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Revised Draft Guidance Regarding Greenhouse Gas Emissions and Climate Change in NEPA Reviews

May 7, 2015
By Deana M. Bennett

Introduction:

On December 18, 2014, the Council on Environmental Quality (“CEQ”) issued revised draft guidance (“Revised Draft Guidance”)¹ for analyzing greenhouse gas (“GHG”) emissions and climate change impacts in National Environmental Policy Act (“NEPA”) analyses.  CEQ’s Revised Draft Guidance replaces the CEQ’s 2010 Draft Guidance.  The Revised Draft Guidance’s stated purpose is to improve the “efficiency and consistency of reviews of proposed Federal actions for agencies, decisionmakers, project proponents, and the interested public.” Revised Draft Guidance at 1. The Revised Draft Guidance acknowledges that it “is not a rule or regulation, and the recommendations it contains may not apply to a particular situation based upon the individual facts and circumstances,” and that the guidance “does not establish legally binding requirements in and of itself.”  Id. at 1, n.4.  The Revised Draft Guidance thus leaves the Federal action agency with the discretion to determine whether and how to use the Guidance.

Although the Revised Draft Guidance states that its purpose is to improve efficiency and reduce litigation, the Revised Draft Guidance’s recommendations may have the unintended consequence of increasing the complexity of NEPA analyses, especially for those agencies whose NEPA analyses have recently been challenged.  In addition, to the extent an agency determines that a GHG analysis is required, preparing such an analysis may increase the already lengthy process of preparing a NEPA document, and may create additional burdens for agency staff.

The Revised Draft Guidance acknowledges that a meaningful analysis of climate change is “particularly complex” because of the global nature of climate change and the interrelationships among sources, causation and impacts.  Revised Draft Guidance at 2.  Nevertheless, the Revised Draft Guidance states that analyzing a “proposed action’s climate change impacts and the effects of climate change relevant to the proposed action’s environmental outcomes can provide useful information to decisionmakers and the public.”  Id.  The Revised Draft Guidance encourages “focused and effective consideration of climate change,” which is consistent with NEPA’s rule of reason.  Revised Draft Guidance at 2, 5.  The Revised Draft Guidance emphasizes throughout the importance of adequately analyzing GHG emissions and climate change, while at the same time reiterating that any such analysis must be “subject to reasonable limits based on feasibility and practicality,” id. at 11, and that analysis for analysis’ sake is not the goal—rather the goal remains informed decision-making.  Id.  Thus, if the agency concludes that evaluating the effects of GHG emissions will not be useful to the decision making process or to the public, the agency should document that decision.  Id. at 10.

Implications for the NEPA Process:

Applicability:  The Revised Draft Guidance applies to “all Federal proposed actions, including individual Federal site-specific actions, Federal grants for or funding of small-scale or broad-scale activities, Federal rulemaking actions, and Federal land and resource management decisions.”  Revised Draft Guidance at 8.  The broad applicability of the Revised Draft Guidance is consistent with the CEQ regulations defining what federal actions require NEPA evaluation.  The Revised Draft Guidance encourages agencies to apply the guidance to all new agency actions, and to the extent possible “build its concepts into currently on-going reviews.”  Id. at 31.  Consequently, project proponents should coordinate with the action agency on how to address the Revised Draft Guidance.

General Principles: The Revised Draft Guidance states that climate change and GHG should be analyzed for “those proposed actions that involve emissions, or that have a long lifespan such that a changing climate may alter the environmental consequences associated with the proposed action.”  Revised Draft Guidance at 3.

The Revised Draft Guidance suggests a two-part analysis:  Agencies should consider a proposed action’s potential impacts on climate change as indicated by the action’s GHG emissions, as well as the impact that climate change may have on the proposed action’s environmental effects. Id. at 3. Also, the Revised Draft Guidance suggests that agencies should consider both short- and long-term effects and benefits of a project based on the agency’s determination regarding the life of the project and the duration of the generation of emissions.   Id. at 12.

The Revised Draft Guidance further suggests that agencies should provide a “frame of reference,” such as “applicable Federal, state, tribal, or local goals for GHG emission reductions,” id. at 14, and that agencies can use “projected GHG emissions and also, when appropriate, potential changes in carbon sequestration and storage” as a proxy for assessing potential climate change impacts.  Id. at 8.

Qualitative versus Quantitative Analysis:  The Revised Draft Guidance acknowledges that an agency retains discretion to perform either a qualitative or a quantitative analysis, depending upon the tools and information available.  Id. at 15.  The Revised Draft Guidance, however, notes that GHG estimation tools are widely available and have been broadly used, and that if such tools are available, “then agencies should conduct and disclose quantitative estimates of GHG emissions and sequestration.”  Id. at 15.  Thus, agencies may feel obligated to undertake quantitative, rather than qualitative, analyses of GHG emissions.

