LOS ANGELES—A recent reversal on an EIR judgment regarding a residential-development project shows that analysis of greenhouse-gas emissions' impact on climate change is complex and can hinder deals and development, Arthur Coon, shareholder and co-chair of Miller Starr Regalia's land-use practice group, tells GlobeSt.com. In a 5-2 decision filed November 30, the California Supreme Court reversed the judgment of the Court of Appeal, which had upheld the EIS/EIR for the controversial Newhall Ranch development project. The high court approved the EIS/EIR's methodology analyzing the significance of the project's greenhouse-gas emissions in terms of reductions from projected "business as usual" emissions consistent with AB 32's statewide reductions mandate, rather than against some absolute numeric limit above the project site's "baseline" emissions. However, it held the GHG analysis lacked supporting substantial evidence and a cogent explanation correlating the project-specific reductions to AB 32's mandated statewide reductions so as to demonstrate consistency with the latter's goals under the approved methodology.

The Court further held the EIS/EIR violated Fish & Game Code § 5515's prohibition on the taking of "fully protected" fish species by including mitigation measures providing for the collection and relocation by USFWS of the unarmored threespine stickleback.

Finally, the Court held—under the particular factual circumstances of the case—that certain issues raised by plaintiffs during an optional public comment period on the Final EIS/EIR were timely raised so as to sufficiently exhaust administrative remedies under Public Resources Code § 21177(a).

GlobeSt.com spoke exclusively with Coon about the decision and what it means for the real estate industry.

GlobeSt.com: What is the most significant takeaway from the CA Supreme Court's decision?

Coon: Analysis of whether a project's GHG emissions are considered a significant contribution to the cumulative impact of global warming/climate change is very complicated. The analysis is mandatory under CEQA, yet there is no single standard or uniform methodology for conducting it. As demonstrated by this split decision, GHG analysis is sui generis. It has unique and confusing aspects, and a seemingly minor flaw can invalidate an EIR and stop or deal a significant setback to a development project.

GlobeSt.com: Where did the Newhall Ranch project EIR's analysis go wrong?

Coon:Ironically, it did a thorough quantitative analysis of the site's existing and the project's projected GHG emissions, both as mitigated and under a hypothetical, unmitigated "business as usual" scenario, and may well have reached the right conclusion—that the project's GHG emissions impacts were not significant. But it didn't "connect the dots" to this conclusion with supporting substantial evidence. There was a missing link, an analytic gap.

GlobeSt.com: What specifically did the analysis do right and wrong?

Coon:The Court held the basic methodology and chosen threshold of significance were sound—it was permissible to measure the project's anticipated reductions in emissions from a hypothetical projected BAU scenario and compare those reductions for consistency with an overall statewide emissions reductions goal, which was also stated in terms of reductions from BAU. However, the Court held that no record evidence validated simply comparing the two resulting numbers—the project-specific 31% reduction from BAU with the AB 32 goal of reducing statewide emissions to 29% below BAU by 2020—and finding project impacts insignificant because its reductions number was greater.

GlobeSt.com: Why was the numeric comparison inappropriate?

Coon:It would be more accurate to say it wasn't demonstrated to be an appropriate or "apples to apples" comparison. The statewide goal cuts across all emissions sources in all industries and economic sectors. But the Court reasoned that even greater percentage reduction could be required of new land development projects to be consistent with the state goal if their characteristics—i.e., the ability to construct new structures and communities with state-of-the-art efficiency—make them relatively "low-hanging fruit" on the GHG emissions reduction "tree." The Court essentially said that without some evidence showing a "one-to-one" correspondence between the unadjusted project and statewide reduction numbers, no one could really know whether the comparison was inapt—i.e., "apples to oranges"—and thus whether or not the project's emissions were relatively "significant."

GlobeSt.com: What can real estate developers and other project proponents and lead agencies do to avoid such a problem and ensure their environmental analyses of GHG are legal?

Coon:The Supreme Court's opinion notes that there are potentially numerous different ways to conduct a CEQA-compliant GHG analysis and goes into some detail about each. The bottom line is that project proponents and lead agencies should hire an experienced environmental consultant and an attorney knowledgeable in recent CEQA developments to counsel them regarding the most appropriate methodology for the particular project at issue. This includes guidance regarding what evidence the record will ultimately need to contain to support the environmental document's critical conclusion as to whether the project's GHG emissions impacts should be considered "significant."