Mcle Self-study Article: It's Not Easy Being Green: California's Journey Towards a More Sustainably-built Environment

• Publication year: 2021
• Author: Jennifer Tung and Christi Fu

MCLE Self-Study Article: It's Not Easy Being Green: California's Journey Towards a More Sustainably-Built Environment

Check the end of this article for information on how to access one MCLE self-study ethics credit.

Jennifer Tung and Christi Fu

Jennifer Tung is an attorney with Hunt Ortmann Palffy Nieves Darling & Mah, Inc., where she focuses her practice on complex business and construction matters. She has represented clients ranging from small businesses to publicly-traded companies, and from public agencies to non-profit organizations. Her work includes resolving disputes related to breaches of contract, scope of work disagreements, and construction and design defect claims. She is also an emerging thought leader in the area of green construction and frequently writes and speaks about new laws that impact sustainable building.

Christi Fu is the Operations Manager of Arcadis's Contract Solutions Practice in the Western United States responsible for construction claims, expert witness, and dispute resolution service offerings. Christi has extensive experience on numerous project types including roadways and highways, bridges, light rail, wastewater treatment facilities, airports, ports, and buildings. She is a registered Professional Engineer in California, a Certified Construction Manager, a LEED Accredited Professional and Envision Sustainability Professional and has been an active member of USGBC for the past ten years. Christi earned her BS and MS in Civil Engineering from the University of California, Berkeley.

I. INTRODUCTION

California has long been a leader—whether in business, technology, or culture—and it is no different when it comes to "green building" and sustainable construction. In 2006, California passed the Global Warming Solutions Act—the first statewide cap on greenhouse gas emissions in the country.¹ Four years later, the Golden State adopted CALGreen—a first-in-the-nation state-mandated green building code.²

What exactly does all this mean? It means that owners, developers, and contractors—in both public and private works—have seen dramatic shifts in both what they are legally required to do, but also in what consumers have simply come to expect in just the last decade or so.

While a discussion of all aspects of "green building" is beyond the scope of this piece, this article will discuss some of the key moments in California's push towards carbon neutrality and 100-percent renewable energy, the resulting changes to California's construction sector (with a focus on public works-related legislation), and the litigation that (perhaps, inevitably) arose.

II. OVERARCHING STATEWIDE GOALS AND THEIR PROGRESSION

As carbon dioxide emissions continue to rise globally, California has numerous aggressive goals to decrease pollution and increase air quality as the global leader in climate policy. Overall, these policies commit to reduce eighty percent in greenhouse gas emissions (GHG) relative to a 1990 baseline by 2050. There have been many strategies that were developed to track and reduce GHG across all sections. The California Air Resources Board (CARB) is responsible for ensuring that California meets these goals. As the world's fifth largest economy and the twelfth largest emitter of carbon worldwide, the world is looking to California to respond to climate change.

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A. Assembly Bill 32 (Health and Safety Code §§ 38500 Through 38599)

The state's greenhouse gas reduction program, Assembly Bill (AB) 32, was passed in 2006. It authorized CARB to monitor and regulate sources emitting greenhouse gases. AB 32 was also called the "Global Warming Solutions Act," confirming California's commitment to transition to a sustainable, clean energy economy. Its target was to reduce emissions to the 1990 level by 2020. This level was approved to be 431 MMTCO2e (431 million metric tonnes of carbon dioxide equivalent). This is an aggregated statewide limit and is not sector or facility specific. AB 32 also created the cap-and-trade program, which expired in 2020 but was extended to 2030 by AB 398.

According to the U.S. Energy Information Administration, from 1990 to 2015, California's GHG emissions from the electric power sector were reduced by 24%, commercial and residential sector emissions by about 14%, and industrial emissions by 13%.³ Transportation-related emissions declined from 2007 through 2013, but rose in both 2014 and 2015. Overall, California's total GHG emissions were 2% higher than 1990 levels as of 2015 as shown in Figure 1 below.

This figure shows a 24 percent reduction in California's GHG emissions from the electric power sector, 14 percent reduction in commercial and residential sector emissions, and 13 percent reduction in industrial emissions. The chart also shows that transportation-related emissions declined from 2007 through 2013, and rose in 2014 and 2015. Finally, it shows that California's total GHG emissions were 2 percent higher than 1990 levels as of 2015.
Image description added by Fastcase.

