The technical question involves measuring the effect individual projects could have on climate change. CEQA generally prohibits "projects" from proceeding if they have significant, unmitigable impacts. "Projects" include permit decisions over which the agency has a choice, so the law applies to a great deal of private economic activity. The question raised by the court's decisions is, what do you mean by "significant"? In the first case, the court held that the business-as-usual standard was inadequate by itself; instead, the court required that agencies also address the significance of each project's GHG production. In the second case, the Bay Area Air Quality Management District (BAAQMD) had established a significance standard for GHG emissions in 2010 only to have a lower court invalidate the standards. The state Supreme Court garbled the case by ordering another court to re-evaluate what it had thought the relevant "environment" was.

The first case means that California insists on mitigating the significant impacts of new economic activity on climate change, while refusing to explain what makes an impact "significant." The second case means that it will be at least several more years before the state's judges explain what they want.

These cases deal strong blows to economic activity in the state, and to the reliability of the state's business climate. California's political climate has made almost all new developments require permits that agencies do not have to grant, i.e., make them "projects" subject to CEQA. CEQA as passed by the Legislature requires the state's judges to defer to decisions by agencies, but judges have inverted that standard when agencies conclude that a permit decision will not have a significant impact; judges will void those permits, ignoring the agency's evidence, if there is just enough credible evidence to support a "fair argument" of a possible impact. Although the Supreme Court's opinion addressed a housing tract, the decision applies to all new development, such as new business parks—and even existing ones—and expansions of schools or operations that need to renew their permits.

There is no immediate legal solution to these problems. The Supreme Court's first opinion offered two possible legal solutions, but prefaced them by saying it could not "guarantee" that either would actually result in legally adequate environmental analyses, i.e., solve the problem it was creating. Although the project in the first case was a large housing tract, the court did not limit its decision to large housing projects; it did not even say what it meant by "large." The notion that there is a level of "significance" for individual projects is absurd to begin with, as even the most zealous climate activists admit that there is no reliable formula linking any particular amount of GHG emissions to any particular change in global temperatures. The Legislature is unlikely to resolve this problem, as its tendency of late has been to compel even further reductions in GHGs with little or no regard for cost.

The only certain practical solution is thus the typical California one: increase costs, in this case by eliminating GHGs, or reduce them to some unknowable, microscopic level. Because CEQA requires using all practical mitigation, this will not come cheaply. For years, various environmentalist sources have been producing "mitigation measure" wish lists that range from "education" programs to mandatory ride sharing to paying for trees to limiting or even criminalizing water use. (California's view of what contributes to climate change is all-encompassing.) Computer models of what generates GHGs cannot account for the value of some of these measures, adding to the uncertainty.

This is the same path that has led to the state's gas prices being a third higher than the rest of the Continental United States and housing prices that go through the figurative roof, the same path that has led the state to slowly splitting into have-lots and have-nots and that has led the state to having the highest cost-adjusted poverty rate in the nation. And it all came down to an "interpretation" of a technical issue about environmental analyses.