California’s road to climate progress, Part 2

Introduction

In the last two decades, California’s lawmakers have gained a gilded reputation for their willingness to confront climate change—primarily, and as discussed in this series, through attempts to link transportation and land use. California’s legislature has passed a remarkable series of laws to promote shorter-distance trips, reduce population growth in disaster-prone areas, and broadly give residents more sustainable transportation choices. Those laws built an administrative infrastructure that is more detailed and extensive than any of its state peers.

Yet two decades of new laws and rules can’t just wipe away the preceding decades. California is at least a century into making single-family homes the status quo development choice. Developers simultaneously enjoy easier financing by forgoing costly infill infrastructure and are eager to dodge disincentives around building multi-family homes. Perhaps most critically, Californians began to enjoy that status quo.

Given this broader historical lens, it’s no surprise that on-the-ground results haven’t yet matched lawmakers’ ambitions. Transportation is still the highest-emitting sector in California, and it’s not particularly close. No matter which data you look at, vehicle miles traveled (VMT) are rising after reaching pandemic-era lows. And new houses in California are often still built in lower-density areas with the highest wildfire risk. Put simply, California is missing its own targets—but what’s not immediately clear is why.

To that end, we reviewed state law and literature by California researchers and interviewed more than 25 in-state experts from every level of government, academia, and the nonprofit and private sector. That research led us to chart how California’s laws work in concert—from the state to the regional and local level—to bring land development and transportation projects from concept to construction. In this piece, we explain who governs climate and transportation, and use a first-of-its-kind flowchart to pinpoint where problems emerge in the state’s system.

In total, we identify 18 specific issues across five categories that combine to stymie California’s climate ambitions. Many of these have long been documented by other researchers—from the relative lack of funding for climate-friendly projects (Problem 3.7 below) to the structural weaknesses of SB 375 (Problems 1.1, 4.1, and 4.2). By breaking down all the interwoven rules and regulations, it becomes easier to see where processes fail.

The path forward, then, is bound to require some combination of adding, removing, and amending laws, plus improved enforcement of laws already on the books. But before lawmakers and practitioners make major changes, they should understand how the systems currently governing transportation and land use are falling short.

Note: For clarity, we group these problems into five categories, which each include specific problems enumerated in bullet-point format. These categories are numbered, but should not be read as a prioritized list. Instead, each problem area and specific issue can have different on-the-ground impacts, but together, they prevent the state from achieving its goals

Problem 1: State laws and executive action have failed to adequately link transportation and land use in practice

California’s Global Warming Solutions Act of 2006 set a blunt mandate: Reduce GHG emissions. It was less prescriptive on tactics. Electric vehicles, low-emission fuels, and reducing VMT were all relevant solutions for the transportation sector, and subsequent laws such as SB 375 clarified the state’s strategy. Better land use, lawmakers thought, would be essential to reducing GHG emissions. Their task was to connect transportation projects to their desired development patterns. Years later, this report’s flowchart reveals that this connection is still tenuous, with housing and land use planning mostly siloed from transportation.

• Problem 1.1: Land use and transportation planning are relatively disconnected. The flowchart clarifies that land use and housing planning processes only significantly connect to transportation at one point: Sustainable Communities Strategies, which impose a GHG “budget” on each region’s long-range list of transportation projects. Beyond those plans, however, the two sectors do not meet. Therein lies a deep, structural flaw in the state’s policy regime. Without interconnected decisionmaking processes for transportation and land use, it’s difficult for local and regional officials to meet varied, and sometimes conflicting, requirements from HCD, Caltrans, and CARB.
• Problem 1.2: The state constitution first requires transportation harm before allowing more flexible use of transportation revenues. The provisions of Article XIX of California’s state constitution boil down to a “user-pays” policy, where transportation revenues ought to be spent on transportation. There is now an exception through new VMT mitigation laws and mitigation-banking mechanisms, which permit transportation revenues to fund infrastructure improvements and other activities that support infill development. But there’s a catch: Those funds can only be used if VMT will be induced somewhere. The net effect of that investment is unlikely to reduce VMT beyond the baseline.