Figure 1 Emission Reduction Status and Targets Chart⁴

However, progress has been made since 2015. As of October 2020, GHG emission levels remain below the 1990 baseline. CARB reported that 2018 emissions were six million MMTCO2e below the 2020 target of 425.3 MMTCO2e.⁵ CARB also reported that GHG emissions in California have dropped from a 2001 peak of 14.0 tons per person to 10.7 tons per person in 2018, a twenty-four percent decrease. CARB published a report titled "California Greenhouse Gas Emissions for 2000 to 2018" which showed the state crossing the 2020 limit around the end of 2015, thereby meeting the AB 32 goal.⁶

B. Senate Bill 32 (Health & Safety Code § 38566)

Ten years after the passage of AB 32, California raised the emissions goal to forty percent below 1990 levels by 2030 with the passage of Senate Bill 32 in 2016. This equates to a limit of 258.6 MMTCO2e. Although California met the AB 32 goal, CARB published documents indicating that the 2030 goal will be challenging to reach, noting that it will require a much steeper rate of greenhouse gas reductions.

According to the Energy Futures Initiative's (EFI) white paper "Optionality, Flexibility & Innovation: Pathways For Deep Decarbonization in California," there are no "silver bullet" technology solutions to meet this requirement.⁷ There will need to be significant improvements and cost reductions in key technologies, including carbon capture, utilization, and storage at industrial facilities and natural gas power plants. EFI notes that several economic sectors have not made measurable emissions improvements in recent years including the industry, transportation, and agriculture sectors.

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Currently, there are four programs that focus on addressing the impacts of climate change:

1. The cap-and-trade program;
2. The Low Carbon Fuel Standard (LCFS);
3. The zero emission vehicle (ZEV) mandate; and
4. The Renewables Portfolio Standard (RPS).

These programs cover transportation fuels, industrial emissions, vehicle emissions, and emissions from electricity generation. These programs have more-stringent emissions reduction targets starting in 2021.

The cap-and-trade program has received the most publicity of the four programs. University of California Berkeley's Center for Law, Energy & Environment's fact sheet on cap-and-trade explains that the program sets a declining cap on statewide emissions in accordance with emission reduction targets and generates a number of emission credits equal to the cap.⁸ The program funds preservation and restoration of tens of thousands of acres of open space. It also has helped plant thousands of new trees, funded 30,000 energy efficiency improvements in homes, expanded affordable housing, boosted public transit, and helped more than 100,000 Californians purchase zero-emission vehicles.

On July 25, 2017, Governor Jerry Brown, former Governor Arnold Schwarzenegger, State Senate President pro tempore Kevin De Leon, and political, environmental, and business leaders from across the State came together to celebrate the extension of the cap-and-trade program.⁹ They met on Treasure Island to affirm the State's bipartisan commitment to reducing pollution and promoting economic growth.

"Thanks to bipartisan support California was able to extend its historic cap-and-trade program which protects our environment and preserves our nation-leading economic growth," said former Governor Schwarzenegger. "Governor Brown and legislative leaders from both parties came together to ensure that California continues to march toward a clean, prosperous future. I hope politicians around the country can learn from the example set in Sacramento last week. Republicans and Democrats were able to come together to pass legislation that helps clean up our environment for our children while at the same time supporting a booming economy." Governor Schwarzenegger added: "America did not drop out of the Paris agreement. America is fully in the Paris agreement. The states and the cities in America, the private sector, the academic sector, the scientists—everyone is still in the Paris agreement. There's only one man that dropped out."¹⁰

Governor Brown closed the program, noting that "California is leading the world in dealing with the principal existential threat that humanity [is] facing ... we are a nation-state in a globalizing world and we're having an impact and you're here witnessing one of the key milestones in turning around this carbonized world into a decarbonized, sustainable future."¹¹

C. Executive Order B-55-18

Executive Order B-55-18 (2018) established a statewide goal of carbon neutrality by 2045.¹² The Executive Order defines "carbon neutrality" as achieving net-zero carbon dioxide emissions, striking a balance between the CO2 emitted into the atmosphere and the CO2 removed from the atmosphere. CARB states this goal will be extremely challenging to meet: "By any measure, in any scenario, achieving carbon neutrality by 2045 will require a wholesale...