Environmental Impact Report Must Compare Existing Greenhouse Gas Emissions to Those of the Proposed Project

A city approved relocation and expansion of an existing Wal-Mart into a 24-hour Wal-Mart Supercenter.  Opponents of the expansion sued, claiming the project approval violated the California Environmental Quality Act (“CEQA”) because the project’s environmental impact report (“EIR”) inadequately analyzed greenhouse gas emissions, among other deficiencies.  The court of appeal found the EIR’s greenhouse gas emission (“GHG”) analysis was inadequate.  The court of appeal ordered the city to correct the analysis by (1) comparing the proposed project’s GHG emissions with those of the existing project; and (2) by estimating the effects of GHG mitigation measures.  (Friends of Oroville v. Wal-Mart Stores, Inc. (--- Cal.Rptr.3d ----, Cal.App. 3 Dist., August 19, 2013).

Facts

Wal-Mart proposed to relocate and expand the City of Oroville (“City”) store into a Wal-Mart Supercenter offering 24-hour retail and grocery services (“the Project”).  The City prepared an EIR and the City's Planning Commission approved the Project.  A citizen’s group called the Friends of Oroville and others opposed to the Project (collectively, “Plaintiffs”) unsuccessfully appealed to the City Council.  The Plaintiffs then filed suit in county superior court, petitioning for writ of mandate to reverse the approval on the basis that the EIR violated CEQA’s notice requirements, inadequately analyzed potential GHG emissions and hydrological impacts of the Project, and incorrectly concluded the Project could not feasibly contribute its fair share mitigation for year 2030 cumulative traffic impacts.  The trial court denied the petition and the Plaintiffs appealed.

Decision

In a partially published opinion, the Third District Court of Appeal reversed the trial court decision, ordering the City to correct the EIR’s GHG emissions analysis.  The appellate court agreed with the Plaintiffs that substantial evidence did not support the EIR’s conclusion that the Project’s GHG emissions would have a less than significant environmental impact after mitigation.  The court observed that the EIR analyzed GHG emissions in view of section 15064.4 of the CEQA Guidelines which took effect in 2010.  This section requires agencies to use a “model or methodology,” and/or a “qualitative analysis or performance based standards” to analyze GHG emissions.  The section also lists factors for agencies to consider in weighing the significance of GHG emission impacts, including the extent of GHG increase or decrease a project may cause, whether the project exceeds an applicable threshold of significance, and the extent of a project’s compliance with “regulations or requirements adopted to implement a statewide, regional, or local plan” to reduce GHG emissions.

When the EIR was written, the City and the local county air management district lacked a GHG reduction plan.  To fill the gap, the City adopted a threshold-of-significance of whether the Project would interfere with the state’s effort to attain GHG reduction targets in Assembly Bill 32, the California Global Warming Solutions Act (“AB 32”).  As part of AB 32, the State Air Resources Board developed a Scoping Plan containing actions to meet the GHG reduction targets.  To analyze the Project’s GHG emissions, the EIR referred to the Scoping Plan in addition to informal guides on GHG mitigation, such as the State Air Resources Board’s Early Action measures.

The appellate court concluded that the City acted appropriately in adopting AB 32 GHG reduction targets as its threshold-of-significance standard for deciding whether the Project’s emissions would significantly impact the environment.  However, the court held that the City applied the standard incorrectly.  As an example of the “proper way” to apply the AB 32 threshold-of-significance standard, the court referred to the case Citizens for Responsible Equitable Environmental Development v. City of Chula Vista (2011) 197 Cal.App.4th 327.  The Chula Vista GHG analysis took precise stock (quantified in metric tons) of the GHG emissions for both the existing store and the proposed expansion, as well as the tonnage of emissions reductions accomplished through energy saving measures.  The net GHG emissions from the expanded store (after application of energy saving measures) were projected to be 29 percent lower than the existing store emissions levels, meeting AB 32 reduction targets.

In comparison, the court of appeal observed that the Wal-Mart EIR did not analyze the Project’s emissions against the AB 32 threshold-of-significance standard.  Instead, the EIR compared the Project’s operational buildout level of GHG emissions to California’s total 2004 GHG emissions.  The EIR stated that because the proposed Project’s GHG emissions were only 0.003 percent of the state total, the Project’s emissions would not hinder attainment of AB 32 targets and would result in a less-than-significant impact.  The appellate court found that the comparison of the Project’s emissions to those of the entire state produced a “meaningless, relative number to determine insignificant impact” and “conjures a comparison worse than apples to oranges.”

The appellate court also faulted the Wal-Mart EIR for “failing to quantitatively or qualitatively ascertain or estimate” the existing Wal-Mart’s GHG emissions and the effect of Project mitigation measures on GHG emissions.  The court noted that these figures were ascertained in the Target project discussed in Chula Vista.  The court held that without this existing project and mitigation information, there was no way to determine whether AB 32 reduction targets would be met by the Project.

The court disagreed with Wal-Mart’s argument that the EIR properly applied the AB 32 threshold-of-significance by applying energy- and environment-related measures of the AB 32 Scoping Plan to the Project.  The court pointed out that the EIR rejected the transportation-related measures of the Scoping Plan, which the court stated “ignores the elephant in the room--68 percent of the Project’s GHG emissions come from motor vehicles.”  The court reiterated that existing Project emissions were crucial to providing evidence to support the EIR’s analysis.

The court similarly rejected Wal-Mart’s reliance on the EIR’s traffic study.  The court noted that the traffic study was “speculative and contradictory,” at one point concluding that the Project would reduce out-of-town trips for residents but in another stating that the Project would be a retail destination generating 40 mile round trips from neighboring communities.

In conclusion, the court ordered the City to correct its GHG emissions analysis by comparing the proposed Project’s emissions to the existing Wal-Mart’s emissions and by performing a quantitative or qualitative estimate of the effect of mitigation measures on emissions.  The resulting information should then be used to determine whether the Project’s GHG emissions constitute a significant environmental impact based on the AB 32 threshold-of-significance standard.

Topics:  CEQA, Environmental Impact Report, Greenhouse Gas Emissions, Wal-Mart

Published In: Energy & Utilities Updates, Environmental Updates, Commercial Real Estate Updates, Zoning, Planning & Land Use Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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