Problem 2: Culture and governance in California state government prevent the state from making big changes

Caltrans and CalSTA are well positioned to drive down VMT in California—something their leaders have acknowledged. CAPTI emphasizes the need to shorten driving distances and affirms a public commitment to reduce GHG emissions from transportation. CalSTA recently established a Sustainable Communities Task Force focused on assessing SB 375 implementation and developing policy recommendations to better align transportation and land use. Despite there being at least some buy-in among the state’s leaders, structural barriers to reforming planning and investment at scale persist. Caltrans faces dual issues of culture and governance, which are most evident on the flowchart where the State and Regional Transportation Improvement Programs (STIP and RTIP) are developed.

• Problem 2.1: An engineering culture prioritizes roadway expansion at the expense of alternatives. Given its assets and history, it’s no wonder Caltrans is deeply invested in the engineering and building of roads and bridges. The department still rightfully boasts of its response to the 1989 Bay Area earthquake, when it reopened the San Francisco-Oakland Bay Bridge in just a month. Many staff have spent the bulk of their careers exclusively on roadway projects, with widenings and flyovers among the most ambitious. However, that culture also infers a natural resistance among staff to shift from managing metrics such as throughput and flow toward mitigating VMT. One expert described this organizational recalibration as a “religious reckoning” for many Caltrans engineers.³
• Problem 2.2: Caltrans districts support local partners who are focused on roadway expansion. Caltrans’ decentralized structure creates a gap between headquarters staff setting climate priorities and district engineers and planners consulting with local governments to help select and design projects. Because the main role of district offices is to identify transportation needs and support projects—not implement CAPTI nor SCSs—and Caltrans HQ doesn’t have final approval over district projects, state transportation policy is often disconnected from projects.
• Problem 2.3: Caltrans districts can easily uplift VMT-inducing projects initiated by partner localities. Some regional officials said Caltrans districts prevent them from achieving state-mandated goals, even those that prioritize transit, active transportation, and infill-supporting projects.⁴ In at least one instance, a Caltrans district office asked an MPO to program projects that would make their RTP exceed CARB-set GHG targets.⁵ This effort can also work in reverse. Localities that want roadway widenings can ask Caltrans district offices to represent their interests to Caltrans HQ.⁶ When this occurs, experts noted it can exacerbate cultural differences between staff at Caltrans district offices and their counterparts at Caltrans HQ.

Problem 3: Despite notable advancements, too many processes to select and fund transportation projects still aren’t designed to match the state’s climate goals

The state isn’t just a regulator when it comes to transportation; it’s also the single largest asset owner. State officials control all projects on the tens of thousands of miles of roadways it owns. That makes the CSIS, the climate-focused project prioritization system, an especially necessary change.

CAPTI has led to similar progress on transportation funding, including explicit overtures to the integration of transportation, housing, and climate. The CTC now targets a VMT-neutral suite of projects via its Solutions to Congested Corridors Program (SCCP). Some VMT-inducing projects still receive funding, but it’s still an important reform to a program writing a $250 million check every year.

Yet the CSIS can be overridden and undermined. At best, how the CTC incorporates climate into funding decisions is opaque; at worst, it can and does outright ignore the CSIS.⁷ Caltrans keeps constructing VMT-inducing projects that it started planning years ago. Legal limitations on how transportation revenue can be spent stymie even the most motivated state officials. These problems span nearly the entire flowchart.

