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Climate Change Blog

CEQ Releases New Draft Guidance on Consideration of Climate Change Under NEPA

On December 18, 2014, the Council on Environmental Quality (CEQ) released a new Draft Guidance on Considering Climate Change in NEPA Reviews ( Draft Guidance), which will be available for 60 days of public comment. The Draft Guidance replaces an earlier 2010 draft guidance document that CEQ published for public comment and never finalized, and comes just months after CEQ denied a petition to amend the NEPA regulations to include more explicit language regarding the consideration of climate change. According to the press release accompanying the Draft Guidance, it has been issued in response to a recommendation in the final report of the President’s Task Force on Climate Preparedness and Resilience.

The National Environmental Policy Act (NEPA) requires federal agencies to consider environmental impacts caused by major federal actions, including granting certain permits or approvals. While NEPA applies to all federal agencies, the CEQ is tasked with administering the statute and writing NEPA regulations and guidance documents. 

The stated purpose of the Draft Guidance is to improve the consistency and efficiency of climate change evaluations in NEPA analyses prepared by federal agencies. The Draft Guidance begins by acknowledging the challenges of assessing climate change impacts, given the complex interrelationships between the causes of climate change and its effects. CEQ also stated that the goal of the Draft Guidance is to ensure that environmental assessment (EA) and environmental impact statement (EIS) documents prepared under NEPA include a useful consideration of climate change by focusing on projects that involve GHG emissions or have a life span that is long enough that they may be affected by the physical impacts of climate change. Recognizing the complexity of evaluating actual climate change impacts in each NEPA analysis, the Draft Guidance instead recommends that agencies use projected GHG emissions impacts from the project as a proxy for climate change impacts. This approach, however, assumes away a critical legal issue under NEPA. NEPA does not require consideration of emissions – it requires consideration of the environmental impacts proximately caused by federal actions. The CEQ’s proxy approach effectively assumes that emissions resulting from the federal action at issue proximately cause climate change impacts.

Importantly, while the Draft Guidance leaves federal agencies with significant discretion in how to structure their consideration of climate impacts under NEPA, it plainly demands more than the now-common practice of stating that most projects contribute emissions that on their own are inconsequential to global climate change. Indeed, the CEQ somewhat pointedly rejected the adequacy of “boilerplate text to avoid meaningful analysis.” The Draft Guidance expressly notes “the statement that emissions from a government action or approval represent only a small fraction of global emissions is more a statement about the nature of the climate change challenge, and is not an appropriate basis for deciding whether to consider climate impacts under NEPA.” This is a puzzling statement. The reason for this common approach to considering global climate change impacts under NEPA is the fact that climate change is a cumulative impact that is not attributable to any individual project or action. So the new CEQ guidance is contrary to this long line of precedent, and seems contrary to the requirements of NEPA. However the guidance goes on to say that an agency may determine that the consideration of climate change impacts from a project would not be useful as long as that decision is documented. Any such conclusions may be difficult to justify with what the Draft Guidance considers as “the nature of the climate change challenge itself,” which is “the fact that diverse individual sources of emissions each make relatively small additions to global atmospheric GHG concentrations that collectively have huge impact.”

When should GHG emissions from a proposed project be quantified?

The Draft Guidance acknowledges that federal agencies have discretion to determine when a qualitative assessment of GHGs will be sufficient under NEPA and when a quantitative assessment of emissions should be prepared. To assist agencies in making the decision of when to quantify GHG emissions, the Draft Guidance provides a “reference point” of annual emissions greater than or equal to 25,000 metric tons of CO2e. The Draft Guidance suggests that projects with emissions above this reference point likely have emissions that are significant enough to warrant quantification. But again, that conclusion assumes this level of emissions proximately causes impacts that are significant enough to warrant consideration under NEPA, and the Guidance provides no support for this position. Further the Draft Guidance suggests that for projects with emissions below the reference point, a quantitative analysis of GHG emissions is not warranted unless it is easily accomplished.

The Draft Guidance also notes that in the quantification of emissions, it is important to not only consider the impacts of direct GHG emissions from the project, but also to consider the potential impacts of carbon sequestration changes that may result from land-use management decisions made by the agency. The Draft Guidance notes that when considering the role of carbon storage, it is important to evaluate both short- and long-term impacts on GHG emissions. For example, the Draft Guidance notes that the use of fire for landscape management can result in a near-term increase in GHG emissions but may result in landscapes that have higher carbon storage capacity in the long term. The Draft Guidance specifically notes that forthcoming agency-specific guidance on landscape management and carbon considerations will be important to this analysis. But again, the Guidance seems to misplace NEPA’s requirement to consider environmental impacts, and instead purports to require an evaluation of emissions regardless of any impact.

As with other portions of the Draft Guidance, CEQ leaves the agencies with significant discretion in determining when GHG emissions should be quantified, noting that the “reference point” is for the purposes of disclosure only and should not be used in place of the agencies’ own assessment of the significance of emissions from a project. By noting that the “type of analysis—quantitative or qualitative—… should be informed by the tools and information available to conduct the analysis,” the CEQ is clearly letting agencies know that they must remain abreast of advancements in analyses to consider the impacts of climate change and be prepared to use them to “ensure” that the level of effort going in to the analysis “is reasonably proportionate to the importance of climate change.” 

