California's greenhouse gas reduction bill – AB 32 – has received worldwide recognition as cutting-edge policy on global warming, not least because Gov. Arnold Schwarzenegger has chewed up a lot of carbon flying around the world promoting it. Back in Sacramento, however, the hard part is just beginning: Deciding how to actually reduce greenhouse gas emissions in the state.

AB 32 calls for a 20% emissions reduction over the next 13 years. Most of these reductions are expected to come from tighter air pollution standards on stationary sources, such as electricity plants, and from cleaner-burning fuels. But 10-15% of this reduction is expected to come from changes to land use patterns – transit-oriented development, smart growth, or whatever you want to call development patterns that reduce overall vehicle miles traveled and, therefore, tailpipe emissions as well (see CP&DR Insight, April 2007).

The Legislature is heavily focused on how to work land use into the greenhouse-gas reduction mix – primarily through debate over SB 375, a proposal to deal with this question. Not surprisingly, California's local governments and the building industry have been less than enthusiastic about a new layer of state directives that tells them what land use patterns should look like. Both are resisting SB 375 strongly, suggesting that more time is required to work out the details.

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On Thursday morning, August 30, state Sen. Darrell Steinberg made SB 375 into a two-year bill, meaning a final decision on the legislation will not occur until 2008.


Yet it's hard to imagine how AB 32 is going to be seriously implemented without something along the lines of SB 375. If the state does not impose some regulatory scheme on local land use patterns, then use of the California Environmental Quality Act (CEQA) to deal with greenhouse gases will probably be accelerated. Attorney General Jerry Brown has already attracted a lot of publicity by suing local governments, claiming that AB 32 requires CEQA analysis of greenhouse gas emissions. Most recently, he forced a settlement agreement with San Bernardino County requiring a re-crafting of the general plan to account for greenhouse gas emissions (see In Brief).

We have been down this road before, though not with such blazing intensity. Back in the late '80s and early '90s, when the feds were pressuring California to hit federal clean air standards, the betting was that California's regional air pollution control agencies would get into the land use business. The air pollution agencies talked tough about land use for a while, and tinkered around the edges of the planning process, but they never took on land use directly. Instead they focused mostly on carpooling and other demand management mechanisms designed to limit the growth in vehicle miles traveled and, hence, tailpipe emissions. Some of these efforts remain in place today, while others have withered away.

But it's hard to imagine AB 32 withering away. Global warming has captured the public's attention very quickly as the most significant environmental issue in history. Both Schwarzenegger and Brown – whose celebrity reaches far beyond their current offices – have staked a lot of their publicity value on it. (Schwarzenegger is termed out in 2010, and with Los Angeles Mayor Antonio Villaraigosa's recent personal problems Brown has emerged as the early front-runner for the Democratic gubernatorial nomination at that time.)

Most of the legislative attention is focused on SB 375, a bill by Sen. Darrell Steinberg (D-Sacramento) that has barreled through the Legislature quickly despite significant opposition from both the locals and the builders. The bill has passed the Senate and has received friendly receptions in Assembly committees. The Steinberg bill is a wide-ranging proposal that affects local land use decisions in many ways.

The bill's basic approach is to use the leverage of regional transportation plans to encourage local land use changes. Each metropolitan planning organization (MPO) would be required to adopt a "preferred growth scenario" that will show how emissions reduction targets set by the Air Resources Board will be hit. Among other things, the MPOs would be required to designate "significant resource areas" that would have to be set aside. Steinberg suggests the scenario is a variation on the recently approved "blueprints" in many regions.

Future transportation funding will be tied to these preferred growth scenarios; if local governments' land use decisions conform to the scenario, they will be rewarded with transportation money. Local governments using the preferred growth scenario will also get some process breaks under the California Environmental Quality Act. Some projects will be exempt from CEQA analysis if they conform to a "sustainable communities checklist".

Both the League of California Cities and the builders lobby have reacted forcefully with a wide array of arguments. Among other things, they argue that SB 375 is putting the cart before the horse, in that overall AB 32 implementation is moving slowly through stakeholder processes while Steinberg's bill is being rushed through the Legislature.

