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The California Environmental Quality Act's Other 'E': The Often Important Role of Economic Data in the Environmental Review Process

By Arthur Pugsley, Attorney, Chatten-Brown & Carstens

This article highlights the potentially critical role that economic data can play in the environmental review process under the California Environmental Quality Act. It discusses regulations on economic data that may conflict with the statutory scheme, case law, and the manner in which the author believes economic data can and should be used. The article also appears in the May 2011 issue of California Environmental Law Reporter (Matthew Bender).

"The California Environmental Quality Act (CEQA) [Pub. Res. Code § 21000 et seq.] aims to ensure 'maintenance of a quality environment for the people of this state now and in the future...' [Pub. Res. Code § 21000(a)]. CEQA concerns itself primarily with analysis and disclosure of environmental impacts," writes Arthur Pugsley. "However, economic data can prove essential to fully understand environmental impacts, especially when determining whether alternatives to (or mitigation for) a proposed project are feasible. This article highlights the potentially critical role of economic data in the CEQA process. It also discusses a provision of the CEQA Guidelines (Guidelines) [14 Cal. Code Reg. § 15000 et seq.] regarding economic data that may conflict with the overall statutory scheme, surveys the current state of case law regarding disclosure of economic data in environmental documents, and discusses the manner in which the author believes economic data can and should be used in the CEQA process."

"CEQA substantively protects the environment [Pub. Res. Code §§ 21002, 21002.1; Guidelines § 15021(a)(2)]. By forcing agencies to disclose information on environmental impacts, CEQA also offers procedural protections that foster governmental transparency and accountability [Citizens of Goleta Valley v. Bd. of Supervisors (1990) 52 Cal. 3d 553, 564 (Goleta II)]," explains the author. "The Environmental Impact Report (EIR), a detailed discussion of impacts from, alternatives to, and mitigation for a proposed agency action, is the 'heart of CEQA' and is the principal document through which an agency discharges its disclosure obligations [In Re Bay-Delta Programmatic EIR Coordinated Proceedings (2008) 43 Cal. 4th 1143, 1162]. The EIR 'is a document of accountability' [Laurel Heights Improvement Ass'n v. Regents of the University of California (1988) 47 Cal. 3d 376, 392 (Laurel Heights)]."

"CEQA is not about analysis of economic impacts per se [Pub. Res. Code § 21080(e)(2) ('evidence of social or economic impacts which do not contribute to, or are not caused by, physical impacts on the environment' are beyond the scope of CEQA); see also Pub. Res. Code § 21082.2(c); Guidelines § 15384]. The economic impacts of a project are only subject to CEQA if those impacts cause physical impacts," Pugsley notes. "For example, the economic impacts of developing a 'big box' retail district on the outskirts of a city are not subject to analysis in an EIR. However, reasonably foreseeable environmental impacts indirectly caused by the economic changes, such as physical decline of the city's urban center, are potentially subject to such analysis [Bakersfield Citizens for Local Control v. City of Bakersfield (2004) 124 Cal. App. 4th 1184, 1204]. Positive economic changes leading to potential physical impacts must also be analyzed [Guidelines § 15126.2(d)]. Potential effects on property values need not be analyzed under CEQA, no matter how potentially severe [Porterville Citizens for Responsible Hillside Development v. City of Porterville (2007) 157 Cal. App. 4th 885, 903]. However, CEQA does require agencies to 'consider qualitative factors as well as economic and technical factors and long-term benefits and costs' when evaluating projects [Pub. Res. Code § 21001(g)]. It also requires a general description of the project's 'technical, economic, and environmental' characteristics [Guidelines § 15124(c)]."

Strip Mall Shopping Center Retail District

Arthur Pugsley is an attorney at Chatten-Brown & Carstens, a Santa Monica, California, firm with a statewide practice representing petitioners/plaintiffs in environmental, natural resources, land use, and municipal law issues. The author thanks Susan Brandt-Hawley of the Brandt-Hawley Law Group in Glen Ellen, California, for her advice and editorial contributions to this article. subscribers can access the complete commentary, The California Environmental Quality Act's Other 'E': The Often Important Role of Economic Data in the Environmental Review Process. Additional fees may be incurred. (approx. 8 pages) subscribers may also access all of the Full Text Emerging Issues Commentaries Related to Environmental Law.

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