Use of cost-benefit analysis in the evaluation of climate impacts

The Draft Guidance specifically addresses the use of cost-benefit analysis to address climate change under NEPA. Consistent with CEQ’s NEPA regulations, the Draft Guidance notes that cost-benefit analysis may be appropriate to compare project alternatives in some, but not all, cases and that the use of cost-benefit analysis is not appropriate where there are important qualitative considerations that need to be considered in the comparison of alternatives. In the event that an agency elects to use cost-benefit analysis to compare alternatives, the Draft Guidance notes that the social cost of carbon (SCC) “offers a harmonized, interagency metric that can provide decisionmakers and the public with some context for meaningful NEPA review.” 

The Draft Guidance emphasizes that cost-benefit analyses using the SCC should disclose that SCC estimates vary over time (the SCC is higher the further into the future one looks because of the long lifetimes of GHG emissions in the atmosphere). However, the Draft Guidance does not address the fact that the SCC is based upon global models of the economic impacts of climate change and, therefore, may not provide an appropriate comparison point in an alternatives’ evaluation that considers only local benefits.

Use of GHG emissions analysis in consideration of alternatives

The Draft Guidance does not suggest that the comparison of GHG emissions is required to compare alternatives under NEPA. Rather, it states that if a comparison of alternatives on the basis of their GHG emissions would be useful, that the agency should conduct such a comparison and provide the information to the public and decision makers. But again, the Guidance completely ignores the distinction between NEPA’s requirement to consider the environmental impacts of alternatives, not simply the quantitative difference in emissions.

Incorporating climate change mitigation measures

The Draft Guidance directs agencies to consider climate change mitigation measures that will reduce GHG emissions as part of their NEPA analysis. The Draft Guidance suggests a number of potential mitigation measures for consideration including energy efficiency, renewable energy, carbon capture, landscape sequestration, sustainable land management, and capture and use of beneficial fugitive emissions, such as methane. Further, the Draft Guidance directs agencies to consider the permanence and enforceability of any mitigation measures they may incorporate in the NEPA process. NEPA, however, does not mandate any particular mitigation measures be adopted, so the legal requirements for doing so would have to fall under some other statute.

Considering climate change adaptation under NEPA

Finally, the Draft Guidance addresses the consideration of climate change adaptation under NEPA. The Draft Guidance states that both current and reasonably foreseeable future environmental conditions should be used to create the project baseline and that the timeframe of the analysis should mirror the expected lifetime of the project. When considering the physical impacts of climate change, the Draft Guidance suggests that two types of analyses are potentially important. First, a NEPA analysis should consider whether the physical impacts of climate change will cause environmental impacts of a project to become worse over time. For example, if a proposed project will consume significant amounts of water in a region where climate change is projected to result in increased water scarcity during the lifetime of the project, the Draft Guidance suggests that this impact should be considered in the NEPA analysis. Second, the Draft Guidance states that when a project is to be located in an area that is particularly susceptible to physical impacts of climate change, these impacts should be evaluated to determine whether they will impact the ability of the preferred alternative to meet the project’s goals. For example, in coastal areas where sea level rise and increased storm severity are probable impacts, the Draft Guidance states that a hypothetical transportation project should be evaluated to avoid environmental and potential economic consequences of rebuilding as a result of these physical impacts. The Guidance does not consider the issue of at what point future effects of climate change may become reasonably foreseeable so as to require consideration under NEPA. 

NEPA litigation over the adequacy of an agency’s consideration of climate change impacts is becoming increasingly common. While the Draft Guidance provides some additional direction on how CEQ believes projects resulting in GHG emissions should now be considered in EISs or EAs, it leaves the agencies with significant discretion in when and how to incorporate particular elements of a climate change analysis. As such, it leaves substantial room for interpretation and is likely to do little to stem the tide of NEPA climate change litigation.

Furthermore, many observers may find that the draft guidance does not do enough to provide certainty in the NEPA process and contains several legal flaws, particularly as it relates to the consideration of climate change impacts beyond the cumulative impacts analysis under NEPA. Among these potential flaws are the following: 

  • In Public Citizen the Supreme Court held that NEPA only requires the consideration of effects that are proximately caused by the Agency’s action. In the context of climate change, this would suggest that CEQ’s focus on GHG emissions rather than the climate change impacts of a project—particularly when accompanied by an acknowledgement that the climate change impacts of individual projects are small—may be beyond that required by NEPA.
  • NEPA case law establishes that agencies are only required to consider significant environmental impacts that are relevant to an Agency’s decision. To the extent that CEQ’s “reference point” is interpreted to require quantification of GHG emissions above an arbitrary reference point even when such emissions will not on their own proximately cause impacts that are relevant to the agencies decision, the 2014 Draft Guidance is inconsistent with the established case law.
  • In Methow Valleythe Supreme Court held that NEPA itself does not require mitigation but rather provides for the consideration of mitigation measures. To the extent that climate change impacts from a project as a whole cannot be measured, mitigation of these impacts is not meaningful in the NEPA context. Further, as NEPA itself does not provide a tool for Agencies to require mitigation measures, Agencies would need another source of legal authority to require mitigation of GHG emissions.

Posted by Casey Hopkins, Mike Wigmore, and Margaret Peloso at 12/22/2014 6::31 PM 

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George C. Hopkins

George C. Hopkins Partner

Margaret E. Peloso

Margaret E. Peloso Partner

Michael B. Wigmore

Michael B. Wigmore Partner