United States: Lack Of Court Direction Requires Developers And Lenders To Estimate Their Own Significance Thresholds For GHG Emissions Past 2020

This June, the California Supreme Court heard the last set of oral arguments before breaking for the summer. Cleveland National Forest Foundation v. San Diego Association of Governments, 231 Cal.App.4th 1056 (2014) ("Cleveland National") – a fully briefed (and closely watched) case related to an appropriate benchmark for greenhouse gas ("GHG") emission reduction goals past 2020 – was not heard. This means September 2016 is the earliest Cleveland National will be scheduled for a hearing, and for now, the court will not decide whether an Environmental Impact Report ("EIR") under the California Environmental Quality Act ("CEQA") must consider gubernatorial executive orders seeking to further reduce GHG emissions beyond 2020. As discussed below, the lack of certainty in this area requires additional thought and planning by developers, as well as by lenders, on major projects with significant GHG emission impacts.

The court's inaction this term on Cleveland National means that no state law is currently setting GHG emission reduction goals beyond 2020. Without such goals in place, project developers, lenders and public agencies will need to estimate what they believe will be an appropriate GHG reduction goal beyond 2020, if the environmental review is going to rely on state policy in assessing the project's impacts from GHG emissions under CEQA Guidelines section 15064.4(b)(3). For complex project planning purposes, the year 2020 is just around the corner, and preparation of an EIR for some projects could easily push just the project approval process itself into 2018 or 2019, especially for projects just now seeking permits. GHG emissions from those projects would of course continue beyond 2020. Given this reality, project developers and lead agencies would be prudent to consider applying Executive Order B-30-15's GHG reduction target of 40 percent below 1990 levels by 2030, and/or Executive Order S-3-05's target of 80 percent below 1990 levels by 2050, depending on the size and life of the project. Applying such targets would minimize risk of challenges to the environmental review because these targets are the most aggressive. Moreover, the state legislature will likely approve some GHG reduction goals beyond 2020 that further reduce emissions below 1990 levels.

Please download the full Alert below to view our in-depth discussion of these topics.

Client Alert 2016-166

This article is presented for informational purposes only and is not intended to constitute legal advice.

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