New Economic Study Shows CEQA Protects Environment without Stunting Economic Growth
August 15, 2016
BAE Urban Economics report includes quantitative analysis of CEQA’s impacts on litigation, development costs and affordable housing
Berkeley, Calif. – Economic analysis firm BAE Urban Economics released a new report today that shows the California Environmental Quality Act (CEQA) supports economically and environmental sustainable development in California. The report was commissioned by the Rose Foundation in response to a number of flawed analyses released in recent years that inaccurately blame CEQA for economic challenges in the state.
“This report uses quantitative analysis to clarify that anti-CEQA rhetoric really has no basis in fact,” said Janet Smith-Heimer, President of BAE Urban Economics. “After extensive analysis, we found that CEQA does not have an actual dampening effect on California’s economy.”
The report includes a number of significant findings, including:
There is no quantitative evidence that CEQA has a retarding effect on the state’s economic prosperity.
Legislative changes to CEQA aimed at streamlining the CEQA process to encourage infill development are working. In San Francisco, only 14 environmental impact reports were prepared in the last three years. In that time, 100 projects proceeded with CEQA exemptions or expedited review.
Despite rapid population growth and development, the number of CEQA lawsuits statewide has remained constant over the past 14 years. Between 2013 and 2015, legal challenges were filed in 0.7 percent of projects subject to CEQA review.
Less than one percent of projects subject to CEQA review face litigation.
Direct costs for complete environmental reviews under CEQA typically range from 0.025% to 0.5% of total development costs.
California is the 11th most densely populated state in the nation. Its urban areas compare favorably to cities around the country with regard to the rate of infill vs. greenfield development.
The state’s largest cities show ongoing improvement in walkability. California is home to 12 of the nation’s 50 most walkable cities.
CEQA does not hamper the development of affordable housing in urban areas. Although the need to provide more affordable housing in California is undisputed, when compared to other states, California produces the second highest number of affordable housing units per 100,000 residents in the nation.
CEQA was signed into law in 1970 by then-Governor Ronald Reagan. CEQA requires public agencies to identify environmental impacts associated with development and to reduce or eliminate such impacts whenever feasible. The law provides provisions to ensure transparency and invites community involvement in development decisions.“CEQA is often the only legal protection afforded to communities of color and low-income communities disproportionately burdened by environmental harms,” noted Gladys Limón, Staff Attorney with Communities for a Better Environment. “It identifies environmental health and safety impacts that would otherwise be passed off to residents and taxpayers generally. CEQA ensures smart development that respects the right of a decent home and suitable living environment for every Californian.”
The report’s analysis includes:
A literature review of recent studies on CEQA’s impacts.
A detailed review of legislation, legal findings and regulatory changes intended to streamline the CEQA process, and the degree to which those efforts have been successful.
Five case studies that illustrate how the CEQA process works (a transit center in Anaheim, an affordable senior housing project in Richmond, a Specific Plan for the Millbrae BART station, a solar installation in the Mojave Desert, and the contested SCIG railyard development at the Port of Los Angeles).
An analysis of the direct costs for the environmental review portion of a project, placed into context of other planning and constructions costs.
A review of California’s ranking compared to other states with regard to infill development, population density, walkability (a key metric of sustainable development) and economic prosperity.
“Public enforcement of CEQA plays a crucial function in protecting public health and the environment in California’s most vulnerable communities,” said Sean Hecht, Co-Executive Director, Emmett Institute on Climate Change and the Environment, UCLA School of Law. “At the same time, this report shows that litigation under CEQA affects only a small fraction of projects in the state.”To read the full report, CLICK HERE.
Testimony Implies Oil Spills Are Good For Wildlife and the Economy
By J Nicholson, August 11, 2016
As reported in thinkprogress.org, the Washington State Energy Facility Site Evaluation Council (EFSEC) has been holding hearings on the matter of a proposed oil-by-rail terminal that could be built in Vancouver, Washington. If approved, it would be the largest oil-by-rail facility in the country, handling some 360,000 barrels of crude oil, shipped by train, every single day. It would also greatly increase the number of oil trains that pass through Washington, adding a total of 155 trains, per week, to the state’s railroads.
Environmentalist activists worry that an increase in oil trains could lead to an rise in oil train derailments, like the kind seen in early June when a Union Pacific train carrying Bakken crude derailed outside the Oregon town of Mosier, spilling 42,000 gallons of oil near the Columbia River.
