JMBM Development Rights: Chair of California Air Resources Board Addresses JMBM Business Issues Forum

AB 32 Takes Center Stage

Urban development is a key contributor to climate change and an essential factor in addressing it. California has already begun the process by adopting AB 32, legislation that lays out the framework for action. Basically, AB 32 requires the state to reduce GHG emissions to 1990 levels by 2020. That means reducing the equivalent of 28 percent of emissions across every sector of the California economy. We can achieve this level only with a united effort. The idea behind AB 32 is to place our state on par with countries such as Great Britain and Japan when it comes to GHG emissions. Currently our efforts are being hindered by the Federal government which will not allow us to implement our regulations reducing GHG emissions in passenger cars. We’re in the process of litigating this issue in Federal court.

The transportation sector in California is responsible for about 40 percent of all GHG emissions. One of the best ways to reduce this impact is to implement planning procedures which will limit vehicle miles traveled (VMT). Local governments play a crucial role here in terms of the way they plan and approve projects in their jurisdictions. On every level our planning processes should be aimed at improving land use and transportation patterns to limit VMT because currently this transportation sector is growing at a rate of three percent a year, outstripping populations and any existing technological and fuel innovations. Over 40 national studies have shown conclusively that land use variables are most important in impacting household VMT. These studies also indicate that suburban smart growth measures can reduce these emissions by ten percent, while urban infill development can reduce them by 30 percent or more.

Projects subject to National Environmental Policy Act (NEPA) and/or California Environmental Quality Act (CEQA) requirements are facing increasing pressure to identify and address climate change. The U.S. Supreme Court has ruled that GHG’s fall within the Clean Air Act’s definition of pollutants, thus requiring the U.S. Environmental Protection Agency (EPA) to regulate them. In California there are several CEQA lawsuits citing inadequate environmental review of GHG emissions. These are incentivizing local governments to include analyses of climate change issues for proposed projects. In addition to AB 32, California has adopted SB 97 which requires the Governor’s Office of Planning and Research to prepare guidelines for the feasible mitigation of GHG emissions by July 2009 and have these certified by the Resources Agency by January 1, 2010. Hopefully, this action will establish a single state threshold for such emissions. JMBM will continue to host important policy and decision makers relevant to the real estate industry.