Revised Draft Guidance for Greenhouse Gas Emissions and Climate Change Impacts

Aviation Alert (January 2015)

On December 18, 2014, the Council on Environmental Quality (CEQ) released revised draft guidance for greenhouse gas (GHG) emissions and climate change impacts under the National Environmental Policy Act (NEPA). The revised guidance seeks to improve the consistency and efficiency of climate change evaluations in NEPA documents prepared by federal agencies, which generally consider the environmental impacts caused by major federal actions, including the granting of federal permits and other approvals.

By way of background, in February 2010, the CEQ previously released draft guidance on this same subject, but – rather than issuing a finalized draft – the CEQ elected to replace the prior draft guidance with this latest revised guidance. The CEQ is soliciting public comment on the revised guidance for a 60-day period, closing February 23, 2015. The CEQ may make changes in response to public comments, but there is no reported timeline for issuing final guidance.

The revised guidance expands the scope and complexity of the NEPA analysis for numerous projects requiring federal permits or other approvals by requiring each federal action subject to NEPA to analyze climate change impacts, alternatives, and mitigation. This impact assessment is required to include a quantitative or qualitative GHG emissions analysis.

While NEPA applies to all federal agencies, the CEQ administers NEPA and prepares NEPA regulations and guidance documents. The CEQ guidance, although not binding, provides direction to federal agencies for their NEPA review. The guidance is often relied on by the courts; therefore, failure to comply with the parameters of such guidance may present a litigation risk.

Considering the Effects of GHG Emissions and Climate Change

The CEQ recognizes the complexity in attributing specific climate change impacts to individual projects.  As a result, the CEQ recommends that federal agencies use projected GHG emissions from the project and also, when appropriate, potential changes in carbon sequestration and storage, as "the proxy for assessing a proposed project's potential climate impacts." This is a critical issue under NEPA because NEPA does not require the consideration of emissions; instead, it requires consideration of the environmental impacts caused by major federal actions. The CEQ's "proxy approach" assumes that emissions resulting from the federal action at issue cause climate change impacts.

The revised guidance states that, when addressing climate change, federal agencies should consider: (1) the potential effects of a proposed action on climate change as indicated by its GHG emissions; and (2) the implications of climate change for the environmental effects of a proposed action. This guidance is likely to serve as federal agency criteria for assessing a project's climate change impacts.

The CEQ states that federal agencies continue to have "substantial discretion" in how they structure their consideration of climate impacts under NEPA, so long as the federal agencies provide the public and decision-makers with "explanations of the bases for their determinations."

Importantly, the revised guidance discourages federal agencies form concluding that GHG emissions from an individual agency action represent only a small fraction of global emissions. The CEQ explicitly states that this type of comparison "is not an appropriate basis" for assessing a project's climate change impacts under NEPA.

The revised guidance also emphasizes the important of providing the public and the decision-maker with a "frame of reference," when discussing GHG emissions. To provide that frame of reference, federal agencies are encouraged to incorporate "applicable agency emissions targets such as applicable Federal, state, tribal, or local goals for GHG emission reductions … and make it clear whether the emissions … are consistent with such goals." Additionally, the CEQ provides the following "example" for this frame of reference: "Bureau of Land Management projects in California, especially joint projects with the State, look at how the agency action will help or hurt California in reaching its emissions reduction goals under the State's Assembly Bill 32 (Global Warming Solutions Act), which helps frame the context for the BLM NEPA analysis." This example may allow federal agencies with project activities in California to rely on Assembly Bill 32 (AB 32) as a useful criterion for assessing the significance of a project's GHG emissions.

Emissions Analysis – Quantifying GHG Emissions and Cost-Benefit Analysis

The revised guidance also encourages federal agencies to include a quantitative assessment of GHG emissions for projects expected to have GHG emissions of 25,000 metric tons or more annually. When using the 25,000 metric tons as a reference point, the revised guidance encourages federal agencies to keep in mind that "the reference point is for purposes of disclosure and not a substitute for an agency's determination of significance under NEPA." The revised guidance emphasizes that the ultimate significance determination remains subject to agency practice for the consideration of context and intensity, as set for in the CEQ regulations.

While the CEQ confirms that NEPA does not require an agency to conduct original research, the revised guidance states that an agency should present the environmental impacts of the proposed project with sufficient information to ensure that scientific integrity of its analysis, which may be quantitative or qualitative.

The revised guidance also addresses the use of cost-benefit analysis, stating that its use of depends on whether it is relevant to the choice among alternatives. However, if an agency chooses to include this analysis, the CEQ endorses the "Federal social cost of carbon estimates" as a "harmonized, interagency metric that can provide decision-makers and the public with some context for meaningful NEPA review." It also recognizes the limitations of the social cost of carbon estimates, including that they were developed for rulemaking analysis, the estimates vary over time, and they are associated with different discount rates.

Consideration of Alternatives and Mitigation

The revised guidance states that, if a comparison of project alternatives on the basis of their GHG emissions would be useful, the agency should conduct such a comparison and provide the information to the public and decision-makers. As to mitigation, the revised guidance states that federal agencies should consider climate change mitigation measures that will reduce GHG emissions as part of the NEPA analysis. The CEQ also suggests numerous potential mitigation measures, including renewable energy, sustainable land management, carbon capture, energy efficiencies, and carbon sequestration (e.g., forest and coastal habitat restoration, tree planting). In addition, as federal agencies evaluate proposed mitigation of GHG emissions, the quality of that mitigation – including its permanence, and enforceability – should be carefully evaluated.

Consideration of Effects of Climate Change on Affected Environment

The revised guidance discusses the consideration of climate change adaptation under NEPA. The CEQ states that both the current and reasonably foreseeable future state of the environment should be used to create the project baseline and that the timeframe for the analysis should mirror the expected lifetime of the project. The revised guidance suggests two types of analysis that are potentially important: (1) whether the physical impacts of climate change will cause the environmental impacts of a project to become worse over time; and (2) when a project is located in an area particularly susceptible to physical climate change impacts, those impacts should be evaluated to determine whether they will impact the ability of an alternative to meet project goals.

In conclusion, the revised guidance informs federal agencies how to apply fundamental NEPA principles to the analysis of climate change through assessing GHG emissions and the effects of climate change for federal actions subject to NEPA. Applying this guidance will promote measured consideration of GHG emissions and the effects of climate change in the NEPA process. The CEQ encourages federal agencies to apply this guidance to "all new actions moving forward and, to the extent practicable, to build its concepts into currently on-going reviews."

If you have any questions or need additional information regarding the above, please do not hesitate to contact Gatzke Dillon & Ballance LLP at 760.431.9501. Importantly, the above discussion is only a summary of the revised draft guidance.  Therefore, application of this revised draft guidance should be subject to careful and thorough evaluation.  By Danielle Morone and Matt Dillon.

[The information contained in this transmission does not constitute a legal opinion and should not be relied upon as legal advice.]