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CEQ’s Revised Draft Guidance on Addressing Climate Change under NEPA: Federal Agencies Should Analyze Both GHG Emissions and Impacts of Climate Change on Proposed Action

On December 24, 2014, the Council on Environmental Quality (CEQ) released Revised Draft Guidance on how federal agencies should evaluate GHG emissions and the impacts of climate change when conducting reviews under the National Environmental Policy Act (NEPA).[1] The revised guidance is significantly more detailed than the draft guidance released by CEQ in February 2010, and unlike its predecessor, it applies to all proposed Federal agency actions, including land and resource management actions.

The guidance directs agencies to consider the potential effects of a proposed action on climate change, using projected GHG emissions as a proxy for those effects. Consistent with its earlier guidance, CEQ identifies a reference point of 25,000 metric tons of CO2-e annually as a threshold below which a quantitative analysis of GHG emissions is not recommended unless it can be easily accomplished. However, CEQ does not specify whether agencies should consider both direct and indirect emissions when applying this benchmark.

The guidance also directs agencies to consider the implications of climate change impacts on the proposed action, including potential adverse environmental effects that could result from drought or sea level rise. According to CEQ, such considerations are squarely within the realm of NEPA and will enable the selection of smarter, more resilient actions. This component of CEQ’s guidance accords with the Sabin Center’s recommendations on reverse environmental impact assessment, as outlined in some of our recent publications and in comments submitted to the Federal Energy Regulatory Commission (FERC).

The key elements of the Revised Draft Guidance are summarized after the jump. Note: The Revised Draft Guidance will be open for a 60-day public review and comment period, with comments due by February 23, 2015. Comments can be submitted online at the federal registrar website. If you would like to learn more about this issue, the National Association of Environmental Professionals (NAEP) hosted a webinar on Wednesday, January 28 at 2:00 pm ET. The speakers included Horst Greczmiel of CEQ, Cheryl Laskowski of Atkins North America, and Sabin Center Director Michael Gerrard.

The Revised Draft Guidance supersedes the 2010 draft guidance promulgated by CEQ. Unlike its predecessor, the updated guidance applies to all proposed Federal agency actions, including land and resource management actions.[2] It does not impose any new legal requirements on federal decision-makers, but it does clarify how federal agencies should consider the effects of GHG emissions and climate change in a manner consistent with their preexisting obligations under NEPA. Specifically, the draft guidance directs agencies to consider the following two issues when assessing the environmental impacts of a proposed action:

1. The potential effects of a proposed action on climate change as indicated by its GHG emissions;

2. The implications of climate change for the environmental effects of a proposed action.

These issues must be discussed in sufficient detail to support a reasoned choice between the proposed action and any reasonable alternatives or mitigation measures.

The guidance clarifies that agencies will continue to have “considerable discretion” when determining the appropriate level (broad, programmatic or project-specific) and type (quantitative or qualitative) of analysis required to comply with NEPA. It instructs agencies to apply a “rule of reason” when deciding how to analyze these issues, taking into account the availability of information, the usefulness of that information to the decision-making process and the public, and the extent of the anticipated environmental consequences.[3] In applying this rule, agencies should aim to ensure that “the level of effort expended in analyzing GHG emissions or climate change effects is reasonably proportionate to the importance of climate change related considerations to the agency action being evaluated.”[4]

I. Assessing the Impact of the Proposed Action on Climate Change

The Revised Draft Guidance instructs all federal agencies to consider the extent to which a proposed action and its reasonable alternatives contribute to climate change. Due to the challenge of attributing specific climate impacts to any single action, CEQ recommends that agencies use projected GHG emissions as a proxy for assessing a proposed action’s potential climate change impacts. When appropriate, CEQ also notes that agencies may choose to discuss potential changes in carbon sequestration and quantify the net effect of a proposed action, accounting for both GHG emissions and sequestration.[5]

Threshold for Quantifying GHG Emissions – The guidance sets forth a reference point of 25,000 metric tons of CO2-e annually as a threshold below which quantification of GHG emissions is not recommended unless it can be easily accomplished.[6] Unlike the 2010 guidance, which instructed agencies to evaluate the action’s contribution to climate change if the action’s direct emissions exceeded this threshold, the revised guidance does not specify whether indirect emissions should also factor into the calculation of annual emissions. This threshold is not meant to be a substitute for an agency’s determination of significance under NEPA, but merely a benchmark for when a quantitative analysis of GHG emissions may help a decision-maker choose between the action and any reasonable alternatives or mitigation measures.

