Business Update with Mark Lacter

The Environment

KPCC's business analyst Mark Lacter talks about environmental issues affecting California.

Steve Julian: On Tuesdays we talk about the latest business stories with Mark Lacter. Mark, these are interesting days for California’s environmental laws.

Mark Lacter: Yeah, just a week or two ago the legislature was considering a special exemption for Anschutz Entertainment Group – it was going to limit environmental challenges to AEG’s plans for a downtown stadium. But a funny thing happened by the time the legislature adjourned for the session: Without any time for public input, it had approved the AEG exemption all right – and then, in a separate piece of legislation, established a mechanism for additional exemptions covering high-priced developments all over the state. In the process, something rather extraordinary happened: Lawmakers had decided to water down the California Environmental Quality Act (usually known as CEQA) – it’s been around for more than 30 years, and it’s almost as sacrosanct as Proposition 13.


Julian: Explain what the CEQA law does.

Lacter: Basically, it requires developers to prepare an environmental impact report that lays out any potential downsides to a project (stuff like traffic and pollution) and then lays out what can be done to mitigate those problems. Then the plans can be challenged in court. Well, the new law allows the governor to speed up this environmental review process for very large projects, such as the downtown stadium. That means bypassing the local courts and going straight to the Court of Appeal, which would have only a limited time to resolve the case – and also making any litigation much harder and a lot more expensive.

Julian: Was it time?

Lacter: Well, there’s no question that the CEQA laws, just like Prop 13, could use an overhaul. Court challenges are sometimes used as delay tactics, and projects can be put on hold, not just for years, but for decades. Maybe the best example is when the city of South Pasadena challenged the plans to extend the 710 freeway for nearly 20 years. When California is described as business unfriendly, CEQA is one of the first things brought up. But the legislature didn’t really overhaul the CEQA law – it just tweaked the law for a limited number of powerful players. Every other business is stuck with the same old lengthy process. And more to the point, it gives a single person – the governor – considerable sway in determining how these projects will go. By the way, the two bills have not yet been signed into law by Gov. Brown.

Julian: Another environmental story - what’s the local impact of President Obama delaying tougher ozone standards?

Lacter: Actually, it’s pretty limited because the state is nowhere close to meeting the current standard. Now this can get confusing, but the federal standard for ozone is 75 parts per million -- that’s averaged over eight hours (they use eight hours because it’s considered a better indicator of the impacts over a longer period of time). What President Obama did was delay implementation of what would have been a stricter federal standard – making the limit only 60 to 70 parts per million. But here’s the thing: The stricter standard is really irrelevant locally because Southern California is routinely over that 75 parts limit – last year it was higher for 109 days.

Julian: So one size doesn’t necessarily fit all…

Lacter: Exactly. Now the EPA has just approved a cleanup plan for Southern California that would cut the area’s ozone levels to healthy levels by mandating cleaner cars and trucks, but that’s not going to happen until 2024. So the president’s decision really doesn’t have any impact on the state or local situation. It is worth noting that there have been big improvements in air quality in California; ozone levels have been reduced by more than 50 percent since 1976, much of that is the result of cars that have become a lot cleaner and a lot more fuel efficient over the years.

Julian: And the transition to cleaner technologies…?

Lacter: Right, stuff like solar power and electric cars – is no doubt making a difference as well. If industries and consumers are encouraged to switch over to these technologies (and based on the price of gasoline these days, there doesn’t seem much choice), these standards are going to be a lot easier to meet. And the good news (did I just say good news?) is that the numbers are pointing in the right direction.

Julian: Mark Lacter is a contributing writer for Los Angeles Magazine and writes the business blog at LA Observed.com.


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