HIGHLIGHTS:

• A recent California First District Court of Appeals decision in Mission Bay Alliance v. Office of Community Investment and Infrastructure et al. affirmed an earlier ruling upholding certification of a Final Supplemental Environmental Impact Report (FSEIR) for a new arena for the Golden State Warriors.
• This is one of the first published appellate court decisions addressing the sufficiency of greenhouse gas (GHG) impacts analysis under California Environmental Quality Act (CEQA) following the California Supreme Court's decision in Center for Biological Diversity v. Dept. of Fish & Wildlife.
• The court rejected challengers’ claim that the FSEIR was required to quantify the project’s GHG emissions and upheld analysis based on consistency with San Francisco’s GHG Reduction Strategy.

The California First District Court of Appeals issued its decision on Nov. 29, 2016, in Mission Bay Alliance v. Office of Community Investment and Infrastructure et al. The Court of Appeals decision affirmed the July 18, 2016, trial court’s decision upholding the Final Supplemental Environmental Impact Report (FSEIR) for a new arena for the National Basketball Association's (NBA) Golden State Warriors by the San Francisco Office of Community Investment and Infrastructure (OCII) on Nov. 3, 2015.¹

Most notably, the decision upheld the City of San Francisco's analysis of greenhouse gas (GHG) impacts under the California Environmental Quality Act (CEQA) based on the project's consistency with San Francisco's Greenhouse Gas Reduction Strategy, and rejected petitioners' claim that the FSEIR must quantify the project's GHG impacts.² The case is one of the first published appellate court decisions addressing the sufficiency of GHG impacts analysis following the California Supreme Court's decision in Center for Biological Diversity v. Dept. of Fish & Wildlife (2015) 62 Cal.4th 204 (commonly referred to as the "Newhall" decision). In that case, the Newhall court identified several pathways that may be appropriate for addressing GHG, but did not "guarantee" that any specific pathway would be sufficient.

This alert highlights the Mission Bay Alliance decision's key holding regarding GHG impacts analysis and identifies factors that support reliance on a performance standard to evaluate GHG impacts under CEQA.

The Warriors Arena Project

The Warriors Arena project would be located on an 11-acre site in San Francisco's Mission Bay South redevelopment plan area, and would include a 488,000-square-foot multipurpose event center to serve as the home of the Golden State Warriors, two office and retail structures, parking facilities and 3.2 acres of open space.

The project was certified by Gov. Jerry Brown in April 2015 as an "environmental leadership development project" under Assembly Bill (AB) 900 (Cal. Pub. Res. Code §§21178, et seq.). The AB 900 certification authorizes streamlined judicial review for CEQA challenges where a project meets certain criteria, including that the project does not result in any net additional emission of GHG, including GHG emissions from employee transportation (Cal. Pub. Res. Code §21183(c)).

The AB 900 application³ included a technical memorandum quantifying the project's direct and indirect GHG emissions. California Air Resources Board staff conducted a technical evaluation of the GHG emission estimates and voluntary mitigation and concluded that the proposed project would not result in any net additional GHG emissions for purposes of AB 900 certification. Although the proposed project's GHG emissions were calculated for the AB 900 application, the FSEIR did not consider GHG emissions quantification as part of the CEQA analysis of GHG impacts and only evaluated the project's consistency with San Francisco's GHG Reduction Strategy. The parties agreed that the Governor's AB 900 certification serves a distinct purpose, and is not a substitute for a CEQA determination on the significance of GHG emissions. Therefore, the Governor’s conclusion that the project would have no net increase of GHG emissions was not material to the court’s holding regarding the sufficiency of the Warriors arena EIR’s analysis of GHG impacts pursuant to CEQA.

Quantification of GHG Impacts Not Required in All Cases

The FSEIR concluded that the Warriors arena project would not have significant GHG impacts because the project would comply with San Francisco's GHG Reduction Strategy. The FSEIR did not include an individual project-specific impact assessment of GHG emissions. Challengers argued that exclusive reliance on performance-based standards such as consistency with San Francisco's GHG Reduction Strategy is inadequate; they asserted that the FSEIR must quantify the project's GHG emissions and calculate the effect of proposed mitigation measures.⁴ The Mission Bay Alliance court flatly disagreed with petitioners’ contention. The court based its decision on three key factors: a) the CEQA Guidelines, b) the Newhall case and c) the San Francisco GHG Reduction Strategy.

a. CEQA Guidelines allow reliance on performance-based standards.

The Mission Bay Alliance court noted that the CEQA Guidelines expressly allow agencies to either quantify GHG emissions from a project or to rely on performance-based standards. The court cited the CEQA Guidelines as granting lead agencies "discretion to determine, in the context of a particular project, whether to: (1) Use a model or methodology to quantify greenhouse gas emissions resulting from a project, and which model to use ... and/or (2) Rely on a qualitative analysis or performance based standards" (CEQA Guidelines §15064.4(a)).

The court cited the California Natural Resources Agency’s reasoning in adopting the CEQA Guidelines: "CEQA does not require quantification of emissions in every instance.... If the lead agency determines that quantification is not possible, would not yield information that would assist in analyzing the project's impacts and determining the significance of [GHG] emissions, or is not appropriate in the context of the particular project, section 15064.4(a) would allow the lead agency to consider qualitative factors or performance standards."⁵ The court further reasoned that GHGs by nature contribute to global climate change but "with little immediate perceptible effect on the locale from which they emanate," and therefore compliance with an area-wide GHG reduction plan may be more useful in determining the significance of emissions than quantification of a project's incremental addition to GHG emissions.

