Gravel2Gavel Construction & Real Estate Law Blog
On June 21, 2019, the White House Council on Environmental Quality (CEQ) issued draft guidance clarifying the treatment of greenhouse gas (GHG) emissions in environmental impact reviews of federal projects under the National Environmental Policy Act (NEPA). Those wishing to comment on the draft must submit comments within 30 days after it is published in the Federal Register.
The draft guidance is part of the Trump Administration’s continuing efforts to streamline the permitting and environmental review process for infrastructure and energy projects. It replaces NEPA guidance on climate impacts issued in 2016 by the Obama administration, which was rescinded by President Trump’s Executive Order 13783 early in 2017. Although some initial reports suggest that the new draft guidance significantly pulls back from the Obama administration’s approach, on closer comparison it does not depart that much from the major recommendations of the rescinded guidance.
In general, NEPA requires federal agencies proposing to undertake, approve or fund a major federal action to evaluate its environmental impacts, including both direct and reasonably foreseeable indirect effects; to consider alternatives and mitigation; and to discuss cumulative impacts resulting from the incremental effects of the project when added to those of other past, present, and reasonably foreseeable future projects. The new draft and the rescinded 2016 guidance contain similar recommendations regarding an agency’s obligations to consider indirect and cumulative GHG impacts, as well as on the use of cost-benefit analysis and the contentious Social Cost of Carbon (SCC) metric.
- Indirect Impacts. Both the new draft and the rescinded guidance recommend that federal agencies quantify a proposed project’s direct and reasonably foreseeable indirect GHG emissions when the amount is significant enough to warrant quantification, and when the necessary data, tools and methodologies are reasonably available to the agency. If an agency finds that such quantification of GHG impacts is not practicable due to limited data, both documents recommend that the agency should provide a qualitative analysis of such impacts and explain why a quantitative analysis was not possible.
- Cumulative Impacts. Both the new draft and the rescinded guidance explain that a separate GHG cumulative impacts analysis is not required in NEPA reviews because the contribution of each project’s GHG emissions to climate change is inherently a cumulative impact. Thus, discussion of direct and indirect GHG emissions adequately addresses the project’s cumulative impacts regarding climate change.
- Cost-Benefit Analysis and Social Cost of Carbon. Both the new draft and the rescinded guidance emphasize that NEPA does not require agencies to perform monetary cost-benefit analyses of proposed actions. Therefore, neither guidance requires NEPA reviews to incorporate the SCC, a federal interagency metric that uses predictive models to monetize impacts associated with incremental carbon emissions. The new draft guidance also notes that SCC estimates were “developed for rulemaking purposes to assist agencies in evaluating the costs and benefits of regulatory actions” and were not intended for use in NEPA analysis.
The new draft guidance states NEPA reviews “need not give greater consideration to potential effects from GHG emissions than to other potential effects” — language that did not appear in the rescinded guidance. However, it is a truism that NEPA does not prioritize some types of environmental impacts over others; all impact categories must be evaluated.
Perhaps the most consequential new language in the draft guidance is also the most enigmatic. The draft advises that agencies may use projections of an action’s direct and reasonably foreseeable indirect GHG emissions as a measure for assessing potential climate effects. In doing so, agencies should follow “the rule of reason” (also a NEPA truism). The draft goes on to state that agencies should assess “when a sufficiently close causal relationship exists between the proposed action and the effect” and that a “‘but-for’ causal relationship is not sufficient.” However, given that (as the draft acknowledges) the environmental effects of GHG emissions result from cumulative contributions together with those of other projects, it is not clear whether or what effects might be excluded from review for lack of sufficient but-for causal relationship.
In addition, the new draft guidance omits some recommendations that were included in the rescinded guidance. For example, the rescinded guidance encouraged agencies to consider GHG-reducing mitigation measures such as carbon capture and enhanced energy efficiency when “reasonable and consistent” with the proposed action. By contrast, the new draft only notes that “NEPA does not require agencies to adopt mitigation measures.” That is an accurate statement of the law. However, NEPA does require agencies to consider mitigation measures and alternatives before making an informed decision to adopt or reject them. The absence of examples such as carbon capture from the guidance will not relieve or limit the agencies’ obligation to consider reasonable options.
The new draft also omits a recommendation in the rescinded guidance that, in addition to considering impacts of a project’s GHG emissions on the environment, NEPA reviews should address impacts of climate change on the project; for example, sea level rise affecting a coastal project site. Other laws and programs (e.g., for floodplain management) may call for such analysis, but arguably such “reverse NEPA” analysis is not itself a NEPA requirement.
In sum, the substantive differences between the new draft and the rescinded guidance are not so large (with the potential exception of the remark on insufficiency of but-for causation). CEQ’s cautious approach likely reflects recent cases such as WildEarth Guardians v. Zinke[1] and Citizens for a Healthy Community v. Bureau of Land Management[2] which respectively struck down the Bureau’s approval of oil and gas lease sales and a master development plan, for failure to sufficiently consider GHG emissions from “downstream” fuel combustion (though both courts ruled that BLM was not required to address the Social Cost of Carbon). No doubt the guidance, when finalized, will be invoked to support more limited GHG analysis by agencies in this administration, consistent with its other NEPA streamlining actions. Nevertheless, the draft does not provide support for categorically characterizing GHG impacts as too indirect, uncertain, attenuated or (on a project-specific basis) de minimis for NEPA consideration, as some may have expected after the President’s prompt rescission of the prior guidance.
[1] Case No. 16-1724 (RC) (March 19, 2019).
[2] Case No. 1:17-cv-02519-LTB-GPG (March 27, 2019).