Don’t San Francisco–ize Clean Energy

Don’t San Francisco–ize Clean Energy

One great paradox of our time is that to limit humanity’s harms to the planet, we must decarbonize the economy; but to decarbonize the economy, we must build tons of new stuff: wind farms, solar fields, geothermal wells, and above all electricity-transmission lines. Last month, a broad coalition of congressional Democrats released their vision for how to do this. Their bill, the Clean Electricity and Transmission Acceleration Act, includes many good ideas, such as clarifying the federal government’s authority to approve interstate transmission lines, requiring public utilities to account for the “social cost of carbon” in setting rates, and addressing a shortage of electrical transformers.

But then the bill undermines itself by setting up a succession of legal obstacles. This will allow NIMBY neighbors, fossil-fuel front groups, and other opponents of vital infrastructure to drag out the permitting process for years by concocting one procedural objection after another.

[Annie Lowrey: NIMBYism reaches its apotheosis]

Many environmentalists, civic groups, and sympathetic lawmakers fail to recognize that demanding too much community input and legal review has a downside. But the consequences are evident in San Francisco, where, as The New York Times recently noted, getting permission to build new housing takes more than 1,100 days on average, and the city government has failed for years to navigate its own process for installing a single public toilet. In addressing the climate crisis, the U.S. does not have the luxury of time.

The Democrats’ bill takes the worst conventions of land-use politics in big liberal cities and applies them to clean energy (and any other projects that, under federal law, require environmental review). In San Francisco and elsewhere, projects to develop much-needed housing fail not just because neighboring homeowners are empowered to nitpick tiny details, but also because local officials indulge countless interest groups seeking commitments to hire union workers and local residents, developer-paid “community benefits” such as parks and transit improvements, below-market-rate housing units, cash donations or no-cost leases for local nonprofits, and so much more.

Similarly, the congressional Democrats’ permitting bill authorizes federal agencies to require a community-benefit agreement as the price of any permit—not just for clean-energy projects but for any project that requires an environmental-impact study under existing federal law. Under the new legislation, the first factor an agency is supposed to consider in evaluating proposed community-benefit agreements is the depth of the project sponsor’s pockets. This reads like an invitation for shakedowns.

Community-benefit agreements foster a crony capitalism of the left. Rather than giving sweetheart deals to favored firms (or in addition to doing so), city councils withhold development approvals from project sponsors unless the sponsor funnels money or in-kind benefits to the right nonprofits and hires workers from politically connected unions. Meanwhile, the city bolsters the very same groups by awarding them contracts for affordable housing and other projects. Groups angling to stall projects or extract benefits for themselves also gain leverage through legal threats, because environmental-review and public-participation rules enacted by left-leaning cities and states empower objectors to sue over minor procedural matters. Because project financing is hard to obtain while litigation is pending, the mere threat of filing a lawsuit can be enough to extract money and other concessions from a developer.

The Democrats’ permitting-reform bill would fill the coffers of groups that tie up projects. It calls for $3 billion in federal spending for the sake of “increasing the capacity” of nonprofits and local governments to participate in the environmental-review process. And it requires the Federal Energy Regulatory Commission to pay the expenses of parties that want to intervene in regulatory proceedings but cannot afford to. In effect, the bill would subsidize objections to the projects that it means to accelerate.

Lawyers for community groups will tell you, “We don’t kill projects; we just make them better.” But they don’t see the projects that were never proposed in the first place because of the costs and uncertainties created by the procedural gantlet.

State-level Democratic leaders are finally beginning to take this problem to heart, now that a housing crisis in prosperous blue metro areas has created a sense of urgency. Last year, Washington State exempted housing developments in urban growth areas from the state’s environmental-review law. In California, the legislature passed a landmark bill that provides a right to sue city councils that abuse environmental review to stall housing proposals on environmentally benign urban sites. (Full disclosure: I was a pro bono legal adviser to this bill’s supporters.) Another new California law will eliminate environmental reviews for most housing projects that meet specified labor, affordability, and environmental standards.

[Jerusalem Demsas: The culture war tearing American environmentalism apart]

Yet the Clean Electricity and Transmission Acceleration Act goes in the other direction. Rather than define a class of good-for-the-environment projects and streamline their approval, penalize weak lawsuits against them, or limit courts’ authority to hold them up, the federal bill writes expansive environmental-review requirements into statute—and then layers on additional procedural requirements and grounds for litigation.

No doubt this was done with the best of intentions: to hear from the public, to mitigate projects’ adverse effects, and above all to avoid repeating the mistakes of the past, when disadvantaged communities were bulldozed for interstate highways or to cure “blight” via so-called urban renewal. Responding to this history, the Democrats’ bill adds a host of new requirements for additional studies (backed by rights to sue) if a project may affect a disadvantaged community. The impulse is all to the good, but the law needs to distinguish between projects that present serious, demonstrable health risks and projects that may offend someone’s aesthetic sensibilities or trigger unwarranted fears but pose no real risk of injury.

Again and again, California demonstrates the danger of accepting nebulous objections as the basis for legal action. An environmental-review law that requires study of noise pollution became the tool for blocking not just loud factories but ordinary student housing. The same law gave San Francisco’s city council a pretext to stall a proposal for 500 apartments to be built on a downtown parking lot; objectors claimed that the parking lot was near historical buildings and speculated that the project might cause gentrification.

In addition to learning from their co-partisans in California about the perils of too much legal process, the congressional Democrats backing the consensus permitting-reform bill ought to consider how a future Republican administration could exploit the legislation. Former President Donald Trump, the likely Republican nominee, has a plan to empty out the civil service and repopulate it with MAGA flunkies. His minions could use the authority conferred by the Democrats’ bill to stall virtually any clean-energy or clean-transmission project by, for example, demanding mitigation of economic and social effects on fossil-fuel producers. Community-benefit agreements could become money sluices for local Republican operatives.

[Annie Lowrey: Four years among the NIMBYs]

For congressional Democrats who want to get clean-energy transmission and other infrastructure built, the political path forward is murky. Environmental groups in the Democratic coalition are genuinely committed to protecting and even expanding activists’ ability to block projects that they deem objectionable. Many in the party have a deep suspicion of anything that smacks of laissez-faire deregulation. The California legislature has a Democratic supermajority, yet recent reforms to streamline housing approvals would have failed but for Republican votes. At the federal level, the Senate filibuster and a much stronger Republican Party mean that Democrats can’t afford to lose the support of any of their own members.

The question raised by the Clean Electricity and Transmission Acceleration Act is whether the Democrats and the environmental groups within their coalition can find a way to hang together without giving more power to clean-energy opponents. To do its part in addressing the climate crisis, the U.S. should be passing laws that defang local obstructionists rather than sharpen their teeth.