Mitigating GHG Emissions
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This page introduces the topic of mitigating GHG emissions under the California Environmental Quality Act (CEQA), describes some GHG mitigation bank and exchange efforts to date, and highlights the benefits of regional collaboration to address GHG mitigation barriers.
Project-level land use and development decisions under CEQA play a crucial role in addressing local GHG emissions. The 2022 Scoping Plan explains how lead agencies can overcome barriers to GHG mitigation for projects subject to CEQA and avoid the approval of projects that have the potential for significant environmental impacts.
CARB recommends prioritizing GHG mitigation measures according to the following geographic hierarchy:
- On-site design measures
- Off-site GHG mitigation
- Funding or implementing local, off-site GHG reduction projects (within the communities or neighborhoods in the vicinity of the project
- Funding or implementing non-local, off-site GHG reduction projects
- Purchasing and retiring carbon offset credits
- That originate in the same air basin as the project
- That originate elsewhere in California
- That originate outside of California
Mitigation projects provide important co-benefits in the communities they serve while also addressing the climate crisis. These co-benefits include reductions in criteria air pollutants and toxic air contaminants. GHG mitigation can also increase communities’ social and economic resilience to climate impacts. Examples of local investments that have co-benefits include local urban forestry projects, local building retrofit programs, off-site zero-emission vehicle chargers, and public transit subsidies.
The Sustainable Transportation Equity Project, a grant program administered by CARB, funds a diverse range of community-led clean transportation projects intended to reduce GHG emissions while providing important local co-benefits. These types of projects may be candidates for local GHG mitigation investment as well.
Building on the CEQA GHG mitigation hierarchy, CARB is continuing to conduct research evaluating approaches for CEQA GHG mitigation strategies. CARB funded research on the state of the practice of local CEQA mitigation, which includes a summary of guidance from local air districts (where that guidance exists) and examples of carbon offsets in existing Environmental Impact Reports (EIRs). A separate CARB-funded report, released in 2023 by Steer Group, evaluated 30 different innovative funding and financing tools and strategies, including mitigation banks, to examine how they may generate sustainable, non-grant funding streams to cover capital and operating expenses for clean mobility projects.
Mitigation Banks and Exchanges
GHG mitigation banks and exchanges offer two slightly different approaches with the same goal: to enable project applicants to fund GHG-reducing projects in exchange for being credited with the resulting GHG reductions in their CEQA analyses. Most recent attempts in California to start mitigation banks or exchanges have focused on vehicle miles traveled (VMT), but lessons learned through these efforts can also be applied to GHG-focused banks and exchanges. The State is has begun evaluating opportunities to use mitigation bank and exchange programs as opportunities to reduce VMT and GHG. For example, Governor Newsom issued Executive Order (EO) N-2-24 in July 2024 to help lower costs and encourage the production of more and affordable infill development, and a mandate included in the EO is for the State to develop a framework for a Statewide Mitigation Bank to use infill housing as CEQA mitigation for transportation and housing projects.
Lead agencies and project sponsors often face confusion about CEQA’s requirements for off-site GHG mitigation, lack awareness of local GHG mitigation opportunities, and perceive administrative and project costs to be too high. Mitigation banks and exchanges featuring accurate quantification of GHG reduction from mitigation projects, and assurance that GHG reductions from these projects are additional to what would have happened without mitigation funding, may address some of these challenges by offering connection to appropriate local mitigation opportunities.
The following efforts and research may provide resources for using or developing mitigation banks and exchanges:
- CARB is contracting with the Center for Law, Energy, and the Environment at Berkeley Law (CLEE) to develop a white paper by August 2025 titled "Guidance and Best Practices for Development of Greenhouse Gas (GHG) Emissions and Vehicle Miles Traveled (VMT) Mitigation Banks or Exchanges."
- Caltrans-supported policy report by CLEE: “Implementing SB 743: Design Considerations for Vehicle Miles Traveled Mitigation Bank and Exchange Programs,” August 2022.
- Fehr and Peers published a white paper for Western Riverside Council of Governments entitled, “VMT Mitigation Through Fees, Banks, & Exchange: Understanding New Mitigation Approaches,” January 2020.
- The Southern California Association of Governments and the Los Angeles Department of Energy sponsored the Fehr & Peers paper on "VMT Mitigation Program Pilot Project,” June 2021.
Regional Collaboration
Regional collaboration offers many opportunities for improving access to local GHG mitigation and addressing barriers such as project and administrative costs. It can increase awareness of local mitigation opportunities, improve connections with existing programs that offer mitigation opportunities, and identify sites for off-site mitigation.
Metropolitan Planning Organizations and local air districts across California develop plans, administer programs, and create opportunities for effective regional collaboration. Some counties, like Sonoma County, have established regional authorities to coordinate climate action across jurisdictions.
State entities can facilitate regional collaboration. The Governor’s Office of Land Use and Climate Innovation convenes the Integrated Climate Adaptation and Resiliency Program (ICARP) which drives California’s response to climate impacts while prioritizing equitable approaches that integrate mitigation and adaption. This program enables the State to coordinate across local, regional, and state efforts to support cohesive strategies. The Strategic Growth Council manages the Regional Climate Collaboratives program which helps under-resourced communities build structures that facilitate the cross-sector partnerships and projects needed for equitable climate action. And the California Public Utilities Commission (CPUC) has authorized regional energy networks to administer and advance energy efficiency programs.
Additionally, the Alliance of Regional Climate Collaboratives for Climate Adaptation, a coalition of CivicWell, represents regional collaborative networks from across California that work to build regional resilience to climate impacts.
Public health practitioners can also play an important role in forging partnerships that increase overall capacity to mitigate and build resilience to climate change by integrating climate action into existing public health programs. The California Department of Public Health’s Climate Change and Health Equity branch offers technical assistance and resources to local health jurisdictions for this purpose.