But according to witnesses that testified before the EFSEC on behalf of Vancouver Energy – the joint venture between Tesoro Corp. and Savage Cos. and the entity behind the Tesoro-Savage terminal proposal – oil spills might not actually be that bad for the environment.
“The Draft Environmental Impact Statement identifies many economic impacts arising from an accident associated with Project operations, but fails to recognize economic activity that would be generated by spill response,” Todd Schatzki, vice president of Analysis Group — a consulting group that released an economic report on the terminal commissioned by Tesoro Savage — wrote in pre-filed testimony. “When a spill occurs, new economic activity occurs to clean-up contaminated areas, remediate affected properties, and supply equipment for cleanup activities. Anecdotal evidence from recent spills suggests that such activity can be potentially large.”
Schatzki’s pre-filed testimony also includes references to both the Santa Barbara and BP oil spills’ role as job creating events. He notes that the Santa Barbara oil spill created some 700 temporary jobs to help with cleanup, while the BP spill created short term jobs for 25,000 workers. Schatzki does not mention that BP has paid individuals and businesses more than $10 billion to make up for economic losses caused by the spill. Nor does he mention that California’s Economic Forecast Director predicted that the 2015 Santa Barbara oil spill would cost the county 155 jobs and $74 million in economic activity.
For the Columbia River region, the impacts of an oil spill could be equally economically devastating — a report from the Washington Attorney General’s office found that an oil spill could cost more than $170 million in environmental damages.
Schatzki also argued that an oil spill would not necessarily have a large impact on commercial and recreational fisheries. The Columbia River, which cuts between Oregon and Washington and borders much of the oil-train route, is one of the most important fisheries for both states. In 2015, the total economic value of Columbia River salmon was $15.5 million, according to the Oregon Department of Fish and Wildlife.
Those fisheries, however, would not necessarily be impacted by an oil spill, Schatzki argued, because fishermen would simply avoid the areas where the spill had taken place, moving their operations elsewhere. During cross examination, however, Schatizki said that he did not look at other fishermen’s responses to oil spills when crafting this analysis, nor did he specifically look at the length of fishing seasons or the geographic extent of various fisheries within the Columbia River.
In testimony given on July 7th, another Tesoro-Savage-associated witness, Gregory Challenger, argued that oil spills could actually have benefits for fish and wildlife. Challenger, who worked with Vancouver Energy to analyze potential impacts and responses in the event of a worst-case discharge at the facility and along the rail line, told the committee that when oil spills cause the closure of certain fisheries or hunting seasons, it’s the animals that benefit.
“An oil spill is not a good thing. A fishery closure is a good thing. If you don’t kill half a million fish and they all swim upstream and spawn, that’s more fish than were estimated affected as adults,” Challenger said during his testimony. “The responsible party is not going to get credit for that, by the way.”
To prove his point, Challenger cited National Marine Fisheries Service data that showed that 2011, the year after the BP oil spill, had been a record year for seafood catch in the Gulf of Mexico. And while that’s true, Shiva Polefka, policy analyst for the Center for American Progress’s Ocean Policy program, cautioned against trying to make sweeping statements for how all ecosystems would respond to an oil spill. Following the Exxon Valdez spill in 1989, researchers discovered that crude oil had soaked into the rocky beaches near the spill site, emitting toxic compounds for years that had long-term adverse impacts on salmon and herring populations.
“Does cutting fishing effort benefit fish? Absolutely,” Polefka said. “Enough to mitigate the horrible effects of large oil spills in every case? Absolutely not.”
During his testimony, Challenger also brought up the Athos 1 oil spill, which sent 264,000 gallons of crude oil into the Delaware River in 2004. The spill, Challenger said, took place during duck hunting season, and forced an early closure for recreational hunting in the area.
“There were an estimate of 3,000 birds affected by the oil, and 13,000 birds not shot by hunters not shot by hunters, because of the closed season,” he said. “We don’t get any credit for that, but it’s hard to deny that it’s good for birds to not be shot.”
According to U.S. National Oceanic Atmospheric Administration (NOAA), seabirds are especially vulnerable to oil spills, because of the way that oil affects their usually-waterproof feathers — when those feathers become matted with oil, a seabird loses its ability to regulate its temperature. Often, it will try to preen itself to remove the oil, which only forces the oil into its internal organs, causing problems like diarrhea, kidney and liver damage, and anemia. Oil can also enter into a seabird’s lungs, leading to respiratory problems.
