Court of Appeal Rules Setting Thresholds is Not a "Project" Under CEQA - Air District’s CEQA Thresholds for Greenhouse Gases Upheld

Yesterday, the Court of Appeal for the First District issued its ruling in California Building Industry Association v. Bay Area Air Quality Management District. In a win for public agencies, the court held that establishing thresholds of significance is not a “project” subject to its own California Environmental Quality Act (CEQA) review. At issue in this case were the air quality and the greenhouse gas emissions CEQA thresholds adopted by the Bay Area Air Quality Management District in 2010.

The court’s ruling clarifies that as long as a public agency adheres to the process outlined in the State CEQA Guidelines for adopting generally applicable thresholds of significance, the agency is not also required to conduct a separate environmental review of potential impacts of implementing those thresholds. The court held that the State CEQA Guidelines, which require that thresholds be subject to public review and be supported by substantial evidence, do not also require preparation of an environmental impact report or other CEQA document. Such an effort, the court concluded, would be unnecessary and largely duplicative of the process already required.

Under the State CEQA Guidelines, public agencies are encouraged to establish “thresholds of significance” that are to be used to determine the significance of a project’s impacts on the environment. The District has published thresholds of significance for use by agencies conducting CEQA review of projects’ air quality impacts in the San Francisco Bay Area. In response to more stringent federal and state air quality standards and the passage of AB 32, the District updated its local CEQA guidelines in 2010.

The California Building Industry Association (CBIA), concerned that the new thresholds could discourage infill development and make the environmental review process for such development too burdensome and expensive, challenged the thresholds on grounds the District was required to conduct CEQA review of the thresholds prior to their adoption. CBIA alleged that the new thresholds’ focus on the potential impacts of locating development near sources of toxic air contaminants and particulate matter (emissions often concentrated in urban areas) would indirectly push development out into the suburbs, ultimately leading to traffic congestion, air pollution and greenhouse gas emissions that would go unanalyzed. In addition to ruling that the State CEQA Guidelines do not require such a review, the court also reasoned that the CBIA’s alleged environmental impacts were speculative and not reasonably foreseeable.