Fighting climate change in California: navigating burdens, opportunities

Drought, wildfires and "bomb-cyclone" rains are dramatic examples of how climate change affects our state. The proposed solutions are as complex as the problem, presenting both investment opportunities and burdens. Internationally, the United Nations Climate Change Conference, currently underway in Glasgow, Scotland, brings together the world's leaders to search for commitments to reduce carbon emissions. Nationally, the Biden administration's proposed budget contains more than $550 billion in spending to fight climate change, including tax incentives for alternative energy development, electric vehicles, and infrastructure.

Locally, California is a historical leader in addressing climate change, initiated by the Air Resources Board and its former chair, Mary Nichols. Its initiatives include a cap-and-trade program, low-carbon fuel standards and zero-emission vehicle requirements that serve as a template for the rest of the nation. The state also proposes to spend $3.9 billion in its budget addendum to purchase zero-emission school buses, transit buses, and other transportation vehicles.

These investments are essential to the policy decisions meant to transition our economy. But these policies are also controversial given that they create economic and development opportunities for some and additional obligations for others. Examining the relationships between these groups and the balancing of the policy risks and benefits is complicated, often cross-cutting among various stakeholders in the same communities. California is the world's fifth largest economy -- companies including those in alternative energy, real estate, developers, infrastructure, renewables and recycling must navigate these opportunities along with the opposition to green energy proliferation and the legal intricacies of new laws and regulations mandating climate action.

In particular, they should take special notice of how aggressive federal and state policies are poised to further gain momentum. The U.S. Environmental Protection Agency has recently issued its draft Strategic Plan regarding its priority goals and initiatives, including climate change and environmental justice enforcement. The EPA has also announced a new memorandum of understanding with CalEPA regarding environmental enforcement for environmental justice communities. Companies must consider that even when there is policy support for measures to fight climate change, they may face unexpected opposition from local groups or special interests.

Addressing the Diversity of Local Concerns

For example, cap-and-trade measures have faced challenges as one of California's more proactive policies. These programs provide tradable credits for companies with more efficient means to reduce their emissions, to sell to another company. The overall cap reduces the total amount of emissions but allows greater impacts in certain areas at a cost that will drive its future investment in pollution controls. Grassroots opposition to cap-and-trade programs have arisen from environmental justice groups concerned about the shifting of emission impacts to their communities.

The lengthy and more exhaustive permitting processes for the siting new facilities can also derail clean energy development. These land-use and environmental permitting decisions involve a balancing of the benefits, jobs and impacts of new facilities. Public polls show the majority support renewable energy, but only a small fraction of those supporters is willing to live near a solar or wind farm site. Not-in-my-backyard opposition -- often referred to as "NIMBY" -- to alternative energy projects can sometimes put the brakes on them entirely.

Project proponents have historically faced pushback in areas such as the Bay Area, Los Angeles, Cupertino, San Diego and Napa, to name a few. Aesthetic complaints make up a significant portion of NIMBY arguments, which can result in litigation if not properly resolved. For example, residents of Jacumba Hot Springs in southeastern San Diego County have filed a lawsuit against the county Board of Supervisors and the JVR Energy Park, a 600-acre solar and battery storage project to be developed by BayWa r.e. Save Jacumba et al. v. San Diego County Board of Supervisors et al. (San Diego Super. Ct., filed Sept. 20, 2021). The plaintiffs allege that by approving the project by a 5-0 vote in August, the board violated the California Environmental Quality Act and San Diego County planning and zoning laws. Their complaint has also brought environmental justice concerns into question after the lead plaintiff commented that the project would never have been planned in a more affluent area.

Some may question how California's role as a climate leader may be shaped by socioenvironmental policies as the climate emergency dialogue intensifies over the decade. By working alongside communities to address concerns and highlighting the significant benefits these projects can offer their neighbors -- including job creation, tax revenue and lower energy bills -- developers can further invest locally as stakeholders in the project. These efforts not only make the construction process smoother in the long run but also can considerably mitigate the risk of litigation brought by disapproving community members.

Additionally, companies can appeal to landowners looking to rescind their Williamson Act contracts by offering them easements for land touching the proposed site, should their land become no longer conducive to agricultural production. Landowners can then increase their property value using a wind or solar farm contract through such an exchange, as Williamson Act land is appraised based on agricultural income rather than speculative value.

Wind Energy and Offshore Development

Another potentially contentious initiative on the horizon is Gov. Gavin Newsom's and President Joe Biden's support for offshore wind projects along the California coast. There may be lawsuits concerning how offshore wind infrastructure (e.g., subs, barges and platforms) can impact marine ecosystems. Fishermen often come together to file these lawsuits in the interest of wildlife, such as the Responsible Offshore Development Alliance's complaint against the U.S. Bureau of Ocean Energy Management for approving Avangrid's Vineyard Wind project in southern Massachusetts. Responsible Offshore Development Alliance v. Bureau of Ocean Energy Management (1st Cir., filed Sept. 13, 2021).

California developers facing such opposition must pay close attention to local fishing groups and residential communities' concerns, and in response, conduct robust environmental impact studies to prevent severe detriment to wildlife. Companies should act as a community partner by ensuring that project infrastructure facilitates habitat creation and preservation instead of disrupting marine life. The Morro Bay fishermen on the West Coast have already voiced opposition to the Biden administration's recent approval of a 200-turbine project off the California coast. In response, one prospective developer has met with the local fishing industry to address those concerns, serving as an example to future developers to address the risk of intense backlash from these groups.

Zero-Emission Vehicles and the Necessary Infrastructure

The Air Resources Board has implemented a series of technology-facing policies to encourage the shift from gasoline-powered vehicles to low-emission and zero emission vehicles. These policies -- bolstered by the provisions of the Clean Air Act that permit waivers of federal preemption -- expressly allow California to set its own vehicle emission standards and allow other states to opt into those standards.

While this presents a favorable regulatory environment, companies looking to enter the electric vehicle market should be cognizant of legal risks and red tape that can come with the territory. Building public charging stations can elicit jurisdictional disputes, especially considering California's hyperlocal permitting requirements. More technical issues arise from grid stability concerns that station owners should consider in order to avoid overwhelming its central source of power shared with other consumers. California regulations already allow for time-of-use rates, in which prices vary based on peak and off-peak periods, to encourage charging during times of lower demand (e.g. nighttime). Performing due diligence research on the regulatory agencies that will have jurisdiction over proposed charging stations and any applicable incentives for station builders and owners is paramount.

Risks and entanglements also extend to commercial development. California cities have implemented some of the first bans against natural gas hookups in new construction as a step toward total electrification. Nearly 50 California cities have revised building codes to lower natural gas dependence, such as Encinitas, Santa Barbara, Sacramento, Oakland, San Francisco, Cupertino, Santa Monica and more. Developers looking to move forward in municipalities with such bans should be aware that businesses have filed lawsuits against local governments for enforcing such policies. Pending litigation between local plaintiffs and city governments can dramatically slow or even halt commercial or residential projects. Organizations should keep tabs on this policy conversation in order to stay in compliance with local regulations as well as work to increase overall energy efficiency -- a major selling point in many real estate markets today as buyers become more environmentally conscious.

The First Rule of Ecology

In sum, the first rule of ecology is that everything is connected to everything else. Progressive environmental policies are connected to environmental protection and land use laws, plus other local ordinances or interests that may stand in their way. The efforts to address global warming and climate change will require the political will to adopt sweeping policy choices, plus the flexibility to adapt land use and environmental protection laws to these new initiatives. 