Opponents of the terminal were quick to dismiss Schatzki and Challenger’s testimony as “hollow,” especially in the face of the recent derailment and oil spill in Mosier.
“We see Tesoro moving towards these more desperate arguments to try to downplay the risk of the project,” Dan Serres, conservation director with Columbia Riverkeeper, told ThinkProgress. “It’s hard to imagine that EFSEC will buy the argument that oil spills pose anything other than a grave risk to the Columbia River estuary.”
Following the EFSEC hearings, the committee will submit a recommendation to Washington Governor Jay Inslee to approve, conditionally approve, or deny the project.
Study finds the warmer it gets, the more world economy hurts
By SETH BORENSTEIN, Oct. 21, 2015 3:55 PM EDT
WASHINGTON (AP) — With each upward degree, global warming will singe the economies of three-quarters of the world’s nations and widen the north-south gap between rich and poor countries, according to a new economic and science study.
Compared to what it would be without more global warming, the average global income will shrivel 23 percent at the end of the century if heat-trapping carbon dioxide pollution continues to grow at its current trajectory, according to a study published Wednesday in the scientific journal Nature.
Some countries, like Russia, Mongolia and Canada, would see large economic benefits from global warming, the study projects. Most of Europe would do slightly better, the United States and China slightly worse. Essentially all of Africa, Asia, South America and the Middle East would be hurt dramatically, the economists found.
“What climate change is doing is basically devaluing all the real estate south of the United States and making the whole planet less productive,” said study co-author Solomon Hsiang, an economist and public policy professor at the University of California Berkeley. “Climate change is essentially a massive transfer of value from the hot parts of the world to the cooler parts of the world.”
“This is like taking from the poor and giving to the rich,” Hsiang said.
Lead author Marshall Burke of Stanford and Hsiang examined 50 years of economic data in 160 countries and even county-by-county data in the United States and found what Burke called “the goldilocks zone in global temperature at which humans are good at producing stuff” — an annual temperature of around 13 degrees Celsius or 55.4 degrees Fahrenheit, give or take a degree.
For countries colder than that economic sweet spot, every degree of warming heats up the economy and benefits. For the United States and other countries already at or above that temperature, every degree slows productivity, Burke and Hsiang said.
The 20th-century global average annual temperature is 57 degrees, or 13.9 degrees Celsius, according to the National Oceanic and Atmospheric Administration. Last year — the hottest on record — was 58.24 degrees and this year is almost certain to break that record, according to NOAA. Burke and Hsiang use different population-weighted temperature figures than NOAA calculates.
But the U.S. economy is humming despite the heat. When asked how that can be so, Burke said there were many factors important for growth beyond just temperature. He said one year’s temperature and economic growth in one nation isn’t telling. Instead, he and Hsiang looked at more than 6,000 “country-years” to get a bigger picture.
Burke compared the effect of global warming on economies to a head wind on a cross-country airplane flight. The effects at any given moment are small and seemingly unnoticeable but they add up and slow you down.
While it is fairly obvious that unusual high temperatures hurt agriculture, past studies show hot days even reduce car production at U.S. factories, Burke said.
“The U.S. is really close to the global optimum,” Burke said, adding that as it warms, the U.S. will fall off that peak. The authors calculate a warmer U.S. in 2100 will have a gross domestic product per person that’s 36 percent lower than it would be if warming stopped about now.
But because the U.S. is now at that ultimate peak, there’s greater uncertainty in the study’s calculations than in places like India, Pakistan, Vietnam, Nigeria and Venezuela where it’s already hot and there’s more certainty about dramatic economic harm, Hsiang said.
The authors’ main figures are based on the premise that carbon dioxide emissions will continue to rise at the current trajectory. But countries across the world are pledging to control if not cut carbon pollution as international leaders prepare for a summit on climate change in Paris later this year. If the current pledges are kept, the warming cost in 2100 will drop from 23 percent to 15 percent, Burke said.
Gary Yohe, an environmental economist at Wesleyan University in Connecticut, praised the study as significant and thorough, saying Burke and Hsiang “use the most modern socio-economic scenarios.” But Richard Tol, an economist at the University of Sussex in England, dismissed the study as unworthy to be published in an economics journal, saying “the hypothesized relationship is without foundation.”
Other experts found good and bad points, with MIT’s John Reilly saying it will spark quite a debate among economists.