• Problem 3.1: Projects with negative climate impacts can still be added to Caltrans’ project pipeline. Projects initiated to address a newly identified transportation need begin with a Project Initiation Document (PID). While the CSIS evaluates a project’s climate impacts when it is seeking funding, CAPTI guidance for PID approval is relatively weak. The guidance “does not establish a fixed threshold for advancing PID development,” opting instead for “proactive dialogue.” That’s especially important because Caltrans HQ doesn’t have the authority to approve a PID—nearly 40 years ago, that power was delegated to the directors of the 12 district offices.
• Problem 3.2: Culturally, it’s difficult to remove projects from Caltrans’ project pipeline. Some engineers spend the bulk of their careers on just a handful of projects. These projects may induce VMT such that no modification could mitigate it. But for the staff who would have to remove such a project from the pipeline, that action can feel incredibly personal. One expert said it may be seen as tantamount to rejecting the life work of a project’s engineers.⁸
• Problem 3.3: The CSIS is diminished by its own design. The first step to evaluate a project for funding using the CSIS is to assess “program fit”—basically, how competitive a project is for a particular funding source given its aim and guidelines. This first step supersedes all other CSIS analysis. So, if the CSIS determines a project has high CAPTI alignment but low “program fit,” it could be deprioritized in favor of a project that doesn’t align with CAPTI but has high “program fit.” Experts explained that while this may be an understandable reaction to the typical delivery of transportation dollars, its subjectivity and focus on political support make it a significant impediment to CAPTI implementation.⁹
• Problem 3.4: There is no way to enforce implementation of the Caltrans long-range plan that supports an 80% reduction in GHG emissions. SB 391 requires the California Transportation Plan (CTP), the state’s long-range vision for its transportation network, to support reductions in GHG emissions to 80% below 1990 levels by 2050. However, the CTP is not fiscally constrained, which contributes to the finding from in-state researchers that it lacks concrete implementation steps and fails to affect project selection by MPOs and the state itself. Of note, some experts said that the CTP’s internal modeling demonstrated the state can only hit those reduction targets through significantly more infill development and greater auto operating costs (like a VMT fee) than what regional SCS documents project.¹⁰
• Problem 3.5: The CTC does not use the CSIS. Most transportation officials anywhere in the country will tell you a project isn’t real until it’s funded. That makes the CTC, which doles out discretionary transportation funds and approves all other spending, a critical decisionmaker. But the CTC does not use the CSIS to evaluate applications for funding. In fact, one expert said that the CTC asked Caltrans not to publish CSIS scores because their funding decisions wouldn’t align.¹¹ To be clear, the CTC can fund VMT-inducing projects no matter who initiates them, whether it’s a local government or Caltrans itself.¹²
• Problem 3.6: The CTC is not required to and generally does not consider climate in its funding evaluation. Beyond the VMT-neutrality target for its SCCP, the CTC has done little to solicit and select projects that benefit the environment. More than one expert argued that the CTC has not fully leveraged its program guidance to attract projects that might reduce VMT. The CTC does use a cost-benefit calculator, but one expert learned that its results are easily manipulated, while another asserted that the CTC does not audit applicants’ claims about a project’s impact (or lack thereof) on GHG emissions.¹³
• Problem 3.7: Newer funding programs to address climate concerns are cash-strapped and overburdened. Caltrans divides funding into programmatic areas meant to support all manner of goals, from maintenance and safety to equity and climate. California’s newer climate-focused programs are being asked to do more with less, required to address 30 or more goals at once with a fraction of the funds available to older programs with more clear and narrow mandates. This problem is only getting worse, with well-documented budget cuts hammering the capacity of the state’s Active Transportation Program.
• Problem 3.8: The state’s operation and maintenance program for highways may conceal projects’ complete purposes. Every year, Caltrans improves and maintains its existing assets to the tune of $5 billion. Most dollars support simple repaving and road rehabilitation efforts, and all could be modeled as carbon neutral (when excluding the materials manufacturing and construction). Some experts argued that was the case—but a whistleblower recently alleged that Caltrans was illegally funding capacity expansions under the guise of maintenance.¹⁴ That issue may be more systemic: Research has found California’s transportation agencies often turn to expanded capacity as the first-order solution to most transportation needs.

Problem 4: California has little enforcement power built into its legal regime

As the state government works to achieve its own climate goals, California has legislated a system of planning requirements and GHG emissions reduction targets onto its regions and localities. That regime hasn’t lived up to legislators’ original dreams, but that’s not entirely the fault of regions and localities. California gave itself little ability to enforce those laws, including little in the way of consequences when goals aren’t met. That failure is amplified by the imperfections of the CEQA, which stakeholders must rely on to stop environmentally harmful projects that slip through state processes.

