Permitting Reform Will Live Another Day

The parties have actually moved closer on these issues, which bodes well for eventual reform.

Dear readers,

Even though I had a lot of material in my rant about California Gov. Gavin Newsom last week, I did have one positive thing to say about him. He has signed a number of pieces of good legislation that should help to alleviate his state’s severe housing crisis. I’m pleased to see he’s done it again: Because of a bill he signed yesterday, SB 886, the state’s public colleges and universities will soon be able to build on-campus student, faculty and staff housing without going through an environmental impact statement process.

This legislation, sponsored by State Sen. Scott Wiener of San Francisco, was in response to an incident earlier this year: A judge had ordered a cap on UC Berkeley’s enrollment on the grounds that it had not adequately studied the environmental impact of enrolling more students, and the state’s appeals courts declined to intervene, which meant UC Berkeley was going to have to enroll thousands fewer students than it had planned. The ruling about the cap came in a lawsuit brought by neighbors upset about how UC Berkeley’s growth has strained the supply of local housing — but unfortunately, neighbors have also sued when UC Berkeley tries to house more of its own students. One particular project, on the “People’s Park” site owned by the university, has been the focus of both litigation under the California Environmental Quality Act and histrionic protests. Back in March, the legislature acted quickly to authorize Berkeley to enroll students despite the judge’s order about the enrollment cap. Now, to encourage the construction of new student housing, they’ve passed SB 886. Both of these legislative acts reflect decisions by California elected officials — largely Democrats — to narrow the scope of environmental review in the state. [This paragraph has been corrected to accurately describe the lawsuit and legislative history.]

Complaining about perverse results from CEQA is no longer particularly a Republican pastime. Wiener, a liberal Democrat by any measure, has offered critiques of the law that go well beyond student housing. As the LA Times described back in March:

Wiener said that CEQA’s flaws have become more apparent over time as California’s environmental challenges have changed. The law was born when environmentalism focused on stopping projects that had run roughshod over communities. But today, addressing issues such as climate change and clean air requires the construction of new clean energy sources and mass transit infrastructure, which CEQA makes more difficult.

“In many ways, tragically, CEQA is the law that swallowed California,” he said.

That’s the key observation: Environmental laws that are about burying projects in red tape are great if your environmentalism strategy is largely about stopping things from getting built. But if you want more green things to get built — solar farms, electric transmission lines, transit projects, new homes in walkable locations with moderate climates — then you need an environmental review regime that makes it easier to build. That is, you need an environmental review regime that is… not identical to, but quite a bit more similar to the one Republicans have wanted all along.

Wiener’s perspective is increasingly coming into fashion among Democrats, while also bringing Republicans along. SB 886 passed California’s senate by an overwhelming bipartisan vote of 37-1. The sole dissenting vote came from a Democrat: a former professor at UC Santa Cruz who now represents Santa Cruz, California’s college town with probably the most egregious planning and zoning practices in the whole state. But most state-level lawmakers in both parties seem more interested in reining in the NIMBY excesses of college towns than in protecting them.

All of this is to say: I remain optimistic that Joe Manchin’s permitting reform package, or something like it, will become law fairly soon, even though Mitch McConnell killed the plan to include it in the stop-gap government funding bill that Congress is passing before rushing out of town. I am optimistic because, as with the college housing issue in California, Republicans and Democrats now have an increasing degree of ideological alignment on an underlying policy question: How easy should it be to make investments in projects that ease the production and transmission of energy within the United States? While there are a lot of disagreements over details, both parties have now staked out a clear position that it should be significantly easier than current law allows — which will entail, in certain circumstances, reducing the ability of state and local governments and private litigants to interfere with the construction of infrastructure.

The ideological shift here is largely on the part of the Democrats, and I think it’s for two reasons. One is the political shakeout of this year’s ultimately successful effort to move climate legislation through the budget reconciliation process. The politically tenable parts of the green agenda are the ones about abundance: developing and deploying green technologies, and building out the underlying infrastructure for things like electric vehicles and zero-carbon electrical generation. The restrictive parts of the agenda — things like emission caps and taxes — are much less politically viable.

Because of that political reality, Democrats have been advancing ideas you might have more often associated with Republicans, like the provisions within the Inflation Reduction Act that are intended to keep the existing US fleet of nuclear generating stations operating longer than they otherwise might.

The other driver of this shift for Democrats has been the war in Ukraine and its downstream effects on energy and energy politics. By severely disrupting Russian supplies of fossil fuels to the west, the war created the sort of exogenous shock to fossil fuel supply that environmental advocates might theoretically want: Russia will keep more fossil fuels in the ground, so oil and gas consumption must decline, fossil fuel prices are soaring, and consumers face strong incentives to conserve or switch to renewable alternatives.

But what we’ve seen in practice is that this situation is politically toxic, and even European governments far more environmentalist than ours have not sought to use the war as “shock therapy” for a green shift. Instead, they have tried desperately to hold consumers harmless, by subsidizing energy, rapidly building new infrastructure to import replacement natural gas, and turning coal-fired power plants back on. The verdict from Europe is clear: A supply-side restriction strategy will not work, and we cannot build an anti-climate change strategy around pipeline blockades and dragging people out of their cars. Instead, we need a strategy of abundance.

In that context, why should Democrats invest in trying to block projects like Manchin’s beloved Mountain Valley Pipeline? We need more natural gas production and transmission, both to make Europe’s turn away from Russian gas possible, and in order to support wind and solar projects that rely on natural gas infrastructure for their effectiveness in reducing carbon emissions. As we add solar and wind to the grid, we need backup gas generation we can turn on when it’s cloudy (or not windy) out, or else we’ll have to rely on coal. So new gas pipelines are likely to prove useful even from a carbon emissions perspective.

US Senate Minority Leader Mitch McConnell (R-KY) (L) and US Senator Joe Manchin (D-WV) arrive to listen to Ukrainian First Lady Olena Zelenska deliver an address to members of the United States Congress at the US Capitol in Washington, DC, on July 20, 2022. (Photo by Jabin Botsford/POOL/AFP via Getty Images)

While the perspective I describe here is not uniformly held among Democrats, it was clearly the case that the party was overwhelmingly ready to swallow any objections and pass a reform package on the terms Manchin set if Republicans would cooperate. But they wouldn’t — on Tuesday, Mitch McConnell unloaded on Manchin’s proposal in a way I find mostly disingenuous. Republicans and Manchin do have some substantive disagreements about electrical transmission permitting and other issues that could be worked out in future proposals, but there was much for Republicans to like in Manchin’s proposal, and there’s good reason to believe McConnell’s overriding motivation here in torpedoing Manchin’s baby was political: to avoid handing Biden and Manchin another big bipartisan win so close to Election Day.

But soon, it will be after Election Day.

Permitting reform is now the sort of initiative that would be best handled in “Secret Congress.” Since Republicans and Democrats now have significant overlap in their substantive policy goals, they should find a lower-profile way to move legislation to their shared ends without anybody taking too much credit or blame for the thing. That could mean attaching it to the omnibus spending package that Congress will try to pass in the lame-duck session after the election. Or, as Manchin’s Republican colleague from West Virginia, Shelley Moore Capito, has suggested, it could be tacked on to the defense spending authorization bill during that period.

Republicans will surely want to say this isn’t Manchin’s reform package — Capito has her own competing proposal — and maybe the parties can agree to disagree on whose idea this all was. But the underlying incentives for getting a deal done here, sooner or later, are pretty good.

Very seriously,

Josh