If the projected emissions do not meet or exceed 25,000 metric tons of CO2-e² emissions annually, an agency need not discuss projected quantitative GHG emissions, unless “quantification below that reference point is easily accomplished.” Id. at 18. Including this reference point in the Revised Draft Guidance provides a useful trigger for agency analysis, but the suggestion that an agency may still need to include a quantitative analysis when quantification can be easily accomplished may create a litigation risk if an agency either does not undertake a quantification or does not explain why such analysis is not easily accomplished.

Cost-Benefit Analysis:  The Revised Draft Guidance affirmatively states that a “monetary cost-benefit analysis need not and should not be used in weighing the merits and drawbacks of alternatives when important qualitative considerations are being considered.”  Id. at 16.  If, however, an agency determines that it is appropriate to monetize costs and benefits, the Revised Draft Guidance states that the “Social Cost of Carbon”³ protocol “offers a harmonized, interagency metric that can provide decisionmakers and the public with some context for meaningful NEPA review.”  Id. at 16.   Agencies may now feel constrained to include a cost-benefit analysis, using the Social Cost of Carbon protocol.

Direct and Indirect Impacts: The Revised Draft Guidance recommends that emissions from “upstream activities (that may occur as a predicate of the action under review) and downstream activities (that may occur as a consequence of the action under review) should be included in the NEPA analysis.”  Id. at 11.  This recommendation, however, could be broadly construed contrary to United States Supreme Court precedent⁴

 holding that an agency need not consider, in its direct or indirect effects analysis, impacts the agency has no authority to prevent. This recommendation could lead an agency to discuss impacts beyond those required by NEPA, or could form the basis for a challenge to an agency’s properly limited impact assessment.

Cumulative Impacts: CEQ does not expect that cumulative impacts of GHG emissions alone will necessitate an EIS.  Revised Draft Guidance at 12. Rather, “agencies need to consider whether the reasonably foreseeable incremental addition of emissions from the proposed action, when added to the emissions of other relevant actions, is significant.”  Id.at 11-12.

Proportionality/Agency Discretion: The Revised Draft Guidance cautions that agencies should not rely on boilerplate text to avoid meaningful analysis.  Revised Draft Guidance at 5-6.  The Revised Draft Guidance states that an agency’s analysis of GHG emissions “should be commensurate with the quantity of projected GHG emissions.” Id. at 10.  The Revised Draft Guidance throughout emphasizes meaningful, proportionate analysis. Id. at 10, 14-15, 18, 26.  Nevertheless, agencies now may feel obligated to fully discuss GHG emissions and climate change, even when the proposed project will have limited or no GHG emissions or climate change impacts.

Alternatives: The Revised Draft Guidance suggests that agencies should discuss a comparison of GHG emissions caused by each alternative and mitigation measure, including the no-action alternative, if such a discussion “would be useful to advance a reasoned choice among alternatives and mitigation.”  Id. at 18-19.

Mitigation: The Revised Draft Guidance provides: “[A]gencies should consider reasonable mitigation measures and alternatives as provided for under the existing regulations to lower the level of the potential GHG emissions.”  Id. at 19. The Revised Draft Guidance suggests that agencies consider the “quality” of the proposed mitigation measures, including “permanence, verifiability, enforceability, and additionality.”  Id.  The Revised Draft Guidance sets forth specific examples of alternatives that may be considered for their ability to reduce or mitigate GHG emissions, including energy efficiency, renewable energy, carbon capture and sequestration, and capturing fugitive GHG emissions.  Id.  The Guidance’s suggestions for alternatives and mitigation may create unnecessary complexity for action agencies.

Vulnerable Areas or Populations: The Revised Draft Guidance suggests that particular impacts of climate change on areas and populations considered vulnerable to the effects of climate change be considered in the action’s design or selection of alternatives.  Id. at 23-24.  The Revised Draft Guidance “recommend[s] that agencies periodically engage their environmental justice experts…to identify interagency approaches to impacts that may have disproportionately high and adverse human health or environmental impacts on minor populations and low-income populations.” Id. at 28.  This recommendation may result in agencies determining that additional public involvement is necessary.

Scoping:  The scoping process should identify elements of the proposed agency action related to climate change, such as the nature, location, timeframe, and type of proposed action.  Id. at 26.

Incorporation by Reference:  Agencies do not need to undertake exhaustive research or analysis of potential climate change impacts in the project area or on the project itself, but may “summarize and incorporate by reference the relevant scientific literature.”  Revised Draft Guidance at 27.  The Guidance identifies the peer-reviewed assessment from the United States Global Change Research Program and underlying technical reports and notes as “[p]articularly relevant” the “reports on climate change impacts on water resources, ecosystems, agriculture and forestry, health, coastlines, and arctic regions in the United States.”  Revised Draft Guidance at 27.

Modeling and Using Available Information: The Revised Draft Guidance acknowledges the limitations of climate modeling, and encourages agencies to disclose the limitations of the model when discussing the extent to which the agency relied on a particular model.  Id. at 27. The Revised Draft Guidance also reiterates that agencies “should exercise their discretion to select and utilize tools, methodologies, and scientific and research information that are of high quality and most appropriate for the level of analysis and decisions being made.”  Id. at 28.

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