Although CEQ’s proposed benchmark is expressed in terms of annual GHG emissions, the guidance instructs agencies to account for “both the short- and long-term effects and benefits based on what the agency determines is the life of a project and the duration of the generation of emissions.”[7] The guidance also clarifies that the proportion of global anthropogenic GHG emissions that can be attributed to a particular action should not be used as a proxy for determining whether to evaluate GHG emissions from the action. CEQ explains:

“… many agency NEPA analyses to date have concluded that GHG emissions from an individual agency action will have small, if any, potential climate change effects. Government action occurs incrementally, program-by-program and step-by-step, and climate impacts are not attributable to any single action, but are exacerbated by a series of smaller decisions, including decisions made by the government. Therefore, the statement that emissions from a government action or approval represent only a small fraction of global emissions is more a statement about the nature of the climate change challenge, and is not an appropriate basis for deciding whether to consider climate impacts under NEPA.”[8]

Finally, the guidance recommends that the agency’s determination regarding the depth and type of analysis (e.g., quantitative or qualitative) should be informed by the tools and information available to conduct that analysis. Federal agencies should typically disclose quantitative estimates of GHG emissions associated with a proposed action when quantification tools or methodologies are readily available and this information would help the decision-maker and the public evaluate the proposed action in light of reasonable alternatives and mitigation opportunities.[9]

Direct and Indirect Effects

The Revised Draft Guidance instructs agencies to assess both direct and indirect climate change effects, taking into account both the proposed action and any “connected” actions, so long as these effects are “reasonably foreseeable.” Specifically, the NEPA analysis should account for emissions from activities that have a “reasonably close causal relationship” to the Federal action, including those that occur as a predicate for the agency action (upstream emissions) and as a consequence of the agency action (downstream emissions).[10] For example, the guidance notes that the NEPA analysis for a proposed open pit mine could include the reasonably foreseeable emissions from different components of the mining process, such as clearing land for extraction, building access roads, transporting the extracted resource, refining or processing the resource, and consuming the resource.

Alternatives and Mitigation Measures

The guidance specifies that agencies should compare the levels of GHG emissions attributed to the proposed action and reasonable alternatives “if a comparison of these alternatives based on GHG emissions, and any potential mitigation to reduce emissions, would be useful to advance a reasoned choice among alternatives and mitigations.”[11] For mitigation measures, the guidance recommends that agencies carefully evaluate the quality of mitigation opportunities based on their permanence, verifiability, enforceability and additionality.[12] If mitigation measures are adopted to support a Finding of No Significant Impact (FONSI) or Record of Decision (ROD), the guidance instructs federal agencies to adopt an appropriate monitoring program for ensuring that emissions reductions actually occur.

II. Assessing the Impact of Climate Change on the Proposed Action

The Revised Draft Guidance further specifies that federal agencies should consider “the ways in which a changing climate over the life of the proposed project may alter the overall environmental implications of such actions.”[13] Such impacts may include “more frequent and intense heat waves, more severe wildfires, degraded air quality, more heavy downpours and flooding, increased drought, greater sea-level rise, more intense storms, harm to water resources, harm to agriculture, and harm to wildlife and ecosystems.”[14] Agencies need not undertake exhaustive research of such impacts for a specific action, but rather may summarize and incorporate by reference the relevant scientific literature.[15] The timeframe for this analysis should reflect the projected duration of the action and its impacts.

The guidance highlights several examples of situations where an agency should assess the implications of climate change for a proposed action, including:

· Future projections of rainfall and snow packs should be assessed when reviewing a proposed action that requires water withdrawals from a stream or river.

· Future projections of sea level rise, storm patterns, and storm surge should be assessed when reviewing a proposal for a coastal infrastructure project.

CEQ notes that “[s]uch considerations are squarely within the realm of NEPA, informing decisions on whether to proceed with and how to design the proposed action so as to minimize impacts on the environment, as well as informing possible adaptation measures to address these impacts, ultimately enabling the selection of smarter, more resilient actions.”[16] In doing so, agencies can select alternatives that are more resilient to the effects of a changing climate, and thus “avoid the environmental and, as applicable, economic consequences of rebuilding should potential climate change impacts… shorten the life of the project.”[17]

III. General Considerations for Implementation by Federal Agencies

In addition to the two key issues discussed above, the Revised Draft Guidance also highlights some general considerations for federal agencies as they implement CEQ’s recommendations:

Disclose assumptions – Throughout the guidance, CEQ emphasizes the importance of disclosing assumptions relating to the quantification of GHG emissions, the evaluation of climate impacts, and all other matters relating to the relationship between the project and climate change. For example, when using climate modeling information, agencies “should consider their inherent limitations and uncertainties and disclose these limitations in explaining the extent to which they rely on particular studies or projections.”[18]

Use Existing Informational tools – CEQ notes that federal agencies are expected to make decisions using current scientific information and methodologies, but NEPA does not require these agencies to conduct original research to fill scientific gaps. Rather, the guidance advises agencies “to use existing information and tools when assessing future proposed actions.”[19] For example, CEQ recommends that agencies conducting a cost-benefit analysis use the federal social cost of carbon to assign a monetary value to emissions generated or avoided by the project.[20]

Provide a Frame of Reference – The guidance recommends that federal agencies provide a frame of reference for both the decision-maker and the public when discussing GHG emissions and climate-related impacts. Specifically, agencies can incorporate by reference any applicable emissions standards developed by federal, state or local regulators and discuss how the proposed action will contribute to or interfere with the attainment of those standards.

Programmatic EIS Analysis – The guidance encourages federal agencies to use programmatic EIS analysis to ensure that GHG emissions and climate-related impacts are discussed at a level that is most useful for decision-makers and the public. CEQ identifies some examples of project- or site-specific actions that can benefit from a programmatic NEPA review, including: constructing transmission towers, conducting prescribed burns, approving grazing leases, granting a right-of-way, authorizing leases for oil and gas drilling, authorizing construction of wind turbines and approving hard rock mineral extraction.[21]

The goal of these recommendations is to make the NEPA efficient and useful for decision-makers and the public.

[1] Revised Draft Guidance for Federal Departments and Agencies on Consideration of Greenhouse Gas Emissions and the Effects of Climate Change in NEPA Reviews, 79 Fed. Reg. 77,802 (Dec. 24, 2014), [enhanced version available to subscribers].

[2] In the 2010 Draft Guidance, CEQ noted that: “Land management techniques, including changes in land use or land management strategies, lack any established Federal protocol for assessing their effect on atmospheric carbon release and sequestration at a landscape scale. Therefore, at this time, CEQ seeks public comment on this issue but has not identified any protocol that is useful and appropriate for NEPA analysis of a proposed land and resource management actions.” CEQ, Memorandum for Heads of Federal Departments and Agencies: Draft NEPA Guidance on the Consideration of the Effects of Climate Change and Greenhouse Gas Emissions (Feb. 18, 2010).

[3] 79 Fed. Reg. 77,802, 77,803 (Dec. 24, 2014).

[4] CEQ notes that this concept of “proportionality” is “grounded in the fundamental purpose of NEPA to concentrate on matters that are truly significant to the proposed action.” Id. at 77,826. See also 40 C.F.R. § 1500.4(b), [enhanced version available to subscribers], 1500.4(g) and 1501.7, [enhanced version available to subscribers].

[5] Id.

[6] Id. at 77,827-28.

[7] Id. at 77,826.

[8] Id. at 77,825.

[9] Id. at 77,827.

[10] Id. at 77,825-26. See also 40 C.F.R. § 1508.25, [enhanced version available to subscribers], (actions are connected if they automatically trigger other actions which may require EISs, cannot or will not proceed unless other actions are taken previously or simultaneously, or are interdependent parts of a larger action and depend on the larger action for their justification); 40 C.F.R. § 1508.8, [enhanced version available to subscribers], (defining “direct effects” as those that are caused by the action and occur at the same time and place; and “indirect effects” as those are caused by the action and are later in time or farther removed in distance, but are still reasonably foreseeable, such as growth inducing effects).

[11] Id. at 77,828.

[12] Id. at 77,828.

[13] Id. at 77,825.

[14] Id.

[15] Id. at 77,830.

[16] Id. at 77,828-29. In addition, the draft guidance notes that “climate change adaptation and resilience… are important considerations for agencies contemplating and planning actions with effects that will occur both at the time of implementation and into the future.” Id.

[17] Id. at 77,829.

[18] Id. at 77,830. See also 40 C.F.R. §§ 1502.21, 1502.22, [enhanced version available to subscribers].

[19] Id. at 77,824.

[20] Id. at 77,827.

[21] Id. at 77,830.

Reprinted with permission from Climate Law Blog

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