In addition to establishing the greenhouse gas (“GHG”) emissions reductions goal of 40 percent below 1990 level by 2030, the recent passage of the California Global Warming Solutions Act of 2006: Emissions Limit (“SB 32”) is relevant to a fully briefed GHG “significance threshold” case pending in the California Supreme Court – Cleveland National Forest Foundation v. San Diego Association of Governments, 231 Cal.App.4th 1056 (2014) (Cleveland National). By enacting SB 32, the state legislature is clarifying the relationship between legislation and gubernatorial executive orders, and signaling that gubernatorial executive orders cannot set state-wide policy on GHG emissions reduction goals unless ratified by the state legislature. This provides additional leverage to the defendant/appellant, San Diego Association of Governments (“SANDAG”), in the Cleveland National case to argue that it did not abuse its discretion by omitting from an environmental impact report (“EIR”) an analysis of whether the region’s transportation was consistent with Executive Order S-3-05 (2005) (“S-3-05”), which set a GHG emissions reduction goal for 2050.

As discussed in our previous client alert, “Lack of Court Direction Requires Developers and Lenders to Estimate Their Own Significance Thresholds for GHG Emissions Past 2020,” dated July 5, 2016, the main issue in Cleveland National is whether an EIR for a regional transportation plan must include an analysis of the plan’s consistency with the GHG emission reduction goal in S-3-05 in order to comply with the California Environmental Quality Act (“CEQA”). There, SANDAG used the GHG reduction goal in AB 32 (the California Global Warming Solutions Act of 2006) as a significance threshold standard in its EIR to determine whether the transportation and non-transportation sources of GHG emissions from the project would have a significant impact on the environment. SANDAG did not use the long-term GHG emissions reduction goal of 80 percent below 1990 level by 2050 as promulgated under S-3-05. SANDAG argued that CEQA Guidelines section 15064.4 does not require a lead agency to consider executive orders or legislation in determining the significance threshold that applies to a specific project. Cleveland National, 231 Cal.App.4th at 1071.

While the passage of SB 32 does not resolve the main issue in Cleveland National, it tends to clarify that legislative action, not a gubernatorial executive order, sets state-wide policy on GHG emissions reduction goals. Twice now, the governor’s office has issued executive orders on GHG emission reduction goals—S-3-05 and Executive Order B-30-15 (2015)—and twice the state legislature has independently passed legislation adopting similar goals—AB 32’s emissions reduction goal for 2020 and now SB 32’s emissions reduction goal for 2030. However, the legislature has not acted to set a GHG emissions reduction goal for 2050, as called for in S-3-05 and B-30-15. This strengthens SANDAG’s argument that gubernatorial executive orders cannot set state-wide policy on GHG emissions reduction goals unless ratified by the state legislature. Cleveland National, 231 Cal.App.4th at 1072. At the time SANDAG used AB 32’s GHG emissions reduction goal as the significance threshold, AB 32 was the only law in place related to a state-wide GHG emissions reduction goal. Id. Thus, in SANDAG’s view, it did not abuse its discretion by not using the GHG emissions reduction goal of S-3-05 in its EIR analysis.

Until the court hears Cleveland National and provides guidance on an appropriate standard for the significance threshold for projects beyond 2020, project developers, lenders and lead agencies should apply SB 32’s GHG reduction target of 40 percent below 1990 levels by 2030 as a standard for a significance threshold under CEQA. While no legislation addresses the GHG emissions reduction goal for 2050, it may still be prudent to use the S-3-05’s target of 80 percent below 1990 levels by 2050 to minimize the risk of challenges to the environmental review, at least until further direction is provided by the state legislature.

We will continue to monitor and provide updates on the status of Cleveland National.

Client Alert 2016-245