Reducing Greenhouse Gas Emissions from Vehicle Miles Traveled: Integrating the California Environmental Quality Act with the California Global Warming Solutions Act

Ecology Law Quarterly

Volumn 36, Issue 1, 2009, Pages 71-135

  Malaczynski, Joanna D ^a,b   Duane, Timothy P ^a,c  

^a UNIVERSITY OF CALIFORNIA   (United States)

^b UNIVERSITY OF MICHIGAN LAW SCHOOL   (United States)

^c STANFORD UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

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EID: 66949121008     PISSN: 00461121     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (376)

1. CAL. HEALTH & SAFETY CODE § § 38,500-38,599 (West 2008).
2. Id. § 38,550. Further, the Schwarzenegger administration set a target to reduce GHG emissions by 80 percent by 2050. Cal. Exec. Order No. S3-05 (June 1, 2005), http://gov.ca.gov/executive-order/1861/.
3. CAL. AIR RES. BD., DRAFT CALIFORNIA GREENHOUSE GAS INVENTORY 1, 3 (Nov. 19, 2007), available at http://www.arb.ca.gov/cc/inventory/data/ tables/rpt-Inventory-IPCC-Sum-2007-l l-19.pdf (listing transportation emissions as 181 million metric tons of CO2 equivalents out of 479.4 net California emissions included in inventory for 2004).
4. CAL. AIR RES. BD., TECHNICAL ASSESSMENT: COMPARISON OF GREENHOUSE GAS REDUCTIONS UNDER CAFE STANDARDS AND CARB REGULATIONS ADOPTED PURSUANT TO AB 1493 9 (2008) [hereinafter TECHNICAL ASSESSMENT] (estimating that 44 percent of vehicle emissions reductions can by achieved in California by 2020 from full planned implementation California's fuel economy policies).
5. 2 equivalents out of a total of 181 million metric tons of CO2 equivalents in the transportation sector for 2004).
6. See Energy Policy and Conservation Act, 49 U.S.C. §§ 32,901-32,919 (2006).
7. See CAL. HEALTH & SAFETY CODE § 43,018.5.
8. CAL. ENERGY COMM'N, THE ROLE OF LAND USE IN MEETING CALIFORNIA'S ENERGY AND CLIMATE CHANGE GOALS: FINAL STAFF REPORT 9 (2007) (citing CAL. DEP'T OF FIN., RACE/ETHNIC POPULATION WITH AGE AND SEX DETAIL, 1970-2004 (1998); U.S. FED. HIGHWAY AUTH., HIGHWAY STATISTICS 1975-2004 (2005)).
9. CAL. HEALTH & SAFETY CODE § 3 8510.
10. See California Air Resources Board, AB 32 Scoping Plan Background, http://www.arb.ca.gov/cc/scopingplan/scopingplan.htm (last visited Feb. 18, 2009).
11. CAL. HEALTH & SAFETY CODE § 38,562(c).
12. See, e.g., CAL. AIR RES. BD., CLIMATE CHANGE DRAFT SCOPING PLAN DISCUSSION DRAFT (2008), available at http://www.arb.ca.gov/cc/scopingplan/document/draftscopingplan.pdf [hereinafter DRAFT SCOPING PLAN] and CAL. AIR RES. BD., CLIMATE CHANGE DRAFT SCOPING PLAN DISCUSSION DRAFT APPENDICES (2008), available at http://www.arb.ca.gov/cc/ scopingplan/document/ draftscopingplanappendices.pdf.
13. See also CAL. AIR RES. BD., ATTACHMENT A: REGULATION FOR THE MANDATORY REPORTING OF GREENHOUSE GAS EMISSIONS (SECOND 15-DAY MODIFIED REGULATORY LANGUAGE FOR PUBLIC COMMENT)(June 30, 2008), available at http://www.arb.ca.gov/ regact/2007/ghg2007/ghgattachmentl.pdf; GOVERNOR'S OFFICE OF PLANNING & RESEARCH, CEQA AND CLIMATE CHANGE: ADDRESSING CLIMATE CHANGE THROUGH CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) REVIEW (2008); Settlement Agreement, State v. San Bernardino County, No. CIVSS 700329 (San Bernardino County Super. Ct., Aug. 28, 2007), available at http://ag.ca.gov/cms-pdfs/press/2007-08-2 l-San-Bernardino-settlement-agreement.pdf (dealing with reducing GHG emissions from diesel trucks); ConocoPhillips and California Attorney General Settlement Agreement, Sept. 10, 2007, http://ag.ca.gov/cms-pdfs/press/N1466-CoCoSettlement Agreement.pdf [hereinafter ConocoPhillips Settlement] (addressing mitigation efforts for emissions from a new refinery).
14. CAL. PUB. RES. CODE § 21,000-21,177 (West 2008).
15. S. 375, Gen. Assem., 2007-2008 Reg. Sess. (Cal. 2008) (to be codified in scattered sections of the CAL. GOV'T CODE and at CAL. PUB. RES. CODE § 21,155).
16. CAL. AIR RES. BD., CLIMATE CHANGE PROPOSED SCOPING PLAN: A FRAMEWORK FOR CHANGE (2008) [hereinafter SCOPING PLAN] and APPENDICES A-J, VOLUMES I-III (2008), available at http://www.arb.ca.gov/cc/scopingplan/document/ scopingplandocument.htm. Both the Scoping Plan and Appendices were approved in December 2008. California Air Resources Board Resolution 08-47 (December 11, 2008), available at http://www.arb.ca.gov/cc/scopingplan/document/final- sp- resolution.pdf.
17. See, e.g., Settlement Agreement, State v. San Bernardino County, supra note 12; ConocoPhillips Settlement, supra note 12.
18. The exception is the strict set of criteria for projects under SB 375, as discussed further below.
19. See, e.g., Ellen Hanak, Lousie Bedsworth, Sarah Swanbeck&Joanna Malaczynski, Climate Policy at the Local Level: A Survey of California's Cities and Counties, 2008 PUB. POL'Y INST. OF CAL. 31-32, 37, available at http://www.ppic.org/main/publication.asp?i=849 (a survey of California local governments finding, in part, that local governments need and are looking for greater state guidance on appropriate land use policies to address climate change).
20. CAL. PUB. RES. CODE § 21,083.05 (West 2008).
21. S. 375, § l(c), Gen. Assem., 2007-2008 Reg. Sess. (Cal. 2008) (to be codified in scattered sections of the CAL. Gov'T CODE and at CAL. PUB. RES. CODE § 21,155).
22. Arnold Schwarzenegger, Signing Statement for SB 375 (Sept. 30, 2008), http://gov.ca.gov /pdf/press/SB375-Steinberg-Signing-Message.pdf.
23. According to a 2008 nationwide survey of transportation agencies, 90 percent are having financial difficulties expanding service to meet their rising ridership demand. AM. PUB. TRANSP. ASS'N, RISING FUEL COSTS: IMPACTS ON TRANSIT RIDERSHIP AND AGENCY OPERATIONS: SURVEY RESULTS 6 (2008), http://www.apta.com/research/info/ online/documents/fuelsurvey0809.pdf. See also League of California Cities, Bill for More Infill, Transit Oriented Development, Railroad Grade Crossings and County Roads Goes to Governor, June 27, 2008, http://www.cacities.org/index.jsp?zone= locc&previewStory=27310 (stating that the volume of grant applications from local governments for transit oriented development projects and infill infrastructure exceeded available state funding by fourfold during the 2007-08 fiscal year).
24. CARB's SCOPING PLAN sets a GHG reduction target of only five million tons for transportation. SCOPING PLAN, supra note 15, at ES-5. This is an increase from the two million ton target set in a previous draft. Id. According to Fulton et al., land use changes are expected to account for eighteen million tons (12 percent) of the GHG emissions reductions necessary to achieve the AB 32 goals. WILLIAM FULTON, JESS DANIELS, & AARON ENGSTROM, WHITE PAPER: INTEGRATING LAND USE INTO A MARKET-BASED IMPLEMENTATION SYSTEM FOR AB 32 ii (2008).
25. SCOPING PLAN, supra note 15, at 32.
26. Mat 16,21,32.
27. Id. at 30.
28. Id at 37.
29. The importance of relying on non-SB 375 measures to achieve VMT and GHG reductions through transportation-related land use changes is recognized in CARB's SCOPING PLAN under AB 32, which establishes a target GHG reduction of five million metric tons of CO2 equivalent (MMTCO2e) from the land use sector-but assumes that none of those reductions will be due to SB 375 itself. SCOPING PLAN, supra note 15, at 17 n.16. Also, comments by CARB Chair Mary Nichols and CARB General Counsel Ellen Peter at the annual Environmental Law Conference at Yosemite of the California State Bar in October 2008 confirm that no SB 375-releated GHG reductions are included in the Scoping Plan's "target" of five million tons of GHG reductions from land use changes. Mary D. Nichols, Chair, California Resources Board, Keynote Remarks at the Environmental Law Conference at Yosemite (Oct. 18, 2008); Ellen Peter, CARB, Panel Comments at the Environmental Law Conference at Yosemite (Oct. 17,2008).
30. SCOPING PLAN, supra note 15, at 68-69.
31. TERRY MOORE, PAUL THORSNES & BRUCE APPLEYARD, THE TRANSPORTATION/ LAND USE CONNECTION 220 (2007).
32. CAL. ENVTL. PROTECTION AGENCY, CLIMATE ACTION TEAM REPORT TO GOVERNOR SCHWARZENEGGER AND THE LEGISLATURE 10 (2006). CARB estimates this figure to be 38 percent, up from 35 percent in 1990. Press Release, Cal. Air Res. Bd., Air Board Passes Two Major Building Blocks in State's Effort to Fight Global Warming (Dec. 6, 2007), http://www.arb.ca.gov/lispub/rss/ displaypost.php?pno=944.
33. ECON. & TECH. ADVANCEMENT ADVISORY COMM., FINAL REPORT: TECHNOLOGIES AND POLICIES TO CONSIDER FOR REDUCING GREENHOUSE GAS EMISSIONS IN CALIFORNIA 3-1 (2008), http://www.arb.ca.gov/cc/ etaac/ETAACFinalReport2-ll-08.pdf (citing 2004 CARB INVENTORY OF GREENHOUSE GAS EMISSIONS BY T RANSPORTATION MODE).
34. Press Release, supra note 31.
35. Technical Assessment, supra note 4, at 9 (estimating that full implementation of the Pavley Bill, which regulates vehicle emission rates, can reduce new vehicle emissions 44 percent by 2020). Note that fuel efficiency is not the only determinant of emission rates, however; California has emphasized that a range of technological interventions can reduce GHG emissions that are not directly correlated with fuel economy, such as addressing evaporative emissions when fueling. See Green Mountain Chrysler Plymouth Dodge Jeep v. Crombie, 508 F. Supp. 2d 295, 375 (D. Vt. 2007); Central Valley Chrysler-Jeep, Inc. v. Goldstene, 529 F. Supp. 2d 1151 (E.D. Cal. 2007)
36. CAL. HEALTH & SAFETY CODE § 43,018.5 (West 2008).
37. The implementation of AB 1493 has become the subject of national litigation because EPA initially delayed, and ultimately denied, California the right to enforce higher fuel economy standards than those set by EPA.
38. See 73 Fed. Reg. 12,156 (Mar. 8, 2008). Litigants challenging AB 1493 implementation (including adoption of the CARB standards by other states under section 209 of the Clean Air Act) argued that the CARB standard is effectively a fuel economy standard that is preempted by the CAFE standards established under the federal Energy Policy Conservation Act of 1975, Pub. L. No. 94-163, 89 Stat. 871 (1975) (current version at 49 U.S.C. §§ 32,901-32,919 (2006)).
39. The claim that the CAFE standards preclude EPA from regulating greenhouse gases under the Clean Air Act was rejected by the U.S. Supreme Court in April 2007. Massachusetts v. EPA. 549 U.S. 497, 531-32 (2007).
40. The narrower issue of whether implementation of California's AB 1493 regulations under section 209 of the Clean Air Act would be preempted by the CAFE standards was also rejected by both the Federal District Court of Vermont in Green Mountain Chrysler v. Crombie, 508 F. Supp. 2d 295, 398 (D. Vt. 2007)
41. and the Federal District Court for the Eastern District of California in Central Valley Chrysler-Jeep v. Goldstene, 529 F. Supp. 2d 1151, 1173 (E.D. Cal. 2007).
42. However, these cases were decided before the adoption of the Energy Independence and Security Act of 2007, Pub. L. No. 110-140, 121 Stat. 1492 (codified as amended at 42 U.S.C. and 49 U.S.C), which establishes new CAFE standards.
43. EPA Administrator Stephen Johnson claimed in his official letter rejecting California's request for a waiver under section 209 of the Clean Air Act that he did not rely on this legislative change in the CAFE standards in making his decision. 73 Fed. Reg. 12,156 (Mar. 8, 2008).
