Project sponsors in California increasingly have become concerned about how to evaluate the potential climate impacts of their proposed projects under the California Environmental Quality Act (CEQA). AB 32, which seeks to reduce greenhouse gas emissions in California by an estimated 30% by the year 2020, has led some parties to contend that government agencies must take into account the potential climate impacts of the projects they approve, even if the projects contribute as little as “one molecule” of greenhouse gas.

Under CEQA, state and local agencies must evaluate and disclose the significant environmental impacts of proposed projects, and must adopt feasible measures to mitigate those impacts. These requirements place project sponsors and California agencies in a difficult position, because there is no regulatory guidance on how to evaluate an individual project’s contribution to climate change, much less how to determine whether a project’s potential contribution to climate change is “significant.” Until such guidance is developed (see recent efforts by Office of Planning and Research), agencies are faced with the dilemma of either (a) concluding that climate change is too speculative for evaluation and facing potential litigation from environmental advocacy groups and the California Attorney General, or (b) developing an ad hoc methodology for evaluating a project’s contribution to climate change, which may lead to unnecessary and costly environmental impact analysis and mitigation requirements.

With respect to the first approach, CEQA allows an agency to conclude, after investigation, that a particular impact is too speculative for evaluation and to proceed with no further investigation and analysis of the potential impact. Based on the current state of scientific knowledge, some government agencies have opted to follow this approach. In some cases, litigation has ensued. Several pending lawsuits in California’s trial courts have challenged an agency’s use of this first approach when the agency has refused to evaluate and mitigate a project’s alleged climate change impacts under CEQA.

With respect to the second option, CEQA provides agencies with wide discretion in determining the appropriate scope and methodology for evaluating environmental impacts. Accordingly, several agencies have attempted to evaluate climate change in their environmental documents. Various technical resources are available to assist this evaluation, including publications by the Association of Environmental Professionals and the California Attorney General. While these publication offer useful tools and approaches for analyzing climate change, no one asserts that one approach is more suitable than others. Instead, agencies must carefully determine, based on their unique circumstances, where and how to “draw the line” with respect to the scope of environmental analysis, as well as how to measure and mitigate a particular project’s climate-changing impacts.

Project sponsors in California are advised to work closely with their environmental consultants, legal counsel, and the applicable public agencies in developing successful approaches. Without a well thought-out approach, project sponsors face substantial litigation risks, as well as potentially cost-prohibitive mitigation requirements.

For further information about this topic, please contact Akin Gump.