In California, project sponsors and government agencies are facing increased pressure to analyze the impact of proposed projects on climate change. The California Environmental Quality Act (CEQA) requires a lead agency, before approving a project, to evaluate the potentially significant environmental impacts of that project and to adopt feasible measures to mitigate those impacts.

These requirements place project sponsors and California agencies in a difficult position because there is currently 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.” To address this difficulty, the Governor’s Office of Planning and Research (OPR) has been instructed to develop CEQA guidelines “for the mitigation of greenhouse gas emissions or the effects of greenhouse gas emissions.” OPR must complete its draft guidelines by July 1, 2009.

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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.

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