44. However, he previously linked his denial of California's request to these new federal fuel economy standards in his statements announcing the denial in December 2007. Press Release, EPA, America Receives a National Solution for Vehicle Greenhouse Gas Emissions (Dec. 19, 2007), available at http://yosemite.epa.gov/opa/admpress.nsf/eebfaebclafd883d85257355005afdl9/ 41b4663d8d3807c5852573b6008141e5!Open Document (stating that the national fuel economy standards will more effectively address global warming than individual state efforts).
45. See also Zachary Coile, Bob Egelko & Matthew Yi, EPA Blocks California Bid to Limit Greenhouse Gases From Cars, S.F. CHRON., Dec. 20, 2007, at Al, available at http://www.sfgate.com/cgi-bin/article.cgi?file= /c/a/2007/12/20/MN55UUD6.DTL (quoting Johnson saying the new standards make state laws unnecessary). President Obama has since directed the EPA Administrator to review its denial of the California request for a section 209 waiver to implement the AB 1493 regulations, which were first adopted by CARB on September 24, 2004. Memorandum from President Barack Obama to the Administrator of the Environmental Protection Agency, January 26, 2009, available at http://www.whitehouse.gov/the-press-ofrice/Presidential-Memorandum-EPA-Waiver.
46. See Cal. Exec. Order No. S-01-07 (Jan. 18, 2007), http://gov.ca.gov/index.php7/executive-order/5172 (calling for a reduction in fuel carbon intensity of 10 percent by 2020, and adoption of a low carbon fuel standard). A low carbon fuel standard is also one of the Discrete Early Action Measures identified by CARB to be implemented by January 1, 2010, pursuant to AB 32, CAL HEATH & SAFETY CODE § 38,560.5. CAL. AIR RES. BD., EXPANDED LIST OF EARLY ACTION MEASURES TO REDUCE GREENHOUSE GAS EMISSIONS IN CALIFORNIA RECOMMENDED FOR BOARD CONSIDERATION 11 (2007), available at http://www.arb.ca.gov/cc/ ccea/meetings/eafinalreport.pdf. California has also prepared an alternative fuels plan pursuant to AB 1007. See CAL. AIR RES. BD. & CAL. ENERGY COMM'N, STATE ALTERNATIVE FUELS PLAN (2007).
47. SB 375 (discussed infra notes 67-72 and accompanying text discussing how the bill affects VMT) is likely to promote patterns of development and transportation system investment that will reduce VMT, but it is unclear how successful it will be. See generally S. 375, Gen. Assem., 2007-2008 Reg. Sess. (Cal. 2008) (to be codified in scattered sections of the CAL. GOV'T CODE and at CAL. PUB. RES. CODE §21,155)).
48. DRAFT SCOPING PLAN, supra note 12, at 11.
49. This is derived from the CARB estimate that two hundred thousand cars produce one million metric tons of CO2 per year. Press Release, supra note 31. Thus, 169 million metric tons is comparable to 33.8 million cars.
50. California's population in 2006 was approximately 36.5 million. U.S. Census Bureau, State and County QuickFacts: California, http://quickfacts. census.gov/qfd7states/06000.html (last visited Nov. 28, 2008).
51. CAL. ENERGY COMM'N , supra note 8, at 9 (citing STATE OF CALIFORNIA, DEP'T OF FINANCE, RACE/ETHNIC POPULATION WITH AGE AND SEX DETAIL, 1970-2004 (1998) and U.S. GOV'T, FED. HIGHWAY AUTH., HIGHWAY STATISTICS 1975-2004 (2005)).
52. REID EWING ET AL., GROWING COOLER: THE EVIDENCE ON URBAN DEVELOPMENT AND CLIMATE CHANGE 13 (2007), http://sgusa.convio.net/site/ DocServer/GrowingCooler9-18-07small.pdf? docID=4061.
53. A nationwide report states that modest land use changes (building new developments at thirteen dwelling units per acre and increasing existing density to nine dwelling units per acre, from a current average density of 7.6 units per acre) could reduce vehicle miles traveled by 30 percent nationwide, leading to a 7 to 10 percent reduction in total U.S. transportation-related carbon dioxide emissions. Id. at 19, 21.
54. According to the National Household Travel Survey, 87 percent of daily trips are made by personal vehicle. Forty-five percent of trips are made for personal reasons such as errands, 27 percent for recreational purposes, and 15 percent for work commutes. BUREAU OF TRANSP. STATISTICS, U.S. DEP'T OF TRANSP., HIGHLIGHTS OF THE NATIONAL HOUSEHOLD TRAVEL SURVEY 2 (2003), available at http://www.bts.gov/publications/highlights-of-the-2001-national-household- travel-survey/pdf7entire.pdf.
55. Interview with Elizabeth Deakin, Professor of City and Regional Planning, U.C. Berkeley, in Berkeley, Cal. (Feb. 8, 2008). See also ELIZABETH DEAKIN, SUSTAINABLE DEVELOPMENT & SUSTAINABLE TRANSPORTATION: STRATEGIES FOR ECONOMIC PROSPERITY, ENVIRONMENTAL QUALITY, & EQUITY, U.C. BERKELEY INST. OF URBAN & REG'L DEV. 8 (identifying compact development, mixed use development, higher development densities, and transit, pedestrian, bike friendly development land use strategies to manage demand for transportation).
56. CAL. ENERGY COMM'N, supra note 8, at 4 (stating that "increasing a community or development's density and accessibility to job centers are the two most strongly correlated factors for reducing vehicle miles traveled through design").
57. Todd Litman, Land Use Impacts on Transport, Victoria Transport Policy Institute, at 13 (November 5, 2008), available at http://www.vtpi.org/landtravel.pdf (summarizing various literature on trip generation and trip length from land use).
58. A quarter-mile radius is considered within a pedestrian's reach. REID EWING, SMART GROWTH NETWORK, PEDESTRIAN- AND TRANSIT-FRIENDLY DESIGN: A PRIMER FOR SMART GROWTH 5 (1999), available at http://www.epa.gov/dced/pdf/ptfd-primer.pdf.
59. Robert Cervero suggests that the "3-Ds"-density, diversity, and design-are most conducive to increasing transit usage. See ROBERT CERVERO, THE TRANSIT METROPOLIS: A GLOBAL INQUIRY 72 (1998). As discussed above, increased density alone is insufficient to shift mode choice, despite a strong statistical correlation between density and transit usage. See generally PETER NEWMAN & JEFFREY KENWORTHY, SUSTAINABILITY AND CITIES: OVERCOMING AUTOMOBILE DEPENDENCE (1999) (discussing the relationship between density and modal choice). Price incentives (e.g., through high gasoline taxes, parking fees, and subsidized transit) also play an important role, while finer-grained urban design features can make transit use more attractive. See id.
60. Litman, supra note 48, at 13.
61. See ROBERT A. JOHNSTON & RAJU CEERLA, UNIV. OF CAL. TRANSP. CENTER, EFFECTS OF LAND USE INTENSIFICATION AND AUTO PRICING POLICIES ON REGIONAL TRAVEL, EMISSIONS, AND FUEL USE 6-10 (1995), available at http://www.uctc.net/papers/269.pdf.
62. METROPOLITAN TRANSPORTATION COMMISSION, CHARACTERISTICS OF RAIL AND FERRY STATION AREA RESIDENTS IN THE SAN FRANCISCO BAY AREA: EVIDENCE FROM THE 2000 BAY AREA TRAVEL SURVEY, VOLUME I 1 (2006), available at http://www.mtc.ca.gov/planning/ smart-growth/stars/ Executive-Summary-BATS2000-Station-Area-Residents-Study.pdf.
63. Id. at 2.
64. Lyndsey Layton, Study Lists Mass Transit Benefits: A Trip Uses Half the Fuel of One in Private Car, Industry Reports, WASH. POST, July 17, 2002, at B05, available at http:// www. washingtonpost.coin/ac2/w^yn?pagename=aitiole&node=&contentId=A 16228-2002Iul 16¬Found= true.
65. See generally MARIELA ALFONZO ET AL., THE RELATIONSHIP OF NEIGHBORHOOD BUILT ENVIRONMENT FEATURES AND WALKING (2006), available at http://www.ucte.net/papers/782.pdf.
66. For an example of bike-friendly design, see City of Portland Office of Transportation, Bicycle Master Plan, (adopted May 1, 1996), available at http://www.portlandonline.com/transportation/ index.cfm?c=34812&a=71843.
67. CAL. PUB. RES. CODE § 21000-21177 (West 2008).
68. Guidelines for Implementation of the California Environmental Quality Act, CAL CODE REGS. tit 14, § 15002(c) (2008);
69. see also Friends of Mammoth v. Bd. of Supervisors, 8 Cal. 3d 247 (1972).
70. See Hanak, Bedsworth, Swanbeck&Malaczynski, supra note 18, at 4 (noting that land use is a "quintessential area of local government authority" and that local governments engage in CEQA. review of specific land use project documents). For example, 80 percent of the costs of CEQA Environmental Impact Reports for local governments was spent on private projects in 1990. San Francisco Planning and Urban Research Association, Fixing the Cal 4fornia Environmental Quality Act, SPUR Policy Report (November 6, 2005), at 5, available at http://www.spur.org/documents/20060201-CEQA3.pdf.
71. CAL. PUB. RES. CODE § 21157. If a proposed project will not have a significant impact on the environment, the Lead Agency must prepare a Negative Declaration documenting lack of significant environmental impact. CAL CODE REGS, tit 14, § 15070. In addition, certain projects are categorically excluded from CEQA review, including agricultural housing, affordable housing, and residential infill, to the extent these meet particular requirements. See CAL CODE REGS, tit 14, §§ 15,193-15,195.
72. SB 375 creates additional exemptions for a specific set of projects meeting a more complex set of criteria, but those exemptions apply primarily to whether or not those projects will need to (1) analyze a sub-set of environmental impacts associated with GHG emissions and air quality; (2) consider a range of lower-density residential alternatives; and/or (3) conduct new or additional analysis of project impacts when similar analysis was conducted under an EIR or as part of a SCS or APS. S. 375, §§ 14, 15, Gen. Assem., 2007-2008 Reg. Sess. (Cal. 2008) (to be codified in scattered sections of the CAL. GOV'T CODE and at CAL. PUB. RES. CODE § 21,155).
73. CAL. PUB. RES. CODE § 21082.1. CEQA allows public agencies to contract out the preparation of the Environmental Impact Report (EIR) to a third party. Id. In practical terms, any private party whose land use proposal is subject to public agency review frequently funds the consultant who prepares the EIR for the proposal.
74. See CEQA § 21082.2. SB 375 would exempt some projects from analyzing lower-density residential alternatives under CEQA. S. 375 §§ 14, 15.
75. Guidelines for Implementation of the California Environmental Quality Act, CAL CODE REGS. tit 14, § 15126.6(2008).
76. S. 375, Gen. Assem., 2007-2008 Reg. Sess. (Cal. 2008) (to be codified in scattered sections of the CAL. GOV'T CODE and at CAL. PUB. RES. CODE § 21155).
77. Felicity Barringer, California Moves on Bill to Curb Sprawl and Emissions, N.Y. TIMES, August 28, 2008, at A12, available at http://www.nytimes.com/2008/08/29/us/29sprawl.html (describing SB 375 as "the nation's most comprehensive effort to reduce sprawl," thereby reducing GHG emissions).
78. S. 375 § 4. CARB is required to "provide each affected region with GHG emission reduction targets for the automobile and light truck sector for 2020 and 2035" by no later than September 30, 2010. A "Regional Targets Advisory Committee" is to be appointed by January 31, 2009 and the advisory committee is to transmit its recommendations for methods to CARB by September 30, 2009. Id.
79. These MPOs are generally Councils of Government ("COGs"), but with no direct land use regulatory authority. The MPOs therefore have no authority to mandate changes in local land use plans or regulations. Paul G. Lewis&Mary Sprague, Federal Transportation Policy and the Role of Metropolitan Transportation Planning Organizations, 1997 PUB. POL'Y INST. OF CAL. 22 n.5, 35-37, available at http://www.ppic.org/main/publication. asp?i=81 (discussing regulatory and jurisdictional structure of COGs/MPOs); id. at 116, 133 (discussing lack of land use authority of MPO's with respect to local governments).
80. However, it is unclear what the consequences would be for failing to adopt an SCS or APS approved by CARB.
81. See generally S. 375, Gen. Assem., 2007-2008 Reg. Sess. (Cal. 2008) (to be codified in scattered sections of the CAL. GOV'T CODE and at CAL. PUB. RES. CODE § 21155).
82. SB 375 also (1) modifies the procedures and timing for revision of local government Housing Elements in their General Plans, including significant changes to the obligations associated with providing emergency shelters and affordable housing in accordance with state and regional housing goals; and (2) modifies the procedures for enforcing those state and regional housing goals through judicial review and authority to modify local zoning and development ordinances unless the local government has made specific findings regarding its inability to meet its allocated share of state and regional housing goals. A detailed analysis of SB 375 is beyond the scope of this Article. We focus here on how SB 375 will establish modeling protocols to test the GHG emissions impacts associated with the SCS or APS approaches and how CEQA exemptions (or the narrower scope of CEQA review in terms of both impacts and alternatives) under
83. SB 375 may affect the legal conditions under which transportation-related land use projects may generate GHG offsets within the broader GHG reduction framework of the Global Warming Solutions Act of 2006 (AB 32). AB 32's structure is discussed in Part III of this Article, while the mechanisms for linking land use and transportation offsets to the AB 32 structure are discussed in Parts IV-V1.
