On June 21, 2019, the White House Council on Environmental Quality (CEQ) released a new draft guidance redefining the process federal agencies will use to evaluate greenhouse gas (GHG) emissions under the National Environmental Policy Act (NEPA). In marked contrast to GHG guidance issued by CEQ under the Obama Administration in 2016, the draft guidance encourages federal agencies undertaking NEPA review to follow the “rule of reason” and use their “expertise and experience” to decide whether and to what degree the agency will analyze particular effects of GHG emissions. Therefore, the draft guidance moves to a more deferential approach to agency review under NEPA than the Obama Administration’s prescriptive guidance. The draft guidance will be published in the Federal Register for public review and comment. If finalized, it will replace the Obama Administration’s 2016 guidance, which was withdrawn effective April 5, 2017, after President Trump issued Executive Order (EO) 13783, “Promoting Energy Independence and Economic Growth.”
Hard Shift from 2016
Unlike the 2016 CEQ guidance which directed federal agencies to follow an extensive list of GHG considerations, the 2019 draft guidance proposes a much more streamlined (and more deferential), approach to analyzing the impacts of GHGs under NEPA. For example, the draft guidance notes:
Agencies should quantify a project’s projected direct and reasonably foreseeable indirect GHG emissions when emissions are “substantial enough to warrant quantification,” and when it is “practical” to do so using available data and GHG quantification tools. The guidance stresses that agencies should consider whether quantification of GHG emissions “would be overly speculative” or where necessary information is “not of high quality.”
The guidance does not address what “substantial” means, however it notes that following the “rule of reason,” there must be a close causal relationship between potential impact and anticipated GHG emissions to include GHG emissions in the analysis.
Agencies are not required to prepare separate cumulative effects analyses, nor undertake new research or analysis of climate effects.
Although NEPA requires agencies to consider reasonable alternatives to the proposed action, they are not required to adopt mitigation measures.
Finally, the 2019 draft guidance clarifies that federal agencies are not required to monetize the cost and benefit of a proposed project, and specifically, the social cost of carbon (SCC) need not be considered.
Significance of Draft Guidance
As noted above, CEQ’s 2019 draft guidance marks a dramatic shift from the heavily detailed approach outlined in 2016. CEQ’s draft guidance proposes a more subjective approach to federal agencies conducting reviews of “major federal actions” and explicitly recognizes the significant obstacles in quantifying the effect of GHG emissions under NEPA. For example, the draft guidance clarifies that the social cost of carbon (SCC) is not intended for NEPA decision-making, and states, “SCC estimates were developed for rulemaking purposes to assist agencies in evaluating the costs and benefits of regulatory actions and were not intended for socio-economic analysis under NEPA or decision-making on individual actions, including project-level decisions.” If an agency chooses to consider costs and benefits when analyzing different alternatives, the guidance directs that the agency should incorporate this analysis and disclose all assumptions and uncertainty associated with the analysis.
Similarly, if the agency analyses the impact of GHG emissions in their NEPA review, the draft guidance requires a description of the impacted environment and the reasonably-foreseeable future state of the environment by the proposed action and its reasonable alternatives. Because GHG emissions are often quantified on