Freakonomics on CEQA's environmental counterproductivity and NIMBYism

November 25, 2013 | By JONATHAN WOOD

If you’re interested in CEQA reform, give a listen to this week’s Freakonomics podcast featuring Prof. Ed Glaeser. He discusses a number of environmental policies where messaging has outpaced the green credentials of policy, leading not only to waste, but sometimes actually worsening the environment. What example did he give as his case where the supporters are least likely to be motivated by the benevolence befitting their rhetoric and where the results are most likely to be environmentally counterproductive?


His reasoning identifies a very important problem with the way that California conducts environmental review. CEQA encourages NIMBYism by giving great weight to the local environmental effects of development while ignoring the broader environmental effects of denying development. CEQA treats the alternative to a project, say the construction of an apartment building, as no development. But this is preposterous. Whether the project is approved has no impact on the number of households or the need for housing. The units have to be built, the only question is where. Therefore, the only real environmental effects of approving the project are the differences between the impacts if the project is located where proposed or built somewhere else. The environmental effects intrinsic to the project are a given because the need for housing is what it is.

But CEQA gives NIMBYs a powerful tool to tax or prevent development based on these impacts. This pushes development to other sites where political opposition may be lower, even if the environmental effects are greater. He cites opposition to development in San Francisco as an example of this counterproductivity. San Francisco is already dense and built out. Assuming there are any negative environmental effects to increasing this density, they are likely to be much smaller than if the development occurred outside of the city in an undeveloped area. Yet CEQA activism is high in cities like San Francisco—producing precisely this result.

Prof. Glaeser concludes by noting that we should be most skeptical of environmental arguments where the source has perverse incentives to overstate the environmental case in order to achieve other, private ends. That’s certainly a problem for CEQA, which unions and other groups abuse to extort benefits having nothing to do with the environment from property owners.