84. CAL. HEALTH & SAFETY CODE §§ 38,500-38,599 (West 2008).
85. Id. § 38,550.
86. Cal. Exec. Order No. S-3-05 (June 1, 2005), http://gov.ca.gov/executive- order/1861/.
87. Governor Schwarzenegger reaffirmed the 2050 targets as being integral to California's GHG emission reduction plan in a statement relating to the Pavley Bill, stating that "California's vehicle GHG standards are part of a carefully designed, comprehensive program to fight climate change through 2050." Press Release, Office of the Governor, Governor Schwarzenegger Issues Statement After U.S. EPA Rejects California's Tailpipe Emissions Waiver Request (Dec. 19, 2007), available at http://gov.ca.gov/press-release/ 8353/.
88. Global Warming Solutions Act, A. 32, Gen. Assembly, 2005-2006 Reg. Sess. § 38,510 (Cal. 2006) (codified at CAL. HEALTH&SAFETY CODE § 38500). CARB has taken on its role by conducting a series of public hearings and workshops, leading various taskforce sessions, and announcing early action items for GHG reduction measures.
89. See Cal. Air Res. Bd., Climate Change, http://www.arb.ca.gov/ cc/cc.htm (last visited Nov. 27, 2008) (listing implementation actions for AB 32). The Board has also internally appointed and receives advice from two committees: The Economic and Technology Advancement Advisory Committee (ETAAC) and the Environmental Justice Advisory Committee (EJAC). Both committees were created pursuant to mandate under AB 32. Id.
90. California Health & Safety Code section 38,550 requires the inventory, while section 38,560 requires regulation to meet the target.
91. Press Release, supra note 31.
92. The Board must address both the sectors that will be covered and, through the establishment of jurisdictional thresholds of emissions that will be regulated under AB 32, determine which entities are subject to regulation. See California Air Resources Board Website, http://www.arb.ca.gov/cc/cc. htm, for a series of documents summarizing the Board's process under AB 32.
93. Press Release, supra note 31. Tracking emissions will be integral in understanding the major sources of emissions, and in understanding feasible reduction levels. It will help California identify the likely impacts of emissions and changes to emission levels over time. It is also a potential means of identifying communities subject to higher rates of pollution levels than others. Environmental justice advocates are concerned that reductions in GHG emissions will occur in ways that will disproportionately affect some communities. Adrienne Bloch, Communities for a Better Environment & Alice Kaswan, University of San Francisco, Panel Comments at the 2008 Environmental Law Conference at Yosemite (October 17, 2008). There is no "hot spot" effect associated with GHG emissions, but reductions in GHG emissions are correlated with reductions in other emissions that have health effects. Id. The spatial pattern of GHG emissions reductions is therefore correlated with a spatial pattern of reductions in other emissions that may disproportionately affect some communities. Id.
94. Id.
95. CAL. CODE REGS. tit. 17, §§ 95,100-95,133 (2008). The California legislature previously established a reporting regime for GHG emissions by creating the California Climate Action Registry (CCAR).
96. See CAL. HEALTH & SAFETY CODE § 42,800 (West 2006) (repealed 2007 by CAL. HEALTH & SAFETY CODE § 42,871).
97. The Registry is a non-profit organization and its legislative purpose is to help "organizations ⋯ establish greenhouse gas emissions baselines and register emissions results." Id. § 4280 l(e). This organization will likely manage the process of tracking and reporting GHG emissions in California.
98. However, the Market Advisory Committee recommended that CARB regulate both large and medium size stationary emitters as well as the transportation sector. MARKET ADVISORY COMM., R ECOMMENDATIONS FOR DESIGNING A GREENHOUSE GAS CAP-AND-TRADE SYSTEM FOR CALIFORNIA 35 (2007), available at http://www.climatechange.ca.gov/publications/market-advisory-committee/ 2007-06-29-MAC-FINAL-REPORT.PDF.
99. SCOPING PLAN, supra note 15, at ES-1.
100. Climate Change Scoping Plan, California Air Resources Board Resolution 08-47 (December 11, 2008), available a/http://www.arb.ca.gov/cc/ scopingplan/document/final-sp-resolution.pdf.
101. SCOPING PLAN, supra note 15, atES-l.
102. Id. at ES-2.
103. Id. at 16, 17,21,32.
104. Id. at ES-5, 17.
105. Id. at l7 n. l6.
106. SCOPING PLAN, supra note 15, at ES-5,27.
107. Id at ES-12, 19-20.
108. CARB is considering the option of issuing carbon allowances to cities and counties, which would have the effect of regulating emissions from land use. A primary proponent of this idea is Daniel Sperling, Director of the Institute of Transportation Studies at UC Davis and a member of CARB. See Daniel Sperling, Cal. Air Res. Bd., Address at the Berkeley Energy Symposium, Morning Break-Out Session: Transportation Sector Solutions (Mar. 7, 2008). Further, Mary Nichols, Chair of CARB, mentioned this option as a possibility in addressing a group of city and county representatives in March 2008. Mary Nichols, Address at The Local Government Commission&the California Attorney General's Office meeting, CEQA and Climate Change: The Critical Role of Local Government (Mar. 20, 2008).
109. See SCOPING PLAN, supra note 15, at 16, 21, 32.
110. Id. at ES-5.
111. Id.
112. See California Air Resources Board Website, http://www.arb.ca.gov/ cc/capandtrade/ capandtrade.htm (last visited Feb. 19, 2009) (providing extensive documentation of the CARB approach to market-based mechanisms). Despite its potential to have far-ranging impacts on GHG emissions, however, GHG-related taxes have not received much discussion among policy makers. Instead, CARB's policy emphasis has been on developing a cap-and-trade "market-based mechanism," rather than taxes on energy use or other proxies for GHG emissions. Some reviewers of this Article suggested that we should discuss the merits of carbon taxes and similar policy instruments in further detail, but they are simply not under serious consideration by CARE for AB 32 implementation. We have therefore focused on how a cap-and-trade system could incorporate VMT-reducing strategies that could affect transportation- related land use projects that would otherwise not be likely to go forward without such a system.
113. See, e.g., DRAFT SCOPING PLAN, supra note 12, at 13. Alternative regulatory approaches are often characterized either as (1) "command-and-control" (utilizing the "stick" of regulatory enforcement by a centralized authority, where mandates are established and penalties imposed for non-compliance) or "incentives-based" (relying primarily on the "carrot" of economic incentives to encourage emissions reductions).
114. See generally WILLIAM J. BAUMOL & WALLACE E. OATES, THE THEORY OF Environmental Policy: Externalities, Public Outlays, and the Quality of Life (1975); leonard ortolano, environmental regulation and impact assessment 93 (1997). despite such textbook distinctions, however, all law-based regulatory systems (including incentives-based systems that rely more on "carrot" than "stick") require regulatory oversight by central authorities, which establish target emissions levels and/or tax rates, monitor emissions to determine whether those targets have been achieved, and collect taxes and/or impose penalties for non-compliance. The success of a cap-and-trade system, in fact, depends on a shared belief that violating the cap has consequences that make the tradeable permits or allowances to emit valuable. The very existence of the property rights in tradeable permits or allowances is therefore dependent on possible use of the "stick." The "market" in such permits or allowances is a creation of and depends upon a strong regulatory system with monitoring capacity and strict enforcement authority.
115. Cal. Exec. Order No. S-20-06 (Oct. 18, 2006), http://gov.ca.gov/ executive-order/4484.
116. MARKET ADVISORY COMM., supra note 82, at 5-6.
117. ECON. & TECH. ADVANCEMENT ADVISORY COMM., supra note 32, at 1-4.
118. CAL. HEALTH & SAFETY CODE § 338561(c) (West 2006). Examples include the European system, the Regional
119. SCOPING PLAN, supra note 15, at 16, 21,32.
120. Id. at. 31.
121. Id. at 16, 21, 32. The Western Climate Initiative (WCI) is still in its early development, however, so the manner in which the AB 32 cap-and-trade regime may be integrated with a broader regional effort through WCI is unclear.
122. See generally BAUMOL, supra note 97; ORTOLANO, supra note 97, at 239; T.H. TlETENBERG, EMISSIONS TRADING; PRINCIPLES AND PRACTICE 1 (Resources for the Future 2d ed. 2006) (1985).
123. This general conclusion may not apply in all circumstances, however, so we are not advocating such an approach as the best under all circumstances. As we note below, there are a number of institutional conditions that must be met to have effective cap-and-trade regimes.
124. See ECON. & TECH. ADVANCEMENT ADVISORY COMM., supra note 32, at 1-4. "Of course, the regulatory system determines the structure in which the market operates-if structured well, regulatory policy (with consideration of a wide range of non-market factors) determines the end goals of policy while the market determines the means of achieving the policy goals.
125. Id. at 31.
126. Id. at 16, 21, 32. The Western Climate Initiative (WCI) is still in its early development, however, so the manner in which the AB 32 cap-and-trade regime may be integrated with a broader regional effort through WCI is unclear.
127. See generally BAUMOL, supra note 97; ORTOLANO, supra note 97, at 239; T.H. TlETENBERG, EMISSIONS TRADING; PRINCIPLES AND PRACTICE 1 (Resources for the Future 2d ed. 2006) (1985). This general conclusion may not apply in all circumstances, however, so we are not advocating such an approach as the best under all circumstances. As we note below, there are a number of institutional conditions that must be met to have effective cap-and-trade regimes.
128. See ECON. & TECH. ADVANCEMENT ADVISORY COMM., supra note 32, at 1-4. "Of course, the regulatory system determines the structure in which the market operates-if structured well, regulatory policy (with consideration of a wide range of non-market factors) determines the end goals of policy while the market determines the means of achieving the policy goals.
129. Emissions charges or taxes also offer cost-minimization advantages, but they have the disadvantage of requiring very accurate information about production costs in order to set the emissions charges or taxes at a level that will achieve a specified level of emissions reductions. In contrast, the cap-and-trade system should generally achieve a targeted level of emissions reduction specified by the "cap" in a cost-effective manner.
130. ECON. & TECH. ADVANCEMENT ADVISORY COMM., supra note 32, at 1-4.
131. Id. There is some debate about this point, however. Whether technological innovation will occur in response to a cap-and-trade system depends on other aspects of industry structure. It may work in the electric utility industry under some regulatory arrangements, for example, but not for the transportation sector or land use. See Margaret Taylor et al., The Role of Technological Innovation in Meeting California's Greenhouse Gas Emissions Targets, in MANAGING GREENHOUSE GAS EMISSIONS IN CALIFORNIA (California Climate Change Center at U.C. Berkeley 2006), available at http://calclimate.berkeley.edu/ 31nnovationandPolicy.pdf.
132. Two regional market-based efforts have also been formulated to address GHG emissions. The Regional Greenhouse Gas Initiative (RGGI) is a conglomeration of northeastern states organizing a cap-and-trade system for carbon emissions in the electricity sector.
133. See Regional Greenhouse Gas Initiative, Welcome, http://www.rggi.org/ about.htm (last accessed Nov. 28, 2008). The Western Climate Initiative (WCI) is a cooperative of northwestern states and Canadian provinces, which also seeks to organize itself around a cap-and-trade carbon system.
134. See Western Climate Initiative, http://www. westernclimateinitiative.org/AboutWCI.cfm (last accessed Nov. 28, 2008). Both organizations are in their incipiency, but RGGI is much further along in establishing a viable, operating cap-and-trade system for the electricity sector. RGGI auctioned its first carbon emission permits in September 2008, and all of its members have agreed to have implementation regulations in place for an operating cap-and-trade system by January 2009. Regional Greenhouse Gas Initiative, History, http://www. rggi.org/about/history (last accessed Nov. 28, 2008). The WCI is much more diffuse and is not focused yet on either particular sources of emissions or particular regulatory policies.
135. 2 EMISSIONS TRADING PROGRAM TO DATE (1996)).
136. Indeed, the actual documented emissions of sulfur dioxide under the cap were less than the allowable emissions. Tax or Trade, ECONOMIST (February 14, 2002), available at http://www.economia.unimi.it/users/ fiorio/tea/biem/2008-09/readmgs/5-Extern/EC20020214TaxOrTrade.pdf ("America's scheme to trade sulphur dioxide emissions, in order to reduce acid rain, has done better than its initial target at less than half the anticipated cost."). The benefits achieved under the cap-and-trade regime are typically overstated for the acid rain program, however, because national emissions levels had already been reduced by about 25 percent from 1980 by the time the Clean Air Act Amendments of 1990 were adopted. Industrial restructuring and fuel-switching had therefore already achieved about half of the targeted 50 percent reduction from 1980 levels before cap-and-trade was adopted-making achievement of the target emissions levels much easier.
137. 2 EMISSIONS FROM FUEL COMBUSTION: 1971-200511.74 (2007 ed.).