• Problem 4.1: The state cannot ensure that Sustainable Communities Strategies are implemented. When an MPO designs its SCS, the projects and programs it lists must show they achieve the CARB-required reduction in GHG emissions. CARB is responsible for ensuring that plans are compliant, but it can only evaluate an SCS as written. Regions, however, have wide latitude to delay or entirely forgo delivering projects in their SCS. That means that some regions eventually construct projects that induce VMT and don’t reflect the SCS as modeled by MPOs and evaluated by CARB.¹⁵¹⁶
• Problem 4.2: Localities don’t have to align their general plans with their region’s Sustainable Communities Strategy. The SCS is a regional land use plan, but land use is controlled by local governments. Localities—not MPO staff—make decisions about zoning, define floor-to-area ratios, mandate parking minimums, approve local building permits, and do more within their general plans. SB 375 is clear on the SCS’s relationship to general plans: “Nothing in this section shall require a city’s or county’s land use policies and regulations, including its general plan, to be consistent with the regional transportation plan or an alternative planning strategy.” This built-in gap means it’s typical for specific municipalities to fail to adopt growth and investment strategies that would support regional GHG reduction targets.
• Problem 4.3: CEQA was not intended to be an enforcement mechanism, but upstream flaws in the state’s system make it an imperfect last line of defense. CEQA is designed to require the disclosure of a project’s environmental impact to the public and stakeholders. That mandate was augmented when SB 743 added VMT analysis to CEQA review. And though it can be used to stop harmful projects, its power is limited. Lead agencies can issue a “statement of overriding consideration,” arguing that a project should be approved because it has another benefit so important as to supersede mitigating environmental harm.¹⁷ Oftentimes, the law is actually used to stop dense development that could reduce VMT, whether through a successful challenge or a chilling effect that even failed lawsuits can create. What’s more, using CEQA as an enforcement mechanism actually exposes the failures of the state’s transportation planning system.¹⁸ Just look at the flowchart: With so many steps before a transportation project undergoes CEQA review, the fact that VMT-inducing projects even get to environmental permitting is an indictment of the state’s processes. Put simply: CEQA will not always prevent VMT-inducing projects or spur VMT-reducing ones—nor should it have to.

Problem 5: Even when state officials are intent on key outcomes, established interest groups and political economy threaten progress

Infrastructure and housing construction is big business in California. Over 120,000 people work in residential construction and nearly 100,000 in heavy and civil engineering construction. In 2024, gross domestic product from all construction in California was over $156 billion. The last two decades have built a regime meant to shift the kinds of construction the state will advantage. Naturally, that can upset industries that prefer the status quo. It can also feel counterintuitive to a public who thinks that “one more lane” could relieve local traffic. When business and constituent interests overlap like this, they can influence legislative priorities.

• Problem 5.1: Established interests continue to lobby state lawmakers to maintain certain status quos. Roadway expansions are a major component of Caltrans’ historic and contemporary investment practices. That status quo advantages certain groups such as road builders, construction workers, property developers who primarily build single-family homes, and certain trade unions—all of whom, reasonably, will articulate their position to the legislature. Their arguments run the gamut, from infrastructure projects creating jobs to the location of new housing being less important than building new housing in general. Whatever any of these groups may say in support of the status quo, a coalition that politically powerful is difficult for lawmakers to oppose.

Conclusion

Considering the sheer amount of laws California has passed related to transportation emissions, land use planning, and related built environment policies, it’s no surprise that the state’s procedural flowchart would be both massive and complex. After assembling all those policies onto one flowchart and confirming the issues they create in discussions with experts, the multiple challenges that undermine the state’s goals come into full focus.

There are 18 clear problem areas that overlap to thwart state lawmakers’ grand ambitions. When land use and transportation are disconnected (Problems 1.1 and 1.2) and regional land use plans are written by those who can’t implement them (Problem 4.2), it becomes that much easier to build in environmentally risky, lower-density locations. A professional culture oriented around roadway engineering (Problems 2.2 and 2.3) and established interest groups (Problem 5.1) can make it hard to quit planning highway expansions. There are still plenty of procedural exemptions (Problems 3.1, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, and 4.1) that allow emissions-generating projects to move forward. Even the state’s own permitting laws can allow risky development and transportation projects to move forward or stop ones that will do just the opposite (Problem 4.3).

In short, the flowchart exposes a procedural nightmare.

Where California goes from here is uncertain, but state leaders must internalize these issues. This flowchart and analysis expose the difficulty of penetrating and transforming state practices, even with the best-intentioned leaders, and underscore the need for a mix of structural changes and targeted reforms.

In the next article in this series, we will explain the local perspective on the same state laws. Our hope is that understanding this flowchart from a top-down and bottom-up perspective clarifies entry points for such reforms and begins to build support for the most urgent changes.