For both the League and the California Building Industry Association (CBIA), the substantive crux of the argument is that SB 375 imposes a statewide land use regulation mechanism on local governments. "In essence," a missive from the League of Cities stated, "a regional authority would be making local land use designations." (Steinberg has called this characterization a "myth".) The League's party line is that AB 32 implementation should focus on "emissions reduction strategies" rather than "growth controls".

There are two different ways to look at SB 375 and the response to it from the locals and the builders. The first is that AB 32 implementation has given the planning hard-liners an excuse to drag out every failed growth management idea of the last 20 years and take another run with them. The second is that AB 32 represents a radical public policy change – a sharp reduction in greenhouse-gas emissions – and it requires a radical shift in how practically everything in California is done.

Actually, both are probably true.

The League's general argument is not without merit. The recent history of California planning is littered with examples of policies that purported to clean up the environment but were really focused on nothing more than limiting growth. Just about every local growth control initiative would be an example here, as would the whole regulatory system in the Tahoe basin, which has presumed – erroneously, apparently – that water clarity in Lake Tahoe can be maintained if development in the Tahoe basin is limited quantitatively.

Some of the more micro arguments against SB 375 are not without merit either. For example, the CBIA lambastes the bill's mandate to set aside "significant resource areas" as being in conflict with the state's own Regional Housing Needs Assessment process. (The bill does at least state that the region's housing needs must be accommodated in the preferred growth scenario.) It's true that simply setting aside land does not necessarily reduce emissions. Overall driving and emissions could increase or decrease, depending on the resulting development patterns.

Unfortunately for both the League and CBIA, however, Steinberg's bill cleverly uses the rhetoric and approach of "smart growth" to sidestep the question of whether overall development would actually be restricted. The goal of the bill is to implement a law calling for a reduction in air pollution emissions, but nowhere does SB 375 say this should be accomplished by actually reducing development – only by rearranging it.

Clearly, neither the League nor CBIA actually believes this – or else they have concluded that the "growth control" arguments are are most effective. The League is most concerned about retaining local control, because its constituents are local governments, while CBIA is most concerned about retaining the maximum amount of raw land in play for development, because most of its members are small homebuilders.

But both the League and CBIA might want to be careful about what they ask for. At present, the battle over SB 375 is being fought on very familiar ground for everybody involved in planning and development – the basic question of whether local land use decisions should be accountable to a regional or station entity. It's nothing more than the typical you-can't-make-us-do-what-we-don't-want-to-do argument.

But if the debate over SB 375 turns to emissions reduction, then both the League and CBIA will find themselves on a much larger and unfamiliar battleground in implementing the overall AB 32 targets. Rather than a you-can't-make-us-do-it debate, AB 32 is an I-win-you-lose debate. The emissions reductions have to come from somewhere, so the question is, Who bears the burden?

And there are other powerful players besides the builders, the local governments, and the enviros, and the stakes are extremely high. The AB 32 battle is big-league competition in Sacramento of a kind that the locals and the builders are not used to playing. It'll be driven in large part by savvy corporate players – including huge electricity conglomerates who know how to play the lobbying game in Sacramento better than anybody – who will have an interest in pushing as much emissions reduction as possible off on somebody else.

Every argument made by the local governments and the builders – all those arguments so carefully honed in intramural battles over the last 20 years – will be countered by equally compelling and well-funded arguments from other corporate interests who will claim that protecting them from AB 32 will be better for California in the long run. And they are smart enough to figure out that every ton of emissions reduction that can be laid off on land use is a ton of emissions reduction they don't have to worry about.

In other words, the planning and development lobby's biggest problem in implementing AB 32 isn't those nasty enviros. It's all those industrial polluters that just might have more juice in Sacramento. So the locals and the builders might want to think about cutting out the usual intramural warfare and decide how much of an emissions reduction they can really accept in the land use system – or else some more powerful lobbyists for the likes of PG&E, Hyundai and Royal Dutch Shell might decide for them.