138. See Ruth Greenspan Bell, Market Failure, ENVT'L FORUM, March/April 2006 (noting the need for transparency in the accounting process and the key features necessary for successful implementation).
139. See BRYNER, supra note 111.
140. See Bell, supra note 112, at 30-31.
141. SCOPING PLAN, supra note 15, at 32. Note that mobile sources will be regulated directly through AB 1493, however, in terms of tailpipe emissions. See supra notes 38-39 and accompanying text regarding AB 1493 tailpipe emission regulations.
142. DRAFT SCOPING PLAN, supra note 12, at 69. Further, CARB reiterated in the Draft Scoping Plan that capped sectors include "electricity, transportation fuels, natural gas, and large industrial sources," all of which could potentially participate in the cap-and-trade program. Id at 17. Emissions from other sources have yet to be addressed. In particular, accounting for emissions generated by the electricity sector outside of California is being approached in parallel by the California Energy Commission (CEC) and the California Public Utilities Commission (CPUC) through a complex array of policies designed to decrease imports from coal-fired generators, increase production from renewable energy sources for the California market, and increase the end-use efficiency of electricity consumption. How such policies are coordinated both within California and across the Western Climate Initiative may determine whether any genuine reductions in GHG emissions are achieved. See JIM B. BUSHNELL, THE IMPLEMENTATION OF CALIFORNIA AB 32 AND ITS IMPACT ON WHOLESALE ELECTRICITY MARKETS, UNIVERSITY OF CALIFORNIA ENERGY INSTITUTE (2007).
143. Timothy Garner, A U.S. Carbon Market Could Learn From Europe: IETA, REUTERS, Apr. 19, 2007, http://www.ieta.org/ieta/www/pages/index.php? IdSiteTree=1387. Permits were also not allowed to carry over from the first phase of the program to the second phase of the program, which diminished their value as the first phase came to an end. See European Union Website, Emissions Trading Scheme Description, http://ec.europa.eu/environmenfclimat/emission/ indexen.htm (last visited Feb. 19,2009).
144. Press Release, EUROPA, Questions & Answers on Emissions Trading and National Allocation Plans (Mar. 8, 2005), available at http://europa.eu/rapid/pressReleasesAction.do?reference= MEMO/05/84&format= HTML&aged= 1 &language=EN&guiLanguage=en.
145. Kyoto Protocol to the United Nations Framework Convention on Climate Change, art. 3, Dec. 11, 1997, 37 I.L.M. 22 [hereinafter Kyoto Protocol].
146. Id. at art. 12.
147. Mat art. 6.
148. For a scathing critique of CDM implementation, see LORI POTTINGER, INT'L RIVERS NETWORK, BAD DEAL FOR THE PLANET: WHY CARBON OFFSETS AREN'T WORKING ⋯ AND HOW TO CREATE A FAIR GLOBAL CLIMATE ACCORD (2008). See also Michael Wara, Is the Global Carbon Market Working?, 445 NATURE 595 (Feb. 8, 2007); MICHAEL W. WARA & DAVID G. VICTOR, STANFORD UNIV. PROGRAM ON ENERGY AND SUSTAINABLE DEV., A REALISTIC POLICY ON INTERNATIONAL CARBON OFFSETS (2008).
149. Bell, supra note 112. Over one thousand projects were listed on the UNFCC registry for the Kyoto Protocol's Clean Development Mechanism as of November 28, 2008.
150. The sheer volume of activity further suggests the difficulty of monitoring compliance. See http://cdm.unfccc.int/ Statistics/index.html (last visited Nov. 28, 2008).
151. The Executive Board, which administers CDM projects, appears to rely in part on the monitoring reports prepared by independent certifying entities to ensure that CDM projects are meeting GHG reduction goals.
152. See U.N. Framework Convention on Climate Change, Decision 17/CP. 7: Modalities and Procedures for a Clean Development Mechanism as Defined in Article 12 of the Kyoto Protocol H 38, FCCC/CP/2001/13/Add.2 (Nov. 10, 2001) [hereinafter Modalities and Procedures], available at http://unfccc.int/resource/docs/cop7/13a02.pdf.
153. Carbon offsetting has been an active part in Europe's cap-and-trade system. It is also integral to the Regional Greenhouse Gas Initiative (RGGI) in the northeastern United States and it has been discussed by states engaged in the Western Climate Initiative.
154. See generally Regional Greenhouse Gas Initiative, Welcome, http://www.rggi.org/ (last visited Nov. 28, 2008);
155. Western Climate Initiative, http://www.westernclimateinitiative.org/ (last visited Nov. 28, 2008). Both the European system and RGGI limit the role of carbon offsets in meeting program goals in an effort to address concerns about whether or not offsets represent genuine reductions in GHG emissions or "additional" GHG sequestration. The European system has strict criteria for qualifying offsets.
156. See European Union's Website, Emission Trading Scheme, Linking Joint Implementation and Clean Development Mechanism, http://ec.europa.eu/ environment/climat/emission/linkingen.htm (last visited Feb. 19, 2009); RGGI allows only 10 percent of the total target to be met through offsets. Regional Greenhouse Gas Initiative, Offsets, http://www.rggi.org/offsets (last visited Nov. 28, 2008).
157. SCOPING PLAN, supra note 15, at 37.
158. MARKET ADVISORY COMM., supra note 82, at 61-62.
159. The ETAAC also recommends carbon offsets. ECON. & TECH. ADVANCEMENT ADVISORY COMM., supra note 32, at 9-5.
160. SCOPING PLAN, supra note 15, at 68.
161. DRAFT SCOPING PLAN, supra note 12, at 19. This matches the limit placed by RGGI on offsets as a total fraction of overall GHG emissions reductions obligations. We also recommend a 10 percent cap on offset credits.
162. See SCOPING PLAN, supra note 15, at 37 (stating that "the use of offsets and allowances from other systems are limited to no more than 49 percent of the required reduction of emissions," under cap and trade, or approximately 40 percent of all emissions reductions targeted under the Scoping Plan). This is a dramatic increase and could lead to an increased risk that "paper" reductions in GHG emissions will not be matched by verifiable reductions. We recommend a 10 percent cap on offset credits until more experience is gained to demonstrate both the additionality and verifiability of offset credits.
163. This illustration shows the complexity of GHG emission policy when it is pursued through parallel regulatory initiatives: in California, policies by the CEC and CPUC (in particular, those designed to implement the state's ambitious Renewable Portfolio Standard (RPS) to increase the share of electricity production from renewable energy sources) will allocate economic incentives toward such wind farms even in the absence of offset payments under the AB 32 structure. Counting a wind farm as "offsetting" carbon emissions when the wind farm would have been built anyway (in the absence of any offset payments, due to other policies) would double-count the benefits of building the wind farm. The overall reduction in GHG emissions called for under AB 32 would therefore less likely be reached. This Article does not address linkages between AB 32 and the electricity sector, which are complex. See BUSHNELL, supra note 116, for an introduction to the key issues.
164. This issue has affected the pursuit of energy efficiency projects, such as when the economic interests of commercial builders (who face the up-front costs of energy efficiency investments, but not the energy costs of failing to make such investments) diverge from their tenants (who must pay energy costs that could justify investment in energy efficiency measures, but who will not own those efficiency devices as tenants).
165. Even in the absence of compulsory regulation, carbon offsetting has become a cultural trend in recent years, especially in California. Many companies are taking advantage of voluntary carbon offsetting. Google, for example, announced plans to go "carbon neutral." Although some portion of its strategy comes from energy use reductions in both its products and operations, a significant proportion will come from carbon offsets, including livestock GHG emissions management projects in Brazil and Mexico.
166. See Google, Powering a Clean Energy Revolution, http://www.google.com/corporate/green/ energy/reducing.html (last accessed Nov. 28, 2008).
167. PG&E is also becoming an active carbon offsetter, as well as a clearinghouse for carbon offsets, by allowing its customers to pay additional dollars for sourcing their gas and electricity from alternative energy.
168. See PG&E, About ClimateSmart, http://www.pge.com/myhome/environment/ whatyoucando/climatesmart/climatesmartabout/index.shtml (last visited Nov. 28, 2008).
169. Due to the voluntary character of the offset market, however, serious concerns have been raised about whether offset payments are actually achieving GHG emissions reductions. The Federal Trade Commission (FTC) has initiated an investigation into the carbon offset market for this reason. See Louise Story, F.T.C. Asks if Carbon-Offset Money is Well Spent, N.Y. TIMES, Jan. 9, 2008, http://www.nytimes.com/2008/01/09/business/09offsets.html?-r= 2&adxnnl=l&oref= slogin&ref=business&adxnnlx=1227906398- kcBV+miZBYNQOqhCEOP4Fw; FTC Guides for the Use of Environmental Marketing Claims, 16 C.F.R. §§ 260.1-260.8 (2008);
170. Guides for the Use of Environmental Marketing Claims, Carbon Offsets and Renewable Energy Certificates, Public Workshop,72 Fed. Reg. 66,094-66,097 (Nov. 27, 2007).
171. SCOPING PLAN, supra note 17, at 13 (identifying distribution of emissions by sector, including transportation sector); id. at 17 (summarizing all GHG measures under AB 32); id. at 20. AB 32 implementation assumes that tailpipe emission from mobile sources are regulated under AB 1493
172. while the carbon content of mobile source fuels will be regulated under other legislation and regulation. Cf. supra notes 38-39. SCOPING PLAN at 13 (identifying Pavley Bill (i.e., AB 1493) and Low Carbon Fuel Standards as recommended GHG reduction measures for transportation sector).
173. MARKET ADVISORY COMM., supra note 82, at 8.
174. SCOPING PLAN, supra note 15, at 110, 68 (citing CAL. HEALTH AND SAFETY CODE § 38,571). CARB is also considering linking into the Kyoto Protocol, underscoring the importance of the Kyoto Protocol as a benchmark standard for carbon offsets. Id. at 38.
175. The Kyoto Protocol requires that reductions in emissions be "additional to any that would occur in the absence of the certified project activity." Kyoto Protocol art. 12.5(c).
176. Id.
177. Economic/financial cost analysis is used to document that the project does not generate any income beyond CDM-related income. An alternative to cost analysis is investment comparison analysis, by which the proposed project is compared to alternatives via an accepted comparison analysis, such as net present value, or cost/benefit ratio, among others. The third form of analysis is a benchmark analysis, which compares the proposed project and its alternatives to show that the proposed project does not meet a financial benchmark that would otherwise trigger the will to invest in the project. The benchmark may be based on government bond figures, private investment analysis, or a company internal benchmark. U.N. Framework Convention on Climate Change, Methodological Tool: Tool for the Demonstration and Assessment of Additionality, at 6, EB 39 (Aug. 26, 2008), available at http:// cdm.unfccc.int/methodologies/PAmethodologies/Additionality Tools/Additionality- tool.pdf [hereinafter Additionality Tool].
178. If a project does not prove to be robust under an investment analysis, it may still qualify for additionality via an alternative barrier analysis. The barrier analysis allows an offsetter to show that barriers exist that "prevent the implementation" of the proposed project and "do not prevent the implementation of at least one of the alternatives." These barriers may include investment barriers, technological barriers, "prevailing practice" barriers (the activity is 'first of its kind"), and others. Id. at 8-9.
179. Id at 4.
180. Id. at 8-9.
181. See UNFCCC/CCNUCC Executive Board Report 37, Annex 3 (Version 13) Procedures for the Submission and Consideration of a Proposed New Methodology 1fl|l-4, available at http://cdm.unfccc.int/Reference/Procedures/meth- proc02-vl3.pdf (describing the case-by-case methodology review available under CDM). Despite the purported rigor of the CDM review process, however, the actual review process has been criticized as being implemented without much rigor-only 59 projects had been rejected while 948 projects had been approved by the Executive Board as of March 1, 2008. See POTTINGER, supra note 122, at 11.
182. Modalities and Procedures, supra note 123, at 38.
183. A California Climate Action Registry staff member publicly acknowledged that CCAR looks to Kyoto CDM for guidance on carbon offsets. Rachel Tornek, CCAR, Panel Discussion at California Air Resources Board Local Government Operations Protocol Public Workshop (July 10,2008). Further, CARB anticipates potentially joining its future cap-and-trade scheme to the Kyoto Protocol, and therefore has a vested interest in maintaining policies that are consistent with Kyoto CDM policy. See SCOPING PLAN, supra note 15, at 113-115.
184. Compare GRUTTER CONSULTING, BRT BOGOTA, COLOMBIA: TRANS MlLENIO PHASE II-IV, CLEAN DEVELOPMENT MECHANISM PROJECT DESIGN DOCUMENT (2006), available at http://cdm. unfccc.int/UserManagement/FileStorage/E6LUMUUAQA83IUZAPO9XWBMS6BTSAB [hereinafter BOGOTA DESIGN DOCUMENT] and GRUTTER CONSULTING, MONITORING REPORT: BRT BOGOTA, COLOMBIA: TRANS MILENIO PHASE II-IV, MONITORING PERIOD 1/1/2006-31/12/2006 (2007), available at http://cdm.unfccc.int/UserManagement/FileStorage/ I7IQ 1F14RTWSFYBHIEYBPU1DFQB8JY with U.N. FRAMEWORK CONVENTION ON CLIMATE CHANGE, APPROVED BASELINE METHODOLOGY 0031: BASELINE METHODOLOGY FOR BUS RAPID TRANSIT PROJECTS (2006), available at http://cdm.unfccc.int/EB/025/eb25- repan01.pdf [hereinafter BASELINE METHODOLOGY AM 0031 ].