With respect to qualitative GHG impacts analysis, the court cited Guidelines Section 15183.5(b), which authorizes a lead agency to adopt an area-wide plan to reduce GHG emissions and determine that a project's incremental contribution to climate change is not significant if the project complies with the requirements of the previously adopted plan. The court similarly noted that the Bay Area Air Quality Management District (BAAQMD) CEQA Guidelines encourage local agencies to adopt GHG reduction plans and to use those plans in making CEQA determinations.

The court agreed with plaintiffs that the CEQA Guidelines provide that a lead agency should make a good-faith effort, based to the extent possible on scientific and factual data, to describe, calculate or estimate the amount of greenhouse gas emissions resulting from a project, and the extent to which the project may increase or reduce GHG emissions as compared to the existing environmental setting. However, the court concluded unequivocally that "the [CEQA] Guidelines do not compel a numeric estimate of every project's greenhouse gas emissions."

b. The Newhall case allows GHG analysis using performance-based standards.

Petitioners argued that Newhall requires a lead agency to first quantify a project's GHG emissions before analyzing consistency with a GHG reduction plan. The Mission Bay Alliance court noted that while the agency in Newhall did quantify project emissions, the Newhall court did not hold quantification to be necessary in every case. Rather, the Newhall decision identified "potential pathways to compliance" with CEQA, including a performance-based methodology in which an agency evaluates the significance of a project's GHG impacts by "looking to compliance with regulatory programs designed to reduce greenhouse gas emissions." Accordingly, the Mission Bay Alliance court held that compliance with a GHG reduction plan may, standing alone, provide sufficient evidence that the project will have no significant adverse effect on the environment.

c. San Francisco's GHG Reduction Strategy achieves reductions consistent with local and state targets.

The Mission Bay Alliance court's conclusion that the FSEIR appropriately analyzed GHG impacts based on a performance standard was based in part on the adequacy of the San Francisco GHG Reduction Strategy itself. The strategy includes a quantification of baseline levels of GHG emissions and planned reductions from the baseline 1990 level of 25 percent less emissions by 2020, 40 percent less by 2025 and 80 percent less by 2050. The "heart" of the GHG Reduction Strategy is project-specific measures that achieve citywide emissions reductions. The court cited BAAQMD's approval of the San Francisco GHG Reduction Strategy, in which BAAQMD concluded that the City's planned GHG reductions were more stringent than state standards and that San Francisco "is on track for meeting this aggressive target." The court acknowledged that, in fact, San Francisco had successfully reduced GHG emissions by 14.5 percent between 1990 and 2010, despite an 11 percent population increase during the same time period. Accordingly, the court supported the FSEIR's conclusion that the project complies with energy efficiency and conservation standards set by the GHG Reduction Strategy, and thus, is consistent with citywide and statewide GHG reduction targets.

In concluding that compliance with a GHG reduction plan may, standing alone, provide sufficient evidence that the project will have no significant adverse effect on the environment, the Mission Bay Alliance court cited Newhall for the proposition that "[to] the extent a project incorporates efficiency and conservation measures sufficient to contribute its portion of the overall [GHG] reductions necessary, one can reasonably argue that the project's impact is not cumulatively considerable because it is helping to solve the cumulative problem of [GHG] emissions as envisioned by California law." Here, GHG emissions reductions associated with the San Francisco GHG Reduction Strategy had been quantified, including reductions attributable to project-specific measures that would achieve citywide emissions reductions that exceed state standards. Although GHG emissions associated with the Warriors arena were not quantified for the FSEIR, the project was shown to be consistent with measures for which the City had previously quantified GHG emissions reductions and demonstrated that the reductions would help San Francisco attain (and exceed) local and state GHG reduction targets. As such, the underlying quantification of GHG emissions reductions associated with the GHG Reduction Strategy were a key component of the substantial evidence relied on by the Mission Bay Alliance court to uphold the FSEIR's conclusion that the project is compliant with energy efficiency and conservation standards set by the San Francisco GHG Reduction Strategy and that the project therefore would not have a significant adverse effect on the environment in this respect.

Conclusion

While the sufficiency of GHG impacts analysis under CEQA remains an unstable area of the law, the Mission Bay Alliance case is instructive in illustrating factors that would support reliance on consistency with a GHG reduction plan to determine the significance of GHG impacts under CEQA following the California Supreme Court's Newhall decision.
   

Notes

¹ Mission Bay Alliance v. Office of Community Investment and Infrastructure et al. (Court of Appeal of the State of California, First Appellate District, Nov. 29, 2016). The FSEIR prepared for the Warriors arena project tiered from the 1998 Final Supplemental EIR for the Mission Bay North and South redevelopment plans, which had incorporated information from the 1990 EIR for the Mission Bay plan.

² The Mission Bay Alliance decision also found that the FSEIR's analysis of transportation, noise, wind, and toxic air contaminants impacts was adequate, and that the FSEIR appropriately excluded certain issues from further review. Finally, the decision rejected challenges regarding consistency with zoning and issuance of a place of entertainment permit for the event center.

³ The project's AB 900 application and related documentation, including the Governor's Certification and California Air Resources Board Determination, are available online.
 

⁴Similar arguments were made in an amicus brief filed by the Center for Biological Diversity, Coalition for Clean Air, Communities for a Better Environment and the Sunset Coalition in support of the Mission Bay Alliance.

⁵ Citing Cal. Natural Resources Agency, Final Statement of Reasons for Regulatory Action (December 2009).