Abstract
One of the government’s primary roles is to step in when a market failure exists and correct it. Externalities create market failure, and economists consider pollution the best real world example of a market failure. California’s Assembly Bill (AB) 32 and Senate Bill (SB) 375 are both examples of public policy attempting to correct a market failure known as global warming or climate change, from greenhouse gas (GHG) emissions, a form of air pollution. AB 32 and SB 375 seek to reduce greenhouse gas (GHG) emissions. Creating new laws in California is difficult, and understanding what GHG reduction strategies are agreeable across party lines is valuable. The success of efforts to pass new legislation to reduce GHGs and slow global warming depends greatly on finding consensus among stakeholders. While existing legislation may have some impact on reducing GHG emissions, new strategies are imperative to meet current objectives of curbing climate change. This thesis analyzed existing research from the UC Berkeley Center for a Sustainable California (CSC) that made recommendations regarding implementation tools to help achieve the goals of AB 32 and SB 375. I used a Criteria Alternative Matrix (CAM) to evaluate the 10 recommendations from Make it Work (CSC, 2009) and determine the best three options by measuring efficiency, equity, and political acceptability. I then took my results to building industry professionals in one-on-one interviews. I asked them what GHG emission reduction strategies they favor using a standardized set of interview questions. My intention was to find consensus among the builders on a specific strategy that will help reduce GHG, and make a policy recommendation to lawmakers. I found consensus among developers for two strategies that can help reduce GHG emissions. Both strategies involve reducing risk and lowering project costs associated with infill development. The first strategy is to make reforms to the California Environmental Quality Act (CEQA) Guidelines that change the legal grounds for litigation, while mandating a more efficient timeline for resolving legal action regarding CEQA lawsuits. The second strategy is to link projects that qualify for CEQA Streamlining for Infill Development under the proposed CEQA Guidelines Section 15183.3 to a source of government funding known as Infrastructure Financing Districts (IFD) which use tax increment financing to pay for infrastructure on infill sites. IFDs are currently legal; however, reform is necessary to use them effectively. CEQA and IFD reform is agreeable to developers, and can make infill development feasible and profitable, helping correct a market failure. These two strategies can reduce GHG emissions by increasing population density and promoting an environment where people drive less. I recommend lawmakers pursue CEQA and IFD reform to encourage infill development to reduce GHG emissions.