185. BOGOTA DESIGN DOCUMENT, supra note 146, at 7.
186. Id.
187. Id. at 15-27.
188. Id. at 7.
189. BASELINE METHODOLOGY AM 0031, supra note 146, at 3. This methodology applies only to BRT projects where an existing bus transit system is in place. It is not applicable to proposed BRT projects where no public transit is currently in place. Presumably, this is because the identified baseline for this project is the preexisting bus transit system. Further, the proponents of the methodology presumably had no incentive to define an appropriate methodology for all BRT or mass transit projects because this would have been outside of the scope of their own project. The scope of this methodology is therefore quite narrow. By allowing parties to develop generalized methodologies based on their own project proposals, however, the UNFCCC may be proliferating methodologies that differ from those that would otherwise be created for a series of categorically similar projects.
190. SEE U.N. FRAMEWORK CONVENTION ON CLIMATE CHANGE, PROPOSED NEW BASELINE AND MONITORING METHODOLOGIES: METHODOLOGY FOR TRANSPORT EFFICIENT DEVELOPMENT (2008), available at http://cdm.unfccc.int/ methodologies/PAmethodologies/publicview.html?OpenRound=24& cases=B [hereinafter METHODOLOGY FOR TRANSPORT EFFICIENT DEVELOPMENT].
191. Id. at 2.
192. Id. The project also identifies "car use restrictions" measures as influencing VMT. Id.
193. U.N. FRAMEWORK CONVENTION ON CLIMATE CHANGE, CLEAN DEV'T MECHANISM PROJECT DESIGN DOCUMENT FORM: NANCHANG TOD PROJECT, CHINA 9, 11 (2008), available at http://cdm.unfccc.int/methodologies/PAmethodologies/ publicview.html?OpenRound=24&cases=B.
194. Id. at 14. The control group meets the following comparability requirements under CDM: (1) it is in the same metropolitan area, (2) it is sufficiently isolated from the project site to avoid cross-influence, (3) it represents the business as usual development patterns, (4) population and land use profiles are similar, and (5) it has similar transportation service characteristics.
195. Id.
196. See METHODOLOGY FOR TRANSPORT EFFICIENT DEVELOPMENT, supra note 152, at 25 (discussing the survey).
197. Id.
198. Id at 9.
199. Id. at 11-12.
200. Id. at 12.
201. U.N. FRAMEWORK CONVENTION ON CLIMATE CHANGE, PROPOSED NEW METHODOLOGY NM 0279 ver. 01, at 2 (2008), available at http://cdm.unfccc.int/UserManagement/ FileStorage/CDMWF- DE9OD37T30PXS6N2A1XTGY5OBV2PXX.
202. Id.
203. Id.
204. Id. at 3.
205. U.N. FRAMEWORK CONVENTION ON CLIMATE CHANGE, PROPOSED NEW METHODOLOGY NM 0279 Expert Form ver. 3 (2006), available at http://cdm.unfccc.int/ methodologies/PAmethodologies/ publicview.html?meth-ref=NM0279.
206. U.N. FRAMEWORK CONVENTION ON CLIMATE CHANGE, FINAL PANEL RECOMMENDATION TO THE EXECUTIVE BOARD, at 3, available at http://cdm.unfccc.int/UserManagement/FileStorage/ CDMWF- 0IUFC6ZQCBGQI93OXPQL44B06H3RF0.
207. Cal. Health&Safety Code §§ 33,000-33,018 (West 2008). Redevelopment agencies are local government agencies. Id. § 33120.
208. Id. § 33,320.1. For an extensive discussion on "economic blight" as defined by statute, and the application of the term by California redevelopment agencies, see Michael Dardia, Subsidizing Redevelopment in California, PUB. POL'Y INST. OF CAL. (1998), available at http://www.ppic.org/ content/pubs/report/R-298MDR.pdf.
209. See, e.g., Modalities and Procedures, supra note 123 (addressing small scale projects, especially renewable energy and energy efficiency projects); U.N. Framework Convention on Climate Change, Decision 19/CP.9: Modalities and Procedures for a Afforestation and Reforestation Project Activities Under the Clean Development Mechanism in the First Commitment Period of the Kyoto Protocol, FCCC/CP/2003/6/Add.2 (Dec. 12, 2003), available at http://unfccc.int/resource/ docs/cop9/06a02.pdf (addressing afforestation and reforestation projects that increase net carbon stocks in a given area) [hereinafter Decision J9/CP.9]. See also U.N. Framework Convention on Climate Change, CDM Executive Board Meetings, http://cdm.unfccc.int/EB/index. html (last accessed Nov. 28, 2008).
210. ECON. & TECH. ADVANCEMENT ADVISORY COMM., supra note 32, at 9-5.
211. MARKET ADVISORY COMM., supra note 82, at 63.
212. Id. RGGI allows carbon offsetting for methane capture from landfills, afforestation, energy efficiency improvements in the building sector, avoidance of methane emissions from agricultural, and emission reductions in sulfur hexafluoride. REGIONAL GREENHOUSE GAS INITIATIVE, MODEL RULE: PART XX CO2 BUDGET TRADING PROGRAM 104-105 (2007), available at http://www.rggi.org/docs/model-rule-corrected-1507 .pdf.
213. See California Climate Action Registry, Project Protocols, http://www.climateregistry.org/ tools/protocols/project-protocols.html (last accessed Nov. 29, 2008). The California Climate Action Registry has also already set forth emissions reporting protocols for particular industries, including the cement industry, as well as the utility/power industries. See California Climate Action Registry, Industry Specific Protocols, http://www.climateregistry.org/tools/protocols/industry-specific-protocols.html (last accessed Nov. 29, 2008).
214. CAL. AIR RES. BD., SUMMARY OF BOARD MEETING: OCTOBER 25 & 26,2007 6, available at http://www.arb.ca.gov/board/ms/2007/msl02507.pdf.
215. As previously discussed, the Kyoto Protocol has also issued a categorical standard for forestry CDM projects; however, this standard does not include forest conservation projects.
216. See Decision 19/CP.9, supra note 171 and accompanying text (addressing afforestation and reforestation projects that increase net carbon stocks in a given area). The Kyoto forestry standard is even looser than California's forestry protocol for afforestation projects, which at least requires legal additionality.
217. See CAL. CLIMATE ACTION REGISTRY, FOREST PROJECT PROTOCOL 24 (2007), available at http://www.climateregistry.org/ tools/protocols/project- protocols/forests.html [hereinafter FOREST PROJECT PROTOCOL]. The Protocol is currently being updated.
218. See http://www.climateregistry.org/tools/protocols/project- protocols/forests/ forest-protocol-updates.html (last visited Feb. 28, 2009).
219. FOREST PROJECT PROTOCOL, supra note 177, at 26. We believe both the CCAR Forest Project Protocol and the Kyoto Protocol's categorical standard for forestry CDM projects should be strengthened to a higher additionality standard, however, akin to the general additionality standard called for in the general Kyoto Protocol CDM standard. Our concern reflects our evaluation of the forestry projects that have qualified for offset credits so far under the CCAR standard: while those projects clearly have greater conservation protections (typically through conservation easements) and management plans that will lead to greater carbon sequestration than "business as usual," the management plans typically result in less carbon sequestration in the near-term than existing levels of carbon sequestration on the forested lands generating the offset credit. This peculiar and counter-intuitive result is due to the fact that the vast bulk of the credits are generated by avoiding timber harvesting in accordance with a "baseline" that would dramatically increase timber harvest levels (and therefore dramatically reduce carbon sequestration) compared with recent historic management practices on these lands. The "baseline" case is predicated on an assumption that landowners would "optimize" economic returns from the land by maximizing the economic value of commodity production through timber harvest. The resulting "baseline" projection of carbon sequestration benefits associated with the alternative management plan therefore shows a spike in carbon sequestration credits in the early years of the project-not because the forested lands are sequestering more carbon, but because they are not releasing as much carbon as the "baseline" model assumptions projected. A project could therefore release carbon in the early years of the projected management period yet still generate carbon offset credits-which, in turn, could be used to reduce the GHG emission reduction obligations of other entities. The net result of such a management regime, however, would actually be an increase in GHG emissions compared to 1990 levels. It is therefore arguable whether or not projects otherwise required to reduce current emissions should be allowed to "offset" their failure to make such reductions with offset credits based on such accounting.
220. See id.; see also Van Eck Forest Project Documents, https://thereservel.apx.com/mymodule/ProjectDoc/EditProjectDoc.asp?idl=101 (last visited Feb. 19. 2009); Garcia River Forest Project Documents, https://thereservel.apx.com/mymodule/ProjectDoc/ EditProjectDoc.asp?idl=102 (last visited Feb. 19, 2009). Together, these two projects are credited with over 100,000 metric tons of CO2 equivalent on an annual basis compared to the "baseline."
221. FOREST PROJECT PROTOCOL, supra note 177, at 28. Forest conservation is likely to be more attractive as an investment than reforestation because of the lower costs of maintenance versus complete replanting.
222. Cf. ENVTL. LAW INST., MITIGATION OF IMPACTS TO FISH AND WILDLIFE HABITAT: ESTIMATING COSTS AND IDENTIFYING OPPORTUNITIES 16 (2007), available at http://www.elistore.org/reports-detail.asp?ID= 11248 (discussing the difference in costs of wetland restoration and wetland creation as it relates to mitigation banking under section 404 of the Clean Water Act). Additionality of forest conservation projects is problematic, however, for several reasons. Private parties are likely to select lands for conservation that are at a lower risk of deforestation. Lands that are more likely to be deforested are likely to face greater financial and political obstacles; therefore they will appear less attractive to conservation investors. A resolution to this problem may be to assign probabilities of deforestation to each parcel of land, and to then base the market value of the conservation offset on this probability. Another solution may be to presume that an acre of conserved forested land is worth a fraction of an acre of reforested land. This approach has been taken in the market for the preservation and restoration of wetlands under section 404 of the Clean Water Act. See id. at 16.
223. An additional issue with forest conservation projects is that they do not guarantee that a diverted forest development project will not be carried out on another unsuspecting piece of forest instead. Interview with William Stewart, Cooperative Extension Specialist, Univ. of Cal. Berkeley Dep't of Envtl. Sci., Policy & Mgmt, in Berkeley, Cal. (Mar. 7, 2008). A solution to this problem may be to secure preservation of larger tracts of land, rather than focusing on individual parcels. Id. Securing net benefits from forestry projects depends ultimately upon net decreases in timber consumption, however, to avoid the "leakage" issue of shifting timber harvest to other regions-which could then eliminate any benefits associated with increase carbon sequestration in California by increasing carbon emissions and decreasing carbon sequestration in other regions.
224. The wide range of concerns about verifying the additionality of offset credits generated through altered forestry practices recently led the European Union to reject inclusion of such credits in its tradeable permit scheme. Instead, the E.U. has indicated that "state-backed funding" of forestry projects would be a more reliable way to ensure improved forest management while transferring investments toward those who undertake such forestry efforts. James Kanter, Amid Proliferating Markets, E.U. Officials Draw Line on Forest Credits, N.Y. TIMES, Oct. 22, 2008, http:// greeninc.blogs.nytimes.com/2008/10/22/amid-proliferating-markets-eu-officials- draw-line-on-forest-credits. For a summary of questions and answers about the European Union's decision regarding forestry offset projects, see Press Release, EUROPA, Questions and Answers on Deforestation and Forest Regulation (Oct. 17 2008), available at http://europa.eu/rapid/pressReleasesAction. do?reference=Memo/08/632/.
225. S. 97, Gen. Assem., 2005-2006 Reg. Sess. (Cal. 2008) (codified at CAL. PUB. RES. CODE §§ 21083.05,21097).
226. S. 375, Gen. Assem., 2007-2008 Reg. Sess. (Cal. 2008) (to be codified in scattered sections of the CAL. GOV'T CODE and at CAL. PUB. RES. CODE § 21155).
227. The California Attorney General has submitted formal comments under CEQA related to AB 32 GHG emissions reductions to several counties, including San Bernardino, San Diego, Sacramento, Orange, Merced, Kern, Fresno, San Joaquin, Contra Costa, and Yuba, and the cities of Richmond and San Jose. The Attorney General has also "questioned housing developments in San Jose and in Yuba County, as well as regional transportation plans in Fresno, Sacramento, San Diego and Kern counties." Samantha Young, California Attorney General Strikes Deal on Global Warming Case, SAN JOSE MERCURY NEWS, Aug. 21, 2007.
