Last week, the Riverside County Superior Court invalidated an environmental impact report (EIR) for a 1,766-acre residential and commercial project that had been proposed for development in the northwest open space areas of Coachella Valley near Joshua Tree National Park in Southern California. The Court cited the EIR’s failure to analyze the project’s greenhouse gas (GHG) emissions and other climate change impacts. [Center for Biological Diversity, et al. v. City of Desert Hot Springs, et al. (Riverside County Superior Court - Case No. RIC 464585) (August 6, 2008)].

The Palmwood Project proposed nearly 2,700 homes, 1 million square feet of commercial space, a 400-unit hotel, a commercial amphitheater, and golf courses comprising 45 holes. Environmental groups Center for Biological Diversity and Sierra Club challenged the Project, arguing, inter alia, that respondent City of Desert Hot Springs’ failure to make a meaningful attempt to analyze the Project’s climate change impacts violated the California Environmental Quality Act (CEQA), the state version of the National Environmental Policy Act.

Under CEQA, public agencies are required to prepare EIRs for proposed actions that may have potentially significant adverse environmental impacts. The EIR must analyze and provide feasible mitigation measures for such impacts, as well as discuss project alternatives.

In 2006, California adopted the landmark Global Warming Solutions Act (AB 32), which set a goal of cutting the state’s GHG emissions to 1990 levels by 2020. In 2007, SB 97 further directed the Governor’s Office of Planning and Research (OPR) to develop CEQA Guidelines on GHG emissions by July 2009, which the California Resources Agency would adopt by January 2010. Meanwhile, in June 2008, the OPR published a technical advisory of informal guidance on how to calculate and reduce GHGs.

Since 2007, environmental groups have brought a number of CEQA challenges against proposed projects based on their environmental documents’ failure to adequately address potential climate change impacts. In the Palmwood lawsuit, the court “affirmed what the California legislature made clear: that global warming must be addressed in land-use decisions,” said Jonathan Evans , an attorney with petitioner Center for Biological Diversity.

Specifically, respondent City of Desert Hot Springs contended that a climate change analysis was not required because it would be entirely “speculative,” given the absence of any formal regulatory guidance, framework, or the necessary analytic tools or methodology. Rejecting this argument, the Court held that the City should have at least made a “meaningful attempt” to analyze the Project’s climate change impacts. By failing to do so, the City did not proceed as required by law. The Court further held that the City should have considered the cumulative impact of GHGs.

As of August 1, 2008, nearly 400 environmental documents in California have included discussion of a proposed project’s climate change impacts. To date, lead agencies have taken various approaches in their climate change impact analyses - ranging from a qualitative or quantitative analysis without any significance determination; to a quantitative analysis with a zero net carbon dioxide equivalent increase as the threshold (where the project’s GHG emissions would be mitigated to zero or the project would rely on carbon offset trading to achieve net zero emissions); to a quantitative analysis that provides an inventory of project GHG emissions and relies on compliance with GHG reduction strategies contained in the California Climate Action Team reports.

As for which approach may be most appropriate, the debate remains open until the OPR or some other agency develops firmer regulatory guidance on how to address climate change impacts in CEQA documents. Meanwhile, the Center for Biological Diversity, et al. v. City of Desert Hot Springs, et al. case settles that, at minimum, lead agencies must make a “meaningful attempt” and “use its best efforts to find out and disclose all that it reasonably can” regarding a proposed action’s climate change impacts.

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