Just before Christmas, the White House Council on Environmental Quality (“CEQ”) published revised draft guidance intended to direct federal agencies on when and how to consider the effects of greenhouse gas (“GHG”) emissions and climate change when evaluating the environmental effects of proposed agency actions under the National Environmental Policy Act (“NEPA”).  Consideration of climate change is not a new phenomenon in agency NEPA reviews, decision-making, or litigation.  Nevertheless, the draft guidance is noteworthy for the sheer breadth of its envisioned climate change analysis for all projects with a federal nexus.  It could significantly alter how federal agencies approach NEPA review.  As written, the open-ended draft guidance could engender significant delays, confusion, or new grounds for challenging projects.

This draft guidance represents a significant departure from an earlier version released almost four years ago (and never finalized).  If adopted, the draft guidance would apply to all proposed major federal actions, including site-specific projects, project grants, permit issuance, rulemaking, and land and resource management decisions.  Additionally, this recent draft more fully recognizes agency discretion in complying with NEPA and allows greater flexibility in determining when, how, and to what extent climate change analyses are to be included in agency NEPA documents.  From a project proponent’s viewpoint, that could be a good or a bad thing.

The CEQ sets out a two-fold inquiry for all proposed major federal actions.  Specifically, federal agencies should consider:

  1. the extent to which a proposed action and its reasonable alternatives contribute to climate change (through GHG emissions or proxies); and
  2. ways in which a changing climate may affect the resources impacted by the proposed action, or the ways in which climate change may affect the proposed action itself.

While CEQ disclaims any new legally binding requirements, as a practical matter most agencies will defer and conform to the new guidance for pending and future NEPA analyses.  Given the ubiquitous scope of climate change considerations, it is critical that stakeholders provide comments within the next 60 days before CEQ considers finalizing the guidance.

Here are some of the guidance highlights:

When and How to Consider GHG Emissions

Climate change is the ultimate cumulative effect.  The CEQ recognizes the difficulty in discerning the impact that any given federal action may have on the environment via its contribution to overall climate change.  Yet, the guidance disapproves of agency choices not to consider climate impacts based on the mere fact that “emissions from a government action or approval represent only a small fraction of global emissions.” 79 FR 77801, 77825 (December 24, 2014).                                                                   

When describing the climate change impacts of a given action, the guidance encourages agencies to use a “quantitative analysis” of emissions where “tools or methodologies are available” to project and quantify those emissions.  Id. at 77809.  CEQ provides a “reference point” of 25,000 metric tons of CO2-equivalent emissions on an annual basis as a recommended minimum threshold to trigger quantitative analysis of a project’s contribution to climate change.  The guidance is careful to not to suggest that this threshold additionally is a proxy for “significant” effects under NEPA that would require a full-blown Environmental Impact Statement.  For actions estimated to contribute fewer emissions, agencies should engage in a quantitative analysis if “easily accomplished”; otherwise, a qualitative analysis is appropriate.  Id. at 77807.          

While the guidance indicates that comparisons of a given action’s emissions to global emissions are “not an appropriate method for characterizing the potential impacts associated with a proposed action and its alternatives and mitigations,” the document does not indicate what would be a suitable point of comparison.  Rather, the guidance recognizes that the “rule of reason” governs all NEPA analyses, and that agencies should apply the “concept of proportionality,” i.e., “the principle that the extent of the analysis should be commensurate with the quantity of projected GHG emissions.”  Further, the guidance notes that “CEQ does not expect that an EIS would be required based on cumulative impacts of GHG emissions alone.”  Id. at 77826.  Absent other reasonably foreseeable significant impacts, therefore, an action’s contributions to climate change should not by itself compel the preparation of an EIS.  It remains to be seen whether agencies will nevertheless default to more documentation in response to pressure from interest groups and perceived litigation risk.

Federal Land and Resource Management Decisions

In a major departure from the 2010 document, CEQ now offers extensive guidance to land management agencies such as the Bureau of Land Management and the U.S. Forest Service on the consideration of climate change and GHG emissions in the context of land and resource management decisions.  CEQ also now defines “emissions” to include the release of stored GHGs as a result of destruction of natural GHG sinks, such as forests and coastal wetlands.  In general, these agencies should consider climate change impacts commensurate with the temporal and geographical nature of particular decisions.  Some land management practices may result in short-term emissions, but in the long run may also contribute to carbon sequestration through improved ecosystem health and growth of carbon stocks. 

Monetary Cost-Benefit Analysis

While the guidance indicates that it may not always be appropriate to monetize the costs and benefits of federal action, it advises agencies engaging in such cost-benefit analysis to rely on the “Federal Social Cost of Carbon” tool to determine the larger costs associated with GHG emissions.  See Technical Update for the Social Cost of Carbon for Regulatory Impacts Analysis,” (Nov. 2013).  Yet, the guidance simultaneously recognizes that this tool was “developed specifically for regulatory cost-benefit analyses” and its utility for individual decisions is limited and uncertain.

Mitigation and Alternatives

The guidance directs federal agencies to consider the climate change effects of alternatives to the proposed action, including GHG emissions, carbon sequestration potential, trade-offs with other environmental values, and the risk from and resilience to climate change inherent in project or action design.  Among the suggested alternatives and mitigation measures are those designed to reduce or mitigate GHG emissions, utilize lower GHG-emitting technology (e.g.,use ofrenewable energy), employ carbon capture or carbon sequestration techniques, use sustainable land management practices, and those that will capture or beneficially utilize fugitive GHG emissions such as methane.  As a result, proposed actions that fit within those favored categories might receive more streamlined NEPA review, while other projects might receive greater scrutiny.

Consideration of Resilience in the Context of Climate Change

In addition to the contributions a federal action might make to climate change, the guidance also asks agencies to consider how climate change might affect resources that are also affected by the proposed action and how the action itself may be affected by a changing climate.  Environmental consequences of a federal action may be exacerbated by climate change, such as where a proposed action requires water from a stream that has diminishing quantities of available water, or may add heat to a water body that is already exposed to increasing atmospheric temperatures due to climate change.  The guidance also suggests that “[c]limate change effects should be considered in the analysis of projects that are located in areas that are considered vulnerable to specific effects of climate change . . . within the project’s anticipated useful life.”  Id. at 77813.  It notes that the planned life of some federal projects may be shortened by climate change in such areas, and offers the example of a long-term transportation project on a barrier island that may be exposed to sea level rise and increasingly intense storms.  Id. at 77829.

Use of Traditional NEPA Principles and Tools in Considering Climate Change 

The draft guidance recognizes that traditional NEPA tools such as scoping remain available in determining whether and to what extent climate change considerations are appropriate in any given NEPA document.  CEQ acknowledges that agencies may use programmatic NEPA analyses to consider GHG emissions associated with long-range energy, transportation, and resource management actions, and may want to utilize incorporation by reference or tiering in subsequently analyzing discrete, site-specific decisions.  The guidance similarly acknowledges that agencies need not undertake exhaustive research to “fill gaps” in climate science, or wait for new research or information before reaching a final decision for any particular proposed action.  

The revised NEPA GHG guidance will impact all types of federal decisions, including oil and gas, renewable energy, transportation, mining and minerals, pipelines, transmission, and other projects.  The guidance also may impact the scope and timing of NEPA reviews that are well underway.  While the goals of consistency and predictability are laudable, the CEQ has opted to leave much to individual agency (or field office) interpretation.  Commenting on the draft guidance may help head off implementation issues down the line for individual projects.  Based on the Christmas Eve Federal Registerpublication date, the deadline for comments is February 23, 2015.