228. Some California cities and counties are taking action under AB 32 independently, including the cities of Los Angeles, San Francisco, Sonoma, Santa Monica, Berkeley, Palo Alto, Chula Vista, Modesto and Healdsburg, as well as Marin County. Press Release, Office of the Attorney Gen., Cal. Dep't of Justice, Brown Announces Landmark Global Warming Settlement (Aug. 21, 2007)
229. available at http://ag.ca.gov/newsalerts/release.php?id=1453. The AG had filed over forty comment letters and reached seven settlements on the matter as of mid-October 2008.
230. Janill L. Richards, California Deputy Attorney General, Panel Comments at the Environmental Law Conference at Yosemite (Oct. 18, 2008). Richards noted in her presentation that the AG filed the first comment letter on the issue in March 2006-which preceded AB 32's adoption later that same year. Id.
231. See Settlement Agreement, State v. San Bernardino County, supra note 12.
232. See ConocoPhillips Settlement, supra note 12.
233. See Petition for Writ of Mandate at 6, State v. County of San Bernardino, No. CIVSS 700329 (San Bernardino County Super. Ct, May 4, 2007), available at http://ag.ca.gov/globalwarming/pdf/ SanBernardino-complaint. pdf.
234. INST. OF TRANSP. ENG'RS, TRIP GENERATION (7th ed. 2003) (Single family homes are ITE code 210 and Apartments are ITE code 220).
235. See Letter from Bill Lockyer, Cal. Attorney Gen., to James Squire, County of San Bernardino (Oct. 23, 2006), available at http://ag.ca.gov/globalwarming/pdf/comments-San-Bernardino GP.pdf (containing comments of the attorney general regarding the San Bernardino County General Plan Revision, Draft Environmental Impact Report).
236. Id.
237. Id.
238. Petition for Writ of Mandate, supra note 185, at 9-10.
239. Settlement Agreement, State v. San Bernardino County, supra note 12, at 1.
240. Id. at 2.
241. Id. San Bernardino County has issued a pubic statement since the settlement, which includes several county-wide initiatives to reduce GHG emissions, including offering a voluntary San Bernardino County Green Building Program, pursuit of LEED certification on county buildings for new building construction and building renovations, fee waivers of building permit fees for installation of alternate power generation and power efficiency technologies, addition of a new hybrid fleet to county vehicles, solar powered highway message boards, and a solar/natural gas hybrid generation plant. Press Release, San Bernardino County, Biane Unveils "Green County San Bernardino" Programs, available at http://www.sbcounty.gov/ greencountysb/content/pressreleases/20070827 j3osd2jp-eenjxHinty.pdf.
242. Settlement Agreement, State v. San Bernardino County, supra note 12, at 3.
243. Morrison & Foerster, United States: Landmark CEQA/Climate Change Settlement, Aug. 24, 2007, available at http://www.mondaq.com/ article.asp?articleid=51686.
244. See CAL. PUB. RES. CODE §§ 21083.05 (West 2008). SB 97 also specifically exempts a series of large transportation projects funded under the Highway Safety, Traffic Reduction, Air Quality and Port Security Bond Act of 2006
245. as well as the Disaster Preparedness and Flood Prevention Bond Act of 2006 (except for projects initiated under these acts after January 1, 2010). Id. § 21097. SB 97 therefore actually constrains the reach of the Attorney General's CEQA settlements while delaying any regulatory recognition of the need to evaluate and mitigate GHG emissions effects through the Environmental Impact Report review process for a number of significant projects that might otherwise have been subject to CEQA litigation. Exempting these projects from such CEQA review for GHG emissions was so important to Republicans in the state legislature that they delayed approval of the entire state budget until this was resolved via SB 97.
246. SB 375 also contains important exemptions for transportation projects that have previously been approved by either the voters through approval of transportation bonds or the California Transportation Commission. The Governor has indicated that there is ambiguity in SB 375, however, regarding which transportation projects may be exempt from CEQA analysis of GHG emissions. He stated in his signing statement for SB 375 that "follow-up legislation is needed to provide clarity of the requirement that projected impacts to the SHS [State Highway System] by previously approved and new projects are required to mitigate for SHS impacts. Apparent inconsistency between this bill and current mitigation requirements provide broad potential for litigation that will hamper project delivery . . . ." Arnold Schwarzenegger, Signing Statement for SB 375 (Sept. 30, 2008), http://gov.ca.gov/pdf/press/ SB375-Steinberg-Signing- Message.pdf.
247. Siegel, Kassie, et al., Combating Global Warming through the California Environmental Quality Act, CAL. LAND USE LAW & POL'Y REP. 6 (Oct. 2007).
248. The Center suggests a hierarchy for municipal agencies in dealing with GHG reductions. For example, with regard to energy use, agencies should first reduce energy use, then employ renewable resources, and third, offset the remainder. Id. The Center has been one of the most active litigants on GHG consideration via CEQA, so its suggestions may play a particularly important role in the scope of CEQA settlements. 198.
249. See id. at 4.
250. CAL. AIR POLLUTION CONTROL OFFICERS ASS'N, CEQA AND CLIMATE CHANGE: EVALUATING AND ADDRESSING GREENHOUSE GAS EMISSIONS FROM PROJECTS SUBJECT TO THE CALIFORNIA ENVIRONMENTAL QUALITY ACT 43-44 (2008), available at http://www.capcoa.org/ceqa/ CAPCOA%20White%20Paper%20- %20CEQA%20and%20Climate%20Change.pdf.
251. Id. Because "cumulatively considerable" effects are by definition related to the cumulative- rather than project-by-project-effect of the emissions, all sources of emissions contribute to the cumulative effect. It is therefore difficult to rationalize a threshold of significance associated with individual project emissions, since the individual project's level of emissions is not the basis for causing the "cumulatively considerable" effect. The CAPCOA proposal is based primarily on considerations of scope (i.e., capturing most of the GHG emissions associated with projects going through CEQA review) and efficiency (i.e., trying to minimize the costs of conducting such CEQA analysis and mitigating the effects of relatively small projects). Id. However, establishment of such a threshold could also lead project proponents to design projects so as to avoid the application of the CEQA mitigation requirements for GHGs (i.e., by designing projects that emit just under the nine hundred ton threshold).
252. The California Attorney General's office issued a list of potential mitigation projects under CEQA to reduce GHG emissions. The items on the list generally fall under one of three categories: (1) transportation and urban development; (2) conservation and energy efficiency; and (3) land preservation and maintenance.
253. See CAL. DEP'T OF JUSTICE, OFFICE OF THE ATTORNEY GEN., THE CALIFORNIA ENVIRONMENTAL QUALITY ACT: ADDRESSING GLOBAL WARMING IMPACTS AT THE LOCAL AGENCY LEVEL 2008, available at http://ag.ca.gov/globalwarming/pdf/GW-mitigation-measures.pdf. The Center for Biological Diversity has made similar suggestions. See Siegel, supra note 197, at 6-7.
254. See CAL. GOVERNOR'S OFFICE OF PLANNING AND RESEARCH, TECHNICAL ADVISORY: CEQA AND CLIMATE CHANGE: ADDRESSING CLIMATE CHANGE THROUGH CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) REVIEW, 2008, available at http://opr.ca.gov/ceqa/pdfs/june08- ceqa.pdf [hereinafter OPR TECHNICAL ADVISORY].
255. Id. at 8.
256. Id. at 9. SB 375 also requires CARB to propose a methodology for allocating GHG emissions reduction targets to MPOs between 2009 and 2010, so these two efforts will need to be coordinated by CARB, OPR, and the Resources Agency. The final OPR proposal for CEQA Guidelines will therefore be released before any regional targets have been established by CARB under SB 375 (regional targets must be provided to MPOs by September 30, 2010). CAL. GOVT. CODE § 65080 (West 2008).
257. ConocoPhillips Settlement, supra note 12.
258. Id.
259. Id.
260. 2 per year; (2) undertake an energy efficiency audit of its Rodeo refinery in Contra Costa County and (3) undertake a carbon emissions audit of all of its California facilities. Id.
261. As of March 14, 2008, one metric ton of carbon was trading for $5.25 on the Chicago Climate Exchange.
262. See Chicago Climate Exchange Homepage, http://www.chicagoclimatex. com/ (last accessed Nov. 30, 2008). The combined investment into the Air District and Audubon Society funds would be worth 1.4 million tons of carbon on the open market, slightly more than one year of full capacity emissions of the new hydrogen facility. The reforestation project will potentially sequester another 1.5 million tons of carbon. Therefore, ConocoPhillips's combined responsibility under this settlement agreement is to offset approximately two years of emissions at full capacity. This assumes that the Chicago Climate Exchange carbon price is an adequate yardstick of the likely carbon sequestration potential of ConocoPhillips's sequestration obligations.
263. In the absence of stricter guidelines regarding mitigation requirements under CEQA, other industrial emitters are likely to utilize these figures as precedent in determining their own future obligations for mitigating their emissions under CEQA. Assuming a typical refinery can be expected to operate for twenty years, the ConocoPhilips settlement suggests a commitment to offset approximately 10 percent (two of the twenty years) of a new refinery's emissions over its lifespan.
264. See Clay A. Boyce, M. Andrew Crews & Robin Ritter, Time for a New Hydrogen Plant?, HYDROCARBON ENG'G, Feb. 2004, available at http://www.cbi.com/about/articles/CBI- HydrocarbonEngineering-Feb04.pdf (discussing refineries constructed twenty years ago as being generally outdated).
265. The significance of a 10 percent emissions reduction commitment varies based on the relative point of comparison. For example, 10 percent over twenty years appears to be a particularly small commitment considering that California must collectively reduce GHG emissions by 11 percent from 2004 levels to meet its 1990 targets in the next twelve years. The energy sector, if taken in isolation, would need to reduce emissions by 5.4 percent over twelve years (CARB quantified California's emissions in 2004 to be approximately 480 million metric tons of carbon dioxide equivalents, compared to 427 million metric tons in 1990; for the energy sector, 2004 emissions were 166 million metric tons and 1990 emissions were 157 million metric tons). CAL. AIR RES. BD., DRAFT CALIFORNIA GREENHOUSE GAS INVENTORY 1 (2007), available at http://www.arb.ca.gov/cc/inventory/ data/tables/rpt-Inventory-IPCC-Sum-2007-l l-19.pdf. The ConocoPhillips reductions under this CEQA settlement are therefore relatively comparable to the average GHG emissions reductions required of the energy sector under AB 32.
266. Emission reductions in the range of 5 to 10 percent seem to be the approximate scale of mitigation called for in the energy sector under AB 32. It makes an enormous difference, however, if a 5 or 10 percent reduction is required. The marginal cost of achieving the second 5 percent reduction (moving from 5 to 10 percent total reduction) is likely to be much greater than that required to achieve the first 5 percent reduction.
267. ConocoPhillips Settlement, supra note 12.
268. CAL. AIR RES. BD., ATTACHMENT B TO RESOLUTION 07-54: STAFF'S SUGGESTED MODIFICATIONS TO THE ORIGINALLY PROPOSED REGULATION ORDER RELEASED OCTOBER 19, 2007, REGULATION FOR THE MANDATORY REPORTING OF GREENHOUSE GAS EMISSIONS A-27 (2007), available at http://www.arb.ca.gov/regact/2007/ghg2007/ attachbres07-54.pdf.
269. Janill L. Richards, California Deputy Attorney General, Panel Comments at the Environmental Law Conference at Yosemite (Oct. 18, 2008).
270. James Moose, Panel Comments at the Environmental Law Conference at Yosemite (Oct. 18, 2008).
271. See also Arnold&Porter, Climate Change Litigation in the U.S., http:// www.climatecasechart.com (last accessed Nov. 30, 2008).
272. The San Bernardino County case is the only case to date in which the Attorney General actually filed suit; all other interventions have been handled through CEQA comment letters or interventions in other parties' litigation. See Office of the Attorney General Website, California Environmental Quality Act, http://ag.ca.gov/globalwarming/ceqa.php (last visited Feb. 19, 2009) (summarizing the AG's actions on these matters).
273. Settlement Agreement between City of Stockton, Sierra Club, & California Attorney General § 3b, 4 (September 10, 2008), available at http://ag.ca.gov/cms-attachments/press/pdfs/nl608-stockton -agreement.pdf. The Sierra Club filed the original Petition for Writ of Mandate in San Joaquin County Superior Court on January 10, 2008 (Case No. CV 034405) following the December 11, 2007 adoption of the Stockton 2035 General Plan. See id.
274. Id.
275. Id. .at§3(c).
276. Id. at §§ 6(a), 6(b).
277. Id. at §§ 5, 7.
278. Both the Sierra Club and the Attorney General involved professional planners in the settlement negotiations, which allowed for the development of much more specific substantive requirements of the City of Stockton. The relationship between planners and attorneys in the development of future settlements may now follow that model-where the substantive knowledge of planners is married to the procedural requirements of San Bernardino.
279. Linking CEQA and AB 32 will require some deliberate coordination on the part of CARB and the Office of Planning and Research (OPR). Strong coordination between the two agencies is highly desirable as OPR must set CEQA mitigation requirements for GHG emissions under SB 97 by January 1,2010. CAL. PUB. RES. CODE § 21083.05 (West 2008).
