On May 27, the Washington Department of Ecology (“Ecology”) released draft Guidance regarding the analysis of climate change impacts under Washington’s State Environmental Policy Act ("SEPA"). The Guidance, which will be open for comment until June 25, proposes extensive analysis of both direct and indirect greenhouse gas ("GHG") emissions potentially resulting from government actions covered under SEPA. Among the government actions that are subject to SEPA’s requirements are local governments’ issuance of land use and construction permits for many types of projects, especially commercial, industrial, or larger residential developments. The Guidance also describes potential mitigation measures that project proponents may be required to undertake. Given the broad scope of the Guidance, it is essential that owners and developers of real estate, as well as any business or institution with expansion plans, become familiar with these proposed requirements.

About SEPA

SEPA, which is codified under Chapter 43.21C, RCW, requires review of the environmental impacts of any project that receives state funding or a state approval (such as a land use or construction permit). SEPA is modeled on the federal National Environmental Policy Act ("NEPA") (see DWT’s recent alert on new Guidance regarding analysis of GHG emissions under NEPA). However, NEPA is a purely procedural statute, requiring only disclosure. In contrast, SEPA vests agencies with substantive authority to require mitigation of environmental impacts that are identified through a SEPA analysis. See RCW 43.21C.060.

Analyzing GHG emissions

The Guidance requires project proponents to calculate the GHG emissions of the proposed project during the SEPA process. Ecology describes three types of emissions that the developer must examine. “Scope One” emissions are those under the direct control of the proponent (e.g., emissions from on-site stationary fuel combustion and emissions from vehicles that are a necessary component of the proposed project). “Scope Two” emissions are those resulting from energy purchased by the project (such as power plant emissions by the utility that serves the project). “Scope Three” emissions are those that are a consequence of project activities, and include emissions from vehicle traffic, emissions from outsourced or off-site project activities, and “embodied” emissions resulting from the production and transportation of purchased goods used in the facility or project. See Guidance Part 5, Sources of Greenhouse Gas Emissions, here.

Therefore, the developer of a large shopping mall, for example, would be required to consider not only the GHG emissions of on-site heating and cooling systems, but also tailpipe emissions from customer and employee vehicles, emissions from the power plant supplying electricity purchased by the mall’s owner, and the emissions that resulted from the production and distribution of every product sold. Proponents should also consider the effect of changing the use of land on GHG emissions—such as, for example, loss of the carbon sequestration provided by any trees clearly during construction.

Mitigation

The new Guidance lists many different mitigation options, depending on project type. These range from clustering development to installation of combined heat and power systems to positioning buildings to take advantage of natural light. However, the Guidance is highly skeptical of the use of offset credits for mitigation. Ecology emphasizes that “many offset projects are highly controversial.” Ecology notes, particularly, that verification of offsets can be challenging, that it is difficult to ensure that the offsetting effect of the project will be permanent, and that projects may be abandoned. Ecology urges those considering the use of offsets for SEPA compliance to contact Ecology first. See Guidance Part 7, Reducing Greenhouse Gas Emissions, here.

For a perspective on how mitigation requirements might play out in Washington, project developers should take a look at a series of suits brought by the Attorney General of California under that state’s very similar environmental review statute. For example, a major retail chain recently agreed to install rooftop solar to comply with GHG emissions mitigation requirements. Other mitigation measures that have been required in California are listed at the Attorney General’s website.

Planning for SEPA review

Ecology is accepting comments on the proposed Guidance until June 25. The Guidance will become effective shortly after that date. Although guidance documents, unlike regulations, are not legally binding, they are a statement of how the agency interprets the law. Therefore, project proponents should be prepared to submit SEPA documents that comply with the requirements of the Guidance. In particular, project proponents should think early and creatively about mitigation strategies and should develop a clear, consistent methodology for measuring GHG emissions.