How an environmental law is harming the environment

The state Legislature adopted the California Environmental Quality Act more than 40 years ago. But today, anti-growth activists are now using the landmark environmental law to stymie projects that would help fight climate change.

In the past few years, a consortium of business and some labor groups in California has pushed for sweeping reforms of the law. And this year, they hope to convince legislators in Sacramento to overhaul it. They already have a powerful ally in Democratic Gov. Jerry Brown. As mayor of Oakland, Brown witnessed firsthand the use of CEQA to block smart growth and has called reforming the law “the Lord’s work.”

Although many environmental groups recognize that CEQA is sometimes misused, they staunchly oppose the most recent calls for reform out of fear that the law will be gutted. They correctly note that CEQA still plays a vital role in protecting California’s numerous endangered and threatened species, and provides an important check on suburban and rural growth projects, highway expansions, and proposals for new refineries and fossil-fuel power plants. Over the years, CEQA also has helped protect low-income communities from toxic incinerators and landfills.

From that perspective, the law does not need to be overhauled. But there is ample evidence that it does need reforming, particularly when it comes to smart growth and transit-oriented development.

“It has gotten in the way of projects that arguably should be considered environmentally sustainable,” noted Jeremy Madsen, executive director of Greenbelt Alliance. “Climate change has changed the whole game.”

Indeed, the numerous threats posed by climate change prove definitively that aspects of California’s signature environmental law are woefully out-of-date.

According to a 2009 report from the U.S. Environmental Protection Agency, the nation’s transportation sector produces 28 percent of all greenhouse-gas emissions in the country, and that figure rises to as much as 40 percent in some states, including California.

According to a 2010 UC Irvine study, rural and suburban residents in California consume up to nearly three times as many gallons of fossil fuel each year as city dwellers.

And while many Republicans still claim that climate change is a hoax, a new study released earlier this month revealed that global temperatures are higher now than at any time in the past 4,000 years.

Even Wall Street is betting on the fact that climate change is going to unleash serious impacts on the environment. Recently, Bloomberg Businessweek reported that Wall Street hedge funds and other firms are pumping loads of cash into financial ventures that hope to profit from the severe effects of global warming.

But CEQA, because it was adopted more than four decades ago, is not designed to adequately address the multiple threats on the environment posed by climate change. Many smart-growth projects, for instance, do not receive proper credit for supplying housing close to jobs so that people can walk, bike or take mass transit to work. Instead, the law, and the anti-growth activists who use it to block smart growth, still treat all development—be it urban, suburban or rural—as essentially the same.

“The fact that development can be done that is environmentally beneficial is a new paradigm,” noted Madsen of Greenbelt Alliance, which supports modest reforms to CEQA to encourage more smart growth.

According to a recent study by the law firm Holland & Knight, 59 percent of the development projects challenged under CEQA in state appellate courts or the California Supreme Court from 1997 to 2012 involved infill development. In addition, the prospect of spending years in litigation sometimes prompts developers to just give up on their projects—which is exactly what people often referred to as NIMBYs (short for “not in my backyard”) want to happen.

“The law has become so dysfunctional,” said Jennifer Hernandez, an attorney for the Holland & Knight firm, who advocates for broad reforms of CEQA. “To call this environmental protection anymore … it’s really about quality-of-life” issues.

Although CEQA was patterned after the National Environmental Policy Act, it has unique characteristics. Similar environmental laws in other states only allow bona fide environmental groups to sue to block development, said Hernandez. But that’s not the case in California. Here, virtually anyone can file a lawsuit under the state’s primary environmental law.

California also does not require transparency. Groups who sue to block development do not have to disclose the identities of their members or who funds them, Hernandez said.

And sometimes, businesses just do it openly. The CEQA Working Group, a coalition of business and labor organizations that wants to broadly reform the law, has been chronicling instances in which CEQA has been misused. One example involves the owner of a San Jose gas station, Andy’s BP, who filed a CEQA lawsuit in 2010 against his competitor across the street, Moe’s Stop gas station, because the owner of Moe’s wanted to add three gas dispensers to his business. The owner of Andy’s BP cited “traffic impacts”—and won in court, forcing the owner of Moe’s to conduct a full-blown environmental impact report.

Ultimately, the owner of Moe’s completed the EIR and installed his gas dispensers. But the whole process cost him $525,000 more than it would have had he not been sued.

“That’s not allowed in any other state,” Hernandez said of environmental lawsuits filed by one business to block a competitor’s project.

California legislators, however, are unlikely to change the law to require transparency in CEQA lawsuits or limit the filing of them to environmental organizations. The reason, Hernandez explained, is that unions sometimes file CEQA litigation—or threaten to do so—when a project does not guarantee that it will employ union labor. As a result, there’s no appetite in the Democratic-controlled Legislature “for even requiring disclosure,” Hernandez said.

Before he resigned last month to take a job with Chevron Corp., Michael Rubio, a moderate Democratic state senator from Bakersfield, had been leading the charge for a sweeping overhaul of CEQA. But Rubio’s reform proposals were not limited to smart growth in cities, and likely would have paved the way for more suburban and rural projects as well. Understandably, many environmental groups responded with concern.

Senate President Pro Tem Darrell Steinberg is an advocate for smart growth and is expected to take a more cautious approach to reform now that Rubio is gone. Steinberg is the author of Senate Bill 375, a landmark climate-change law enacted in 2008 that is designed to increase urban density in California. Nonetheless, several prominent environmental groups, including the Sierra Club and the Center for Biological Diversity, still oppose the push for CEQA reform this year out of concern that the Legislature will render the law toothless.

However, fears that the Legislature will gut CEQA this year appear to be overblown—precisely because some environmental and labor groups (the labor community is divided over whether to reform the law) fervently oppose such a plan. It seems far-fetched to believe that Democrats will vote for proposals that substantial portions of their two main constituencies don’t want.

And that’s a good thing. CEQA still has a vital role to play in protecting our environment, as it should. One would be hard-pressed to make a case for reforming an environmental law so as to green-light more suburban development or more pollution-causing projects.

California also still needs environmental protections in urban areas for industrial projects that put people’s health at risk.

But for urban centers and areas on or near major transit corridors, there’s still plenty of room for reform. City dwellers who don’t want more traffic in their neighborhoods shouldn’t be able to use the state’s main environmental law to block projects that actually help the environment overall.

And this misuse of the law likely won’t stop as a result of incremental reform. Instead, the only sensible solution is to exempt all smart growth—urban transit-oriented development projects that are designed for housing or a mix of retail or commercial space and housing—from CEQA lawsuits.

The primary environmental law should protect the environment against the greatest threat it faces—climate change—and not make it harder to implement solutions that help fight that threat.