Supreme Court Denies Review and Depublication of Case Establishing Significance Thresholds for Greenhouse Gas Emissions Under CEQA

On October 19, 2011, the California Supreme Court denied the petition for review and requests for depublication of the Court of Appeal, Fourth District’s decision in Citizens for Responsible Equitable Environmental Development v. City of Chula Vista (2011) 197 Cal.App.4th 327 (CREED).

CREED captured great attention because of the only four published cases that address climate change, it is the first one to address the pivotal issue of a lead agency’s analysis of significance thresholds for greenhouse gas emissions under the California Environmental Quality Act (CEQA). CREED, along with several notable environmental advocacy groups and the Attorney General of the State of California, sought review as well as depublication to overturn the Court of Appeal’s sanctioning of a lead agency’s use of the California Global Warming Solutions Act of 2006 (AB 32) as the significance threshold to assess greenhouse gas emissions and climate change impacts under CEQA. The critical take-away of the CREED decision is that the lead agency has the discretion to set a significance threshold, and it is proper to use AB 32 and the “business as usual” methodology for assessing the significance of impacts from greenhouse gas emissions.

History of the Case

In 2009, the City of Chula Vista (the City) adopted a mitigated negative declaration to approve the remodel and expansion of an operating retail store that would demolish a 1970s-era building and build a modern, energy-efficient building. CREED filed a petition for writ of mandate, claiming that the City should have prepared an environmental impact report. CREED contended that the project may have a significant environmental impact on greenhouse gas emissions, air quality on sensitive receptors, particulate matter and ozone, and hazardous materials. The Court of Appeal remanded the hazardous materials issue to the trial court with instructions. Applying the fair argument standard to the other issues CREED raised, the court found no fair argument existed that the project may have significant environmental impacts.

Court Determines That the City Properly Relied on AB 32 as a Significance Threshold for Greenhouse Gas Emissions

In the most notable holding of the decision, the court found that the City properly relied on AB 32 as the threshold of significance for greenhouse gas emissions. The court rejected CREED’s contentions that the City could not rely on AB 32 because the project’s emissions exceeded three other “well-recognized” potential thresholds of significance.

The court cited the amendments to the CEQA Guidelines promulgated in March 2010, finding that lead agencies retain the discretion to determine the significance of greenhouse gas emissions and 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.” 14 Cal. Code of Regs. § 15064.4(a). The court stated that when assessing the significance of impacts from greenhouse gas emission on the environment, the lead agency should consider the following:

  • the extent the project may increase or reduce greenhouse gas emissions
  • whether the project emissions exceed a threshold of significance that the lead agency determines applies to the project
  • the extent 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.

14 Cal. Code of Regs. § 15064.4(b)(1-3).

Thus, the court concluded, “lead agencies are allowed to decide what threshold of significance it will apply to a project.”

The court then upheld the City’s use of compliance with AB 32 as the significance threshold. The City used AB 32’s reduction goals to determine whether the project would reduce “business as usual” emissions – emissions assuming no reduction from measures required by AB 32 – by the percentage required to be consistent with AB 32’s statewide emission goals. CREED had argued various other thresholds were more stringent and therefore should have been the relevant threshold. The court upheld the City’s decision to use an AB 32 percentage reduction based on the “business as usual” methodology and found that CREED’s arguments regarding potential alternative thresholds did not constitute a fair argument.

Significance of CREED

Even though climate change and greenhouse gas emissions have been a hot topic in California for decades, it is only in recent years that public and private entities have struggled with analyzing and quantifying a proposed project’s cumulative impacts to greenhouse gas emissions pursuant to CEQA. Not only does the CREED decision confirm that lead agencies have the discretion to determine the appropriate significance threshold for greenhouse gas emissions, but it also supports the use of the AB 32 “business as usual” methodology for assessing the significance of impacts from greenhouse gas emissions. The California Supreme Court’s denial of review finally provides lead agencies guidance for their review of greenhouse gas emissions under CEQA.