280. There is otherwise no compulsory mechanism for changing local land use or transportation plans or regulations to implement these projects. As Bill Higgins of the League of California Cities has noted, many local governments will be unable to approve transit-oriented mixed-use projects that would otherwise further the goals of SB 375 and AB 32 unless improvements can be funded to improve non-transportation infrastructure (e.g., sewers, water, parks). Additional funding therefore must enter the system to implement SB 375 successfully. Bill Higgins, League of California Cities, Panel Comments at the Environmental Law Conference at Yosemite (Oct. 19, 2008).
281. In the words of the Legislature, "[w]ithout improved land use and transportation policy, California will not be able to achieve the goals of AB 32." S. 375, §l(c), Gen. Assem., 2007-2008 Reg. Sess. (Cal. 2008) (to be codified in scattered sections of the CAL. GOV'T CODE and at CAL. PUB. RES. CODE §21155).
282. As noted above, increasing density alone is not sufficient to reduce GHG emissions. The spatial and economic links between land use changes (including density, diversity, and design) and mode choice alternatives (e.g., auto, transit, bike, walking) are complex and still the subject of much debate. We defer discussion of development of a detailed additionality test. Here we focus on the legal conditions necessary to establish a viable system for incorporating land use and transportation projects into the market. The framework established under SB 375 for modeling the GHG impacts of alternative land use and transportation systems will develop the technical tools and analytic capabilities necessary to estimate the GHG effects of transportation-related land use projects. SB 375 § 2, CAL. GOV'T.CODE § 14522.1 (West 2008) requires the CARB to maintain guidelines for travel demand models that will then be the basis for modeling the GHG emissions impacts (required under SB 375 § 4, CAL. GOV'T CODE § 55080(b)(2)(G)) associated with the adoption of a sustainable communities strategy required under CAL. GOV'T CODE § 55080(b)(2). The same modeling conventions would be used under CAL. GOV'T CODE § 55080(b)(2)(H) to develop an alternative planning strategy if the sustainable communities strategy does not meet the regional GHG emissions reductions targets assigned by CARB to each MPO under SB 375.
283. Determining the "baseline" condition, as demonstrated through implementation of the CCAR Forestry Protocols, is not a trivial task. It is basic economics that increasing land costs increase densities for infill projects, for example, but they also increase pressure for more distant greenfield development that increases VMT and GHG emissions. It is also unclear how SB 375 may change the "baseline:" is it with or without the adopted SCS or APS?
284. One of the greatest obstacles to mass transit projects is lack of funding. Interview with Doug Johnson, S.F. Bay Area Metro. Transp. Comm'n, in Oakland, Cal. (Oct. 2, 2007).
285. Financial feasibility played a strong role in securing the Bogota BRT project under the Kyoto CDM additionality test. See BOGOTA DESIGN DOCUMENT, supra note 146, at 12.
286. Gary Richards, BART Chugs Along, for Now: VTA Allocates $185 Million in Hopes of Future Funding, SAN JOSE MERCURY NEWS, Dec. 15, 2006, available at http://www.mercurynews.com/ ci 4846546. For comparison, the estimated costs of a proposed 800-mile high speed rail system from the San Francisco Bay Area through the Central Valley to Los Angeles would be around $40 billion ($50 million per mile). California High Speed Rail Authority, Financing California's High-Speed Train System, http://www.cahighspeedrail.ca.gov/news/ FUNDINGlr.pdf (last accessed Nov. 30, 2008).
287. Richards, supra note 227.
288. Our use of this BART illustration does not represent an endorsement of the BART extension proposal. Indeed, $4.7 billion could possibly achieve much greater increases in transit ridership and reductions in GHG emissions if spent instead on other projects. In a properly operating offset market, however, the economic value of the GHG reductions would make cost-effective many projects that would otherwise go unfunded (assuming that those projects receiving offset payments achieve GHG emission reductions for less cost than achieving the same level of GHG reductions at a more expensive stationary source regulated under AB 32).
289. As discussed in Part IV, additionality as originally defined by the Kyoto Protocol requires that CDM offset projects originate outside of an existing legal obligation. Determining whether CEQA creates an existing legal obligation (even in the absence of AB 32) to reduce emissions for additionality purposes may also determine whether CEQA offset projects will qualify under the Kyoto Protocol, if California ever wishes to link its cap-and-trade scheme to this international trading system. (We assume that SB 375 imposes no new or separate legal obligations to reduce GHGs through transportation-related land use projects, since its structure is incentives-based. SB 375 raises complicated issues, however, in relationship to legal additionality that we are not able to analyze here.)
290. We want to distinguish between two conditions under which this conclusion may or may not be valid: (1) given the passage of AB 32, is the obligation to mitigate the impacts of GHG emissions a result of AB 32 or independent of AB 32?, versus (2) in the absence of AB 32, would there be a CEQA obligation to mitigate the impacts of GHG emissions independent of AB 32's existence? Our position is that there would be a CEQA obligation to mitigate GHG emissions even if AB 32 did not exist-but, given its passage (and the reliance of the Attorney General on AB 32's existence in determining that there was an obligation under CEQA to mitigate the impacts of GHG emissions), the CEQA obligation now exists as a result of AB 32-making CEQA mitigation "additional" in accordance with the legal additionality criteria employed under the Kyoto CDM system for establishing offsets.
291. Similarly, ConocoPhillips arguably was meeting its regulatory obligations to CARB and EPA in proposing the hydrogen facility in Contra Costa County. The agreement to mitigate and offset this new facility suggests that the Attorney General's Office and/or ConocoPhillips believe that AB 32 has created a new obligation to offset emissions even for actions taken to meet other regulatory requirements.
292. See CAL. HEALTH & SAFETY CODE § 38550 (West 2008) (mandating that GHG emissions be reduced to 1990 levels).
293. OPR TECHNICAL ADVISORY, supra note 202, at 3. OPR subsequently issued draft guidelines, proposing to amend fourteen sections of the CEQA Guidelines to comport with its Technical Advisory. See CAL. GOVERNOR'S OFFICE OF PLANNING AND RESEARCH, PRELIMINARY DRAFT CEQA GUIDELINE AMENDMENTS FOR GREENHOUSE GAS EMISSIONS V (January 2009), available at http://opr.ca.gov/ index.php?a=ceqa/index.html.
294. S. 375, Gen. Assem., 2007-2008 Reg. Sess. (Cal. 2008) (to be codified in scattered sections of the CAL. GOV'T CODE and at CAL. PUB. RES. CODE § 21,155). California Government Code section 65,080 outlines the regional target-setting process.
295. This is a conclusion based on first impression; we have not been able to analyze SB 375 in detail.
296. Settlement Agreement, State v. San Bernardino County, supra note 12, at 3.
297. Id.
298. Attorney General Jerry Brown, Window is Closing Fast on Climate Change: Scientists Say the Next Two to Three Years are Critical, CAL. COUNTIES (Jan./Feb. 2008) at 17, available at http:// ag.ca.gov/globalwarming/pdf/CSAC-Article-Jan2008.pdf.
299. Settlement Agreement, State v. San Bernardino County, supra note 12, at 3.
300. The CARB staff recently stated that "CEQA provides a mechanism that is independent of AB 32 through which lead agencies can begin immediately to reduce the climate change-related impacts of projects that come before them." California Air Resources Board, Preliminary Draft Staff Proposal, Recommended Approaches for Setting Interim Significance Thresholds for Greenhouse Gases under the California Environmental Quality Act, at 4 (Oct. 24, 2008).
301. This statement suggests that the CARB may view such obligations as (1) independent of AB 32, and (2) discretionary ("can" rather than "must" or "shall" suggests discretion on the part of the lead agency). In addition, some ambiguity remains whether CARB currently has the authority to regulate transportation-related land use under AB 32. The Pavley Bill, which regulates emissions from transportation, specifically excludes any sort of regulation by the Board of practices influencing vehicle miles traveled. ASSEMBLY BILL 1493, 2001-2002 Reg. Sess.
302. Legislative Counsel's Digest at 2, codified at CAL. HEALTH & SAFETY CODE §§ 42,8823, 43,018.5, available at http://www.calcleancars.org/abl493.pdf ("This bill would prohibit the state board from imposing a mandatory trip reduction measure or land use restriction.").
303. AB 32 references the Pavley Bill, stating that the "state board shall implement alternative regulations to control mobile sources" of emissions if the Pavley Bill does not "remain in effect." CAL. HEALTH&SAFETY CODE § 38,590 (West 2008). Arguably, this suggests that AB 32 is subservient to the Pavley Bill. A Senate committee hearing on this topic in mid-2006 discussed deferring to the Pavley Bill unless it fails to be implemented or California fails to achieve a reasonable level of emissions from the transportation sector. California Global Warming Solutions Act of 2006: Greenhouse Gases, Hearing on A.B. 32 Before the S. Comm. On Envtl. Quality, 2005-2006 Reg. Session (Cal. 2006), available at http://www.assembly.ca. gov/ acs/acsframeset2text.htm.
304. Guidelines for Implementation of the California Environmental Quality Act, CAL CODE REGS, tit 14, § 15040(a)(2008).
305. Id. at§ 15040(c).
306. OPR has sought recommendations from CARB regarding significance thresholds for CEQA mitigation for greenhouse gasses under SB 97, OPR TECHNICAL ADVISORY, supra note 202, at 8, and CARB issued its Preliminary Staff Proposal on October 24, 2008.
307. See CAL. AIR RES. BD. PRELIMINARY STAFF PROPOSAL: RECOMMENDED APPROACHES FOR SETTING INTERIM SIGNIFICANCE THRESHOLDS FOR GREENHOUSE GASES UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (October 24,2008), available at http://www.opr.ca.gov/ceqa/pdfs/Prelim-Draft-Staff-Proposal- 10-24-08.pdf. Cf. infra note 246.
308. CAL CODE REGS, tit 14, § l5064(b).
309. See OPR TECHNICAL ADVISORY, supra note 202; Settlement Agreement, State v. San Bernardino County, supra note 12. A significant effect is generally not defined under CEQA, but significance thresholds for particular types of impacts have developed through time as a matter of agency discretion and litigation.
310. An overall emissions reduction target tied to the overall requirements of AB 32 (estimated to be about an 11 percent reduction) would be reasonable, however. This would be analogous to meeting an ambient air quality standard for air pollutants under the Clean Air Act; CEQA analysis typically treats compliance with such standards as satisfying the requirement that projects not cause significant adverse impacts. Failing to meet a regulatory standard under the CAA would clearly cause a significant adverse impact, however, requiring mitigation under standard CEQA practice. CAL. CODE REGS. tit. 14 § 15065(a)(l) (2008) requires "mandatory findings of significance" if "[t]he project has the potential to: substantially degrade the quality of the environment . . . ." Section 15065(a)(4) requires mandatory findings of significance if "[t]he environmental effects of a project will cause substantial adverse effects on human beings, either directly or indirectly." All criteria air pollutants under the federal Clean Air Act have been determined to cause adverse effects satisfying both subsections 15065(a)(l) and 15065(a)(4), so non-compliance is a significant effect. One could therefore treat AB 32's overall emissions reduction goals as analogous to a threshold of significance under CEQA-any emissions reductions beyond the overall percentage reductions required under AB 32 would be " additional" and therefore eligible for offset credit. However, this approach seems inappropriate if CARB implements AB 32 in a manner that explicitly excludes such obligations for land use and transportation projects. In that case, the threshold of significance could be either existing or baseline GHG emission levels.
311. Guidelines for Implementation of the California Environmental Quality Act, CAL CODE REGS, tit 14, § 15,040(b)(2008).
312. Cal. Pub. Res. Code § 21,083.05 (West 2008) (The Office of Planning and research (OPR) "shall prepare, develop, and transmit to the Resources Agency guidelines for the mitigation of greenhouse gas emissions" and the Resources Agency shall "certify and adopt guidelines prepared and develped" by OPR).
313. The OPR Technical Advisory does not suggest a strong inclination by OPR to issue heavy-handed guidelines that would preclude additionality; the advisory proscribes that agencies follow the existing case-by-case CEQA mechanisms in reviewing the environmental impact of GHG emissions. See generally OPR TECHNICAL ADVISORY, supra note 202, at 5-6. Alternatively, if OPR establishes certain mitigation requirements under CEQA, then investment projects that go above and beyond CEQA requirements may be a good fit for carbon offset credits under AB 32. For example, if CEQA should in the future require that all new large-scale housing developments apportion 5 percent of the project cost to mass transit projects, then a financial investment beyond this 5 percent should be able to claim the remainder in carbon offsets.
314. CEQA allows agencies to approve land use projects in spite of significant environmental impact, under certain circumstances. CEQA requires lead agencies to weigh the economic, legal, social, technological, and other benefits of a proposed project against its environmental effects. Guidelines for Implementation of the California Environmental Quality Act, CAL CODE REGS, tit 14, § 15093(a) (2008).
315. If one or more of these specific benefits outweigh the environmental effects, the effects may be treated as acceptable. These benefits must be documented in a statement of overriding considerations. Id. § 15093(b).
316. In addition, lead agencies may approve a project with significant environmental impact so long as they document that economic, legal, social, technological, or other considerations make mitigation infeasible. Id. § 15091(a)(3).
