On November 24, 2014, the California Court of Appeal held that the San Diego Association of Governments' ("SANDAG") environmental impact report ("EIR") for its 2050 Regional Transportation Plan/Sustainable Communities Strategy failed to comply with the California Environmental Quality Act ("CEQA") by not adequately considering the climate change impacts of the plan. Cleveland National Forest Foundation v. San Diego Association of Governments, Nos. 37-2011-00101593, 37-2011-00101660 (Cal. Ct. App. Nov. 24, 2014).

The court affirmed the superior court's finding that the EIR violated CEQA because it failed to analyze the inconsistency between the state's policy goals reflected in Executive Order S-3-05 and the plan's greenhouse gas emissions impact. Executive Order S-3-05 sets greenhouse gas emissions reduction targets in California through 2050. California's legislature enacted equivalent emissions targets through 2020 into law with the intention that the progress and reductions extend beyond 2020 and directed the California Air Resource Board ("CARB") to develop regional greenhouse gas emissions targets for automobiles and light trucks for 2020 and 2035. The San Diego plan acknowledged an increase in greenhouse gas emissions but SANDAG argued that it did not need to compare the plan's greenhouse gas impacts with the state climate policy as articulated in Executive Order S-3-05 because (i) there is no statute or regulation translating the Executive Order into reduction targets specific to the region through 2050 and (ii) the plan complied with the CEQA Guidelines located in title 14 of the California Code of Regulations.

The California Court of Appeal disagreed holding that, even though SANDAG may not know the specific reduction targets it needs to meet, SANDAG could have compared its plan with the state policy of continual greenhouse gas emissions reductions. The court of appeal also held that the use of the CEQA Guidelines did not automatically mean compliance with CEQA when failure to consider other evidence frustrates the state's climate policy and renders the EIR misleading.

Despite the fact that the court's decision that the plan violated CEQA rendered the petitioners' other challenges to the EIR partially moot, the court addressed the other challenges in turn and found that the EIR also violated CEQA for the following reasons: (i) it failed to adequately address mitigation measures for the post-2020 greenhouse gas emissions; (ii) it failed to address any project alternative that would significantly reduce total vehicle miles traveled and instead focused on congestion relief; (iii) it failed to adequately present a baseline of existing air-quality conditions and analyze the health effects of the air-quality impacts and; (iv) it failed to analyze and mitigate the plan's impact on agricultural land.

Judge Patricia D. Benke filed a dissenting opinion arguing that the superior court's decision should be reversed because SANDAG adequately analyzed the EIR's greenhouse gas impacts in relation to the regional reduction targets promulgated by CARB.

On January 6, 2015, SANDAG filed a petition for review with the California Supreme Court arguing primarily that consistency with Executive Order S-03-05 is not an appropriate standard by which to evaluate the significance of the transportation plan's greenhouse gas impacts. An Executive Order is not binding state policy with which local governments must comply, and it cannot repudiate Guidelines § 15064.4, which was specifically adopted at the direction of the legislature to guide analysis of greenhouse gas impacts.

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