be several years before most regions have an adopted strategy in place.

Local plans for greenhouse gas reduction can be designed to maximize local public benefits and ease the analysis of new projects under new CEQA rules. More importantly, local governments that develop such plans can achieve greenhouse gas emissions reductions in a way that reflects local concerns, constraints and priorities.  Working with local agencies in the development of such plans will help provide some certainty in an uncertain development climate.