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Chatten-Brown, Carstens & Minteer Hermosa Beach Office Josh Chatten-Brown Phone: (310) 798-2400 Chatten-Brown, Carstens & Minteer LLP Partner 2200 Pacific Coast Highway, Suite 318 E-mail Address: San Diego Office Phone: (858) 999-0070 Hermosa Beach, CA 90254 [email protected] Phone: (619) 940-4522 www.cbcearthlaw.com Phone: (619) 940-4522 September 18, 2020 By e-mail ([email protected], [email protected]) Gregory Mattson Mark Slovick Planning & Development Services 5510 Overland Avenue, Suite 310 San Diego, California 92123 Re: Sierra Club’s Comments on “Additional Information Regarding Carbon Offset Protocols for Greenhouse Gas Emission Reduction” for Otay Ranch Resort Village (Village 13) Dear Gregory Mattson and Mark Slovick: The law firm of Chatten-Brown, Carstens, & Minteer represents the Sierra Club on matters relating to the Otay Ranch Resort Village (Village 13). At the Sierra Club’s request, we have reviewed the County’s additional information on Village 13’s carbon offset protocols, including its Mitigation Measures M-GCC-7 and M-GCC-8. While the Sierra Club recognizes that the County of San Diego (“County”) has revised Mitigation Measures M-GCC-7 and M-GCC-8 in response to the Fourth District Court of Appeal’s recent decision in Golden Door Properties, LLC, Sierra Club v. County of San Diego (2020) 50 Cal.App.5th 467 (“Sierra Club”), the revised carbon offset mitigation measures still violate the California Environmental Quality Act (“CEQA”). The County’s proposed use of Mitigation Measures M-GCC-7 and M-GCC-8 appear to be an attempt to evade the substantive mandate of the Court of Appeal’s decision and proceed with “business as usual” urban sprawl development through its unfettered use of carbon credits from voluntary carbon offset registries. As made painfully and abundantly clear by the recent, ongoing wildfires in San Diego County and throughout California, climate change poses a real and present threat. The County committed to reducing its in-County greenhouse gas (“GHG”) emissions and the Village 13 GHG mitigation measures prevent the County from achieving this goal. I. M-GCC-7 & M-GCC-8 Violate CEQA. Despite the clear guidance from the Court of Appeal, the County still fails to make the necessary changes to its GHG mitigation measures to comply with CEQA. While Gregory Mattson and Mark Slovick September 18, 2020 Page 2 Sierra Club recognizes and appreciates that the County has removed its allowance of international carbon offsets, much of the County’s revisions consist of importing language from the Fourth District Court of Appeal’s decision and describing the “requirements” of the three main voluntary registries it had previously allowed under M- GHG-1, without concurrent substantive changes that address the Court of Appeal’s identified legal violations. A. M-GCC-7 & M-GCC-8’s Performance Standards Are Unenforceable Because of Their Reliance on Voluntary Registries. Under the state’s Cap-and-Trade program, GHG reductions “must be real, additional, quantifiable, permanent, verifiable, and enforceable.” (Cal. Code Regs., tit. 17, § 95802, subd. (a).) While there are significant concerns as to whether Compliance Offsets under the Cap-and-Trade program are even achieving these requirements, as described in more detail below, the Village 13 GHG mitigation measures certainly do not ensure that the allowed offsets meet these same requirements. 1. The Village 13 Mitigation Measures Do Not Ensure Permanent GHG Reductions. GHG mitigation measures that allow for offsets must ensure permanent reductions. The County’s revised mitigation measures offer no substantive changes to ensure the permanency of offsets allowed under the Village 13 mitigation measures. Rather, the County merely adds to its definition of “permanent” to include that “registries maintain a number of un-retired carbon offsets in a separate ‘buffer pool’ that can be used in the event that a previously implemented reduction is reversed.” (Village 13 Project’s Global Response R1: Carbon Offsets (Global Response R1).) The County fails to actually revise its mitigation measure here to ensure permanency because it continues to allow offsets outside of the County and state through voluntary registries. The Court of Appeal expressed concerns over voluntary registries’ ability to ensure permanency, especially in comparison to the strict requirements of the California Air Resources Board (“CARB”). (Golden Door Properties, LLC, supra, 50 Cal. App. 5th at 522 [“To ensure permanency, CARB requires there be ‘no opportunity for a reversal of the avoided emissions.’ This is implemented, for example, in CARB's forestry protocol, which requires sequestering carbon ‘for at least 100 years’”].) The County should only permit use of offsets with a CARB-approved “Compliance Offset Protocol” to avoid this concern.1 The County previously pointed to M-GHG-1’s requirement that offsets be 1 In stark contrast to M-GCC-7 & M-GCC-8, the County’s Climate Action Plan (“CAP”) included a measure T-4.1 that required its direct investment project to comply with “established protocols that have been approved by ... CARB, the California Air Pollution Gregory Mattson and Mark Slovick September 18, 2020 Page 3 purchased from a CARB-approved registry as a “sufficient safeguard” to ensure permanency, yet the Court distinguished CARB-approved registries from CARB- approved protocols. (Sierra Club, supra, 50 Cal.App.5th at 513). Moreover, the presence and need for an entire “buffer pool” under M-GCC-7 & M-GCC-8 raises uncertainties about the efficacy of the voluntary registries in the first place. (Otay Ranch Resort FEIR Response to Comments, p. 3 [“Recognizing that unanticipated events are possible, and in order to ensure permanency, registries maintain a number of un-retired carbon offsets in a separate ‘buffer pool’ that can be used in the event that a previously implemented reduction is reversed. Continuing with the forestry example, offsets from a buffer pool could be used to replace reductions lost due to fire”].) CARB’s offset regulations, authorized by Health and Safety Code (“HSC”) section 38562, subd. (d), provide for compliance grade offsets that are far more credible and limited than those allowed by M-GCC-7 and M-GCC-8 and their allowable voluntary registries. CARB regulations require that offsets also be “permanent,” which means that the GHG reductions are either irreversible or endure for at least 100 years. (17 CCR § 95802, subd. (a)). CARB has the enforcement authority to hold a particular party liable and to take appropriate action, including penalties, if any of the regulations for CARB offset credits are violated, thus ensuring actual permanency. (17 CCR § 95802, subd. (a); 17 CCR §§ 96013, 96014.) In contrast, the Village 13 mitigation measures rely on offsets from voluntary registries and fail to ensure permanency. The presence of a “buffer pool” does not ensure actual permanency of the offsets. The County has not identified how it will monitor offset usage and ensure that a registry’s buffer pool can provide sufficient permanent offsets. This presents issues with the County’s ability to enforce adequate protocols on a voluntary registry, should that registry fail to ensure permanency. While the County’s addition of the “buffer pool” language was intended to strengthen the permanency requirement of voluntary carbon credits, the County has also failed to demonstrate that the developer will be required to use this buffer pool after completion of the project. The use of a “buffer pool” is not mandatory. For example, under the American Carbon Registry: The project proponent can choose one of three mechanisms to recover offsets in the event the reductions are reversed. … The first and primary mechanism is the ACR Buffer Pool. … Under the third option, the project proponent may propose an insurance product as a risk mitigation mechanism. For example, a project proponent could provide bonds, letters of credit, or other financial assurances to ACR in an amount sufficient to ensure ACR can retire offsets should the project suffer reversal of Control Officers Association (CAPCOA), or the San Diego County Air Pollution Control District.” (Sierra Club, supra, 50 Cal. App. 5th at 492.) Gregory Mattson and Mark Slovick September 18, 2020 Page 4 reductions. The form of the insurance product and its amount are subject to ACR approval. (Attachment GR.R1.1, p. 311.) There is no such similar provision under the other two authorized carbon registries. (Ibid.) To avoid this concern, the County should enforce further on-site mitigation measures and facilitate in-County GHG mitigation. Further, M-GCC-8 only requires that the “total carbon offsets value as identified in the certified EIR for the Project is consistent with the commitment to achieve and maintain carbon neutrality [] for the 30-year life of the Project.” Yet, operation-related emissions do not cease after 30 years. The County incorrectly adds in its Global Response R1: “The Fourth District Court of Appeal’s decision in Sierra Club v. County of San Diego (Case No. D075478) also affirmed the County’s use of a 30-year period in the Supplemental EIR’s carbon offsets mitigation measure for its Climate Action Plan, explaining that the 30-year period was disclosed and substantiated by cited air district guidance.” Yet, the Court only dismissed arguments that the County’s CAP and SEIR did not disclose M-GHG-1’s “30-Year Shelf Life.” (Sierra Club, p. 71). The Court itself did not state that the 30-year-period was substantiated. Rather, it only cited to evidence of disclosure in the SEIR. Since the GHG emissions from the Village 13 project will occur for the entire project duration, and that duration is far greater than 30 years, the Project’s GHG mitigation measures fail to ensure the permanent reduction of project- related operational emissions. 2. The Village 13 Mitigation Measures Are Not Verifiable.
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