317. It is possible that some lead agencies may opt to avoid certain levels of emissions mitigation by claiming infeasibility or overriding considerations. Carbon offsets could reduce the probability of this occurring, by offering a funding source to address environmental impacts that are particularly burdensome for lead agencies to mitigate. Ironically, then, treating GHG emission reductions under CEQA as discretionary will tend to reduce the avoidance of such reductions due to discretionary use of the "overriding considerations" safety valve that cities and counties often use to avoid CEQA mitigation.
318. See Press Release, Office of the Attorney Gen., Cal. Dep't of Justice, Brown Announces Landmark Global Warming Settlement (Aug. 21, 2007), available at http://ag.ca.gov/newsalerts/ release.php?id=1453.
319. Land use and transportation investments set the structure for decades of future energy use, so there is also an important path-dependency argument in favor of ensuring that land use and transportation investments are pursued. Light bulbs, appliances, and vehicles turn over in years or a couple of decades, so any failure to invest in the most energy-efficient options in those sectors can be remedied relatively soon compared to land use and transportation.
320. SCOPING PLAN, supra note 15, at 68.
321. MOORE, supra note 30, at 220 (discussing regional-level of transportation planning).
322. See Guidelines for Implementation of the California Environmental Quality Act, CAL CODE REGS, tit 14, § 15051(b).
323. CEQA, CAL. PUB. RES. CODE § 21067 (West 2008).
324. Id. §21080.1.
325. CAL CODE REGS, tit 14, § 15381.
326. Id. § 15050.
327. Id. § 15051(b)(l).
328. See Clean Water Act, 33 U.S.C. § 1344 (2006)
329. Leonard Shabman&Paul Scodari, The Future of Wetlands Mitigation Banking, CHOICES, 1st Quarter 2005, available at http://www.choicesmagazine.org/2005-l/environment/2005-l-13.htm.
330. The U.S. EPA adopted a new Final Rule for Compensatory Mitigation for Losses of Aquatic Resources (which govern wetland mitigation banks) on April 10, 2008. 40 C.F.R. Pt. 230 (2008); 19,594 Fed. Reg. Vol. 73, No. 70.
331. C3AL. DEP'T OF FISH & GAME, REPORT TO THE LEGISLATURE: CALIFORNIA WETLAND MITIGATION BANKING 3-4 (2005)
332. available at http://www.dfg.ca.gov/habcon/conplan/mitbank/ Wetlands%20Bank%20Leg%20Report%202005.pdf.
333. Id. at 6-7. The Department of Fish and Game establishes reporting requirements for banks when they are created so that the Department can satisfy its reporting requirements to the legislature pursuant to CAL. FISH & GAME CODE § 1851 (West 2008).
334. Id. at 4.
335. PAUL SCODARI & LEONARD SHABMAN, U.S. ARMY CORPS OF ENG'RS, REVIEW AND ANALYSIS OF IN LIEU FEE MITIGATION IN THE CWA SECTION 404 PERMIT PROGRAM 8 (2000), ava(7a6/ea/http://www.iwr.usace.army.mil/inside/ products/pub/iwrreports/IWRReport-ILF-Nov00.pdf.
336. Id.at 23.
337. SB 375 calls for each "transportation planning agency" to "prepare and adopt a regional transportation plan." That plan must then include "a sustainable communities strategy prepared by each metropolitan planning organization." SB 375, 2008 Cal. Legis. Serv. Ch. 728 (West) (to be codified in scattered sections of the CAL. GOV'T CODE and at CAL. PUB. RES. CODE § 21155).
338. This banking role is already being considered by at least one California agency. The South Coast Air Quality Management District is considering creating a regional carbon offset bank, the SoCal Climate Solutions Exchange. This program would feed into existing California Climate Action Registry Protocols for carbon offsets and GHG emissions. S. COAST AIR QUALITY MGMT. DIST., WHITE PAPER: SOCAL CLIMATE SOLUTIONS EXCHANGE 2008, available at http://www.aqmd.gov/ hb/attachments/2008/June/080637B.doc.
339. This level of administration would require a permanent funding source. A partial solution to this may be to allot a small percentage of offset investment dollars from each project to an offset administration fund. This configuration is being used under the Kyoto Protocol Clean Development Mechanism to fund expenses related to the administration of the CDM. Under the Kyoto Protocol, 2 percent of proceeds from certified emissions reductions activities under the Clean Development Mechanism go to a UNFCCC registry to fund administration of the CDM program, as well as to fund projects in developing countries for adaptation to climate change. Farhana Yamin, The International Rules on the Kyoto Mechanisms, in CLIMATE CHANGE AND CARBON MARKETS: A HANDBOOK OF EMISSION REDUCTION MECHANISMS 1, 30 (Farhana Yamin ed., 2005).
340. CARB could also delegate the task of approving and monitoring land-use related offset projects to the California Climate Action Registry (CCAR), which already had assumed this role with respect to the forest sector even before CARB was assigned responsibility for implementing AB 32. We have some serious reservations, however, about the quality of the offsets that may
341. The Protocol is currently being updated, which may address some of our concerns. Whether developed by CARB or the CCAR, transportation-related land use offset projects should be required to meet the more rigorous standard of the Kyoto Protocol in order to ensure genuine GHG emission reductions are achieved.
342. Meeting the Kyoto Protocol standard may also create opportunities for international offset trades under a post-2012 successor to the Kyoto Protocol if the United States ratifies such a treaty (such trades are not presently allowed under the Kyoto Protocol because the United States has not ratified the treaty).
343. See Kyoto Protocol Decision 3/CMP.l, Modalities and Procedures for a Clean Development Mechanism, FCCC/KP/CMP/2005/8/Add. 1 (March 30, 2006) 1 37(e), available at http://cdm.unfccc.int/ Reference/COPMOP/08a01 .pdf#page=6. Post-project monitoring has also proven to be an essential step in assessing the effectiveness of mitigation projects in the wetland banking context under section 404 of the Clean Water Act. Lisa G. Berry Engler, Compensatory Wetland Mitigation in North Carolina: Evaluating the Ecosystem Enhancement Program 32 (2005) (unpublished M.S. thesis, Duke University), available at www.nicholas.duke.edu/wetland/mp/Berry05.pdf. See also PAUL MINK1N & RUTH LADD, U.S. ARMY CORPS OF ENG'RS, SUCCESS OF CORPS-REQUIRED WETLAND MITIGATION IN NEW ENGLAND 1, 18, 21 (2003), available at http://www.mitigationactionplan.gov/USACE%20New%20England% 20District%20Mitigation%20Study.pdf (identifying significant quality issues with wetland mitigation projects and attributing this in part to lack of sufficient monitoring).
344. Modalities and Procedures, supra note 123, at 34, 38.
345. Id. at 31.
346. Yamin, supra note 272, at 31-33.
347. See UN Framework Convention on Climate Change, Project Cycle of the Clean Development Mechanism, http://unfccc.int/files/meetings/workshops/ othermeetings/application/pdf/ howard.pdf (last accessed Nov. 30, 2008);
348. Modalities and Procedures, supra note 123, at 40-41.
349. The Environmental Impact Statement (EIS) review process under the National Environmental Policy Act (NEPA) could also be modified along these lines to evaluate similar projects at the federal level that may qualify for offsets under either Kyoto (if the United States were to ratify the treaty) or its successor under the UNFCCC.
350. Modalities and Procedures for a Clean Development Mechanism, supra note 275, at 1fl| 37(c), 44.
351. CEQA requires that the "no project alternative" or a baseline always be considered. Guidelines for Implementation of the California Environmental Quality Act, CAL CODE REGS, tit 14, §§ 15125(a), 15126.6(e)(2008).
352. Id. § 15126.6(b).
353. Id. § 15126.6(c).
354. Id. § 15091(3).
355. Addilionality Tool, supra note 139, at 4-11.
356. Alternatives feasibility, CAL CODE REGS, tit 14, § 15126.6(f)(l), and mitigation feasibility, id. § 15091.
357. As identified in Figure 7, investment barriers are not an explicit feasibility consideration under CEQA EIR review, although economic/financial barriers arguably encompass investment barrier considerations under CEQA. The financial/investment barriers associated with transportation-related projects are arguably the most prominent barriers to project execution, and therefore deserve a prominent role in any CEQA additionality standard.
358. The existence of a comprehensive environmental review process under CEQA-which has been criticized as costly in terms of getting projects approved in the state-therefore actually facilitates integration of California projects into any international offset credit system. Jurisdictions without an existing review process will need to develop similar review processes to demonstrate additionality, so California and other jurisdictions with CEQA-style impact assessment procedures have an administrative advantage in developing verifiable offset projects.
359. SB 375 requires important changes to the modeling protocols used by regional transportation agencies that should make it easier to calculate the GHG emissions associated with alternative transportation-related land use projects.
360. Ann Notthoff, Natural Resources Defense Council, Panel Comments at the Environmental Law Conference at Yosemite (Oct. 19, 2008).
361. Moreover, the SCS development process will ensure a publicly transparent opportunity for the modeling assumptions underlying those GHG emissions calculations to be critiqued and developed for improved verifiability. Nonetheless, the issue of what a region's "baseline" GHG emissions-and the impact of the SCS-will remain fraught with high levels of uncertainty and opportunities for gaming in order to develop regional plans that appear to meet CARB's regional targets (but may not be able to meet them in practice).
362. LEONARD SHABMAN & PAUL SCODARI, RESOURCES FOR THE FUTURE, PAST, PRESENT AND FUTURE OF WETLANDS CREDIT SALES 15-16 (2004), available at http://www.rff.org/Documents/RFF-DP-04-48.pdf.
363. Id. at 14.
364. SCODARI, supra note 268, at 3 (discussing high up-front capital costs of developing mitigation banks).
365. SHABMAN, supra note 291, at 8-13.
366. See 40 C.F.R. § 230.10(a) (2008) (requiring that a permit cannot be issued under section 404 "if there is a practicable alternative to the proposed discharge which would have less adverse impact on the aquatic ecosystem, so long as the alternative does not have other significant adverse environmental consequences").
367. This is sometimes called the "Least Environmentally Damaging Practicable Alternative" requirement. Mitigation can therefore only be approved if there is no other alternative (e.g., relocating the development, changing its design) with less environmental impact.
368. This uncertainty is coupled with increasing uncertainty about the scope of federal jurisdiction over wetlands regulation under section 404 of the Clean Water Act in the wake of several complex and confusing decisions by the U.S. Supreme Court on the matter.
369. See Rapanos v. United States, 547 U.S. 715 (2006); Solid Waste Agency v. U.S. Army Corps of Eng'rs, 531 U.S. 159 (2001);
370. Mark Latham, Rapanos v. United States: Significant Nexus or Significant Confusion? The Failure of the Supreme Court to Clearly Define the Scope of Federal Wetland Jurisdiction, in THE SUPREME COURT AND THE CLEAN WATER ACT: FIVE ESSAYS 6-21 (2007), available at http://www.vjel.org/books/pdf/ PUBS10004.pdf (discussing the uncertainty created by the Rapanos court regarding which rules should apply to determine federal regulatory jurisdiction under the Clean Water Act).
371. In contrast, in what is called a fee-based mitigation banking program, the seller of the credits is usually an independent private third party-also known as a commercial wetland mitigation bank. As the EPA notes, "Mitigation banks are a form of 'third-party' compensatory mitigation, in which the responsibility for compensatory mitigation implementation and success is assumed by a party other than the permittee.
372. This transfer of liability has been a very attractive feature for Section 404 permit-holders, who would otherwise be responsible for the design, construction, monitoring, ecological success, and long-term protection of the site." U.S. Envtl. Prot. Agency, Mitigation Factsheet, http://www.epa.gov/ owow/wetlands/facts/factl6.html (last visited Feb. 20, 2009).
373. The idea of accepting cash donations in return for offset credits may also be worth investigating, so long as the funded projects are of high quality and meet additionality standards. Such donations could prove particularly useful to municipalities such as Berkeley with ambitious climate change plans that are looking for funding sources to execute those plans. A regional entity facilitating CEQA carbon offset projects may be suited to channel donation funding into appropriate carbon offset projects. The Army Corps of Engineers has approved offsets based on cash donations to ongoing mitigation projects led by NGOs and governmental agencies.
374. See SHABMAN, supra note 291, at 27. The Water Resources Development Act (WRDA) of 2007 identifies mitigation banking as the preferred mechanism for offsetting unavoidable wetland impacts associated with Corps Civil Works projects. U.S. Envtl. Prot. Agency, Mitigation Banking Factsheet, http://www.epa.gov/owow/wetlands/facts/ factl6.html (last visited Feb. 20, 2009). However, donations receive criticism because they circumscribe the offset market, and have historically been subject to a less rigorous quality review.
375. See SHABMAN, supra note 291, at 27. Addressing these issues with respect to carbon offsets would become important if cash donations are allowed.
376. Development and implementation of a carbon offset protocol for the Forestry Sector in California also demonstrates the challenges and opportunities of crafting an effective offset program. Cf. supra notes 175-179 and accompanying text.