The California Air Resources Board (CARB) voted unanimously to adopt stringent regional greenhouse gas emissions (GHGs) reduction targets (“Targets”) on September 23, 2010. CARB adopted the Targets as part of the implementation of SB 375, the California statute that ties greenhouse gas emissions reductions to coordinated transportation and land use planning. CARB issued a Staff Report and Functional Equivalent Document (FED) in August 2010.1 The Targets adopted on September 23 are the same as those CARB recommended in its Staff Report.

SB 375 required CARB to establish “ambitious and achievable” Targets for 2020 and 2035 by September 30, 2010, for each region covered by the state’s 18 metropolitan planning organizations (MPOs), which represent nearly 98 percent of the state’s population and emissions. The MPOs must now begin the process of developing Sustainable Communities Strategies (SCSs) that meet the Targets set out by CARB, or if it is not possible for MPOs to meet the Targets, the MPOs must prepare an Alternative Planning Strategy (APS) that shows how the Target could be met. The MPOs will incorporate the SCSs into their updated Regional Transportation Plan (RTP), which forms the basis for receiving federal transportation funds. Thus, the MPOs are required to incorporate the Targets into their long-term planning or they risk losing transportation infrastructure funding.

SB 375 is one of several California climate bills. The law breaks ground nationally by tying together GHG emissions, regional land use planning and federal transportation money.

Adopted Regional Targets

CARB intends that the Targets will ultimately be met through reduced emissions from passenger vehicles and light trucks. CARB adopted the following Targets for the four largest MPOs, which represent most of the population and growth in the state:

  • San Diego Association of Governments (SANDAG): 7 percent by 2020 and 13 percent by 2035
  • Sacramento Area Council of Governments (SACOG): 7 percent and 16 percent
  • Metropolitan Transportation Commission (MTC), applicable to the nine-county San Francisco Bay Area: 7 percent and 15 percent
  • Southern California Association of Governments (SCAG): 8 percent and 13 percent

In the San Joaquin Valley, placeholder targets of 2 percent and 5 percent apply to the eight MPOs in the region. CARB also set significantly lower Targets for the six remaining MPOs, which together represent about 5 percent of the current population, vehicle miles of travel and passenger vehicle GHGs in the state.

The Target Setting Process

CARB and MPO staff worked together to develop scenario analyses to inform the Target setting process. Each of the major MPOs recommended Targets to CARB for 2020 and 2035. This bottom-up approach was intended to provide baseline data and local land use information to assess the feasibility of greenhouse gas reduction goals and land use policies, However, because CARB reviewed the MPOs’ original scenarios and suggested changes to the analysis to achieve more aggressive Targets, there was also a top-down element to the Target setting.

For three of the largest MPOs (SANDAG, SACOG, MTC), CARB adopted Targets consistent with the MPOs’ recommendations. CARB rejected the SCAG’s recommended Targets. Even where the CARB adopted the MPOs’ recommendations, however, the Targets are more aggressive than those originally proposed and considered through much of the process. For instance, the MTC initially presented analysis to CARB showing a 5 percent 2020 reduction in per capita GHG emissions and a 3 percent 2035 reduction as the most achievable targets, based on realistic land use and pricing assumptions. The MTC concluded its initial analysis by claiming that achieving the CARB’s 7 percent/15 percent targets would not be realistic “by any stretch of the imagination.” After receiving comments from CARB, and at CARB’s request factoring in emissions reductions attributed to the severe economic downturn, MTC ultimately proposed 7 percent for 2020 and 15 percent for 2035 – and CARB adopted these targets.

The SCAG submitted analysis to CARB demonstrating that “ambitious and achievable” targets for its region were between 7 and 8 percent for 2020 and 5 and 6 percent for 2035. This scenario included emissions reductions due to the recession. CARB rejected these targets, noting that the range of emissions reductions for 2035 was “unexpectedly lower than the region’s recommended reduction target for 2020,” and also noted that the proposed targets were less ambitious than the 2035 targets identified by other major MPOs (CARB SB 375 Staff Report, August 9, 2010, at 24). CARB then set an emission reduction Target for 2035 at 13 percent, which the SCAG Regional Council rejected in mid-September 2010.

The Impact of the Regional Targets: Federal Transportation Dollars

The MPOs must incorporate the SCSs as an element of their updated Regional Transportation Plan (RTP), which forms the basis for receiving federal transportation funds. Govt. Code § 65080(b)(2). In order to receive federal funding for transportation projects included in an RTP, areas either not in attainment or that have recently attained achievement with national air quality standards must receive a “conformity determination” from the U.S. Environmental Protection Agency (EPA) that the RTP conforms to the state implementation plan (SIP) for the region. 42 U.S.C. §7506(c). Because SCSs that achieve the Regional Targets will now be a part of RTPs, EPA will consider the assumptions that underlie SCSs.

Conformity determinations must use reasonable assumptions and the best available information regarding the distribution of employment and residences in the area. 40 C.F.R. §93.122(b)(1). EPA and the U.S. Department of Transportation have stated that historical trends and recent data should be the primary sources of information. See EPA Guidance: Improving Air Quality Through Land Use Activities (EPA Guidance) at 57. EPA has also indicated that it expects land use assumptions used in a conformity determination to be “generally consistent with the trends assumed in the previous conformity determination or those included in a recently submitted SIP,” and if the conformity documentation does not provide a “reasonable explanation” for deviating from these assumptions,” the conformity determination will be closely scrutinized, and may not be approved.” EPA Guidance at 59.

RTPs also must include a financial plan for implementation of the RTP that identifies public and private funding sources that are “reasonably expected” to be available. 23 U.S.C. §§134(i)(2)(C), 134(j)(2)(B); see also 23 C.F.R. §450.104 (RTP must include “sufficient financial information for demonstrating that projects in the [RTP] can be implemented using committed, available or reasonably available revenue sources, with reasonable assurance that the federally supported transportation system is being adequately operated and maintained.”).

As described above, CARB and the MPOs relied on new assumptions, including worst-case scenarios regarding the recession, to support the achievability of the Targets. EPA may closely scrutinize the conformity documentation because of these assumptions. Additionally, MPOs will have to show commitment of funds for major transit investments required to reach the Targets – a level of funding commitment that may be difficult for the MPOs to show as reasonably available. An EPA refusal to approve a conformity determination could jeopardize the federal funding requested in the RTP, including funds necessary for safety improvements and long-planned transit and roadway projects.

MPOs opting to prepare an APS rather than an SCS may also be at risk of losing federal transportation dollars, even though APSs are not incorporated into the RTP. Any alternative development plan included in an APS must itself receive a conformity determination (Govt. Code §65080(b)(2)(H)(4)) and would contain the same vulnerabilities if based on improper assumptions, as described above.

Environmental Review

In conjunction with the Staff Report, CARB released a FED to meet its obligations under the California Environmental Quality Act (CEQA) to review the environmental impacts of the Targets. CARB provided a very short discussion of the environmental benefits and drawbacks of the Targets. It described environmental benefits such as increased mobility due to congestion relief, fuel cost savings and reduced taxpayer burdens, reduced air and water pollution, and conservation of open space. It also identified a number of negative environmental impacts, including increased air pollution in areas close to sensitive receptors, like schools, increased traffic in urban cores, and increased burdens on existing utilities, among others. In the document, CARB deferred analysis of these impacts as too speculative. It stated that although there is a potential for adverse impacts based on subsequent regional and local decisions, the net benefit to the environment from minimizing long-term transportation-related GHGs is potentially substantial.

Opinions and Forecasting

The adopted Targets and the process for developing them have generated criticism and praise from various stakeholders. CARB received hundreds of public comments, both on the Targets themselves and on the environmental review document that accompanied them. The California Building Industry Association asserted that the targets were too aggressive and would have unintended adverse environmental impacts, stemming from the extremely high-density development that would be required to meet the targets. It also asserted that the aggressive Targets would tend to encourage development in less-developed portions of the state that do not fall within an MPO, encouraging sprawl and greenfield development outside of major metropolitan areas. Other commenters such as the Joint Republican Caucus of the California Legislature highlighted potential economic impacts of the targets, such as prohibiting new, affordable housing development while increasing transportation costs and threatening jobs.

Environmental organizations such as the Natural Resources Defense Council (NRDC), which was instrumental in passing SB 375, supported the CARB Targets as representing a reasonable compromise among competing interests. The NRDC facilitated a sign-on letter asserting that the Targets would lead to co-benefits such as reduced water demands, increased opportunities for exercise and other public health benefits, reduced infrastructure costs and reduced traffic congestion. The Center for Biological Diversity submitted comments asserting that the Targets were not aggressive enough.

Conclusion

Now that CARB has adopted targets, the next phase to implement SB 375 is the development of a SCS or APSs to meet the regional Targets. Through the development of the SCS or APS, MPOs will have the exclusive authority to determine whether, and by what means, they will achieve the targets set for them by CARB. The SCS or APS will then be incorporated into each MPO’s updated RTP – RTP updates will take place between 2011 and 2014 and then we will know how development of SCSs will affect federal review of RTPs.

SB 375 is intended to require land use planning that increases transportation choices and reduces the frequency and distance of Californians’ commutes and other vehicle trips, however, it remains to be determined whether MPOs will be able to achieve the Targets. Regardless, SB 375 is likely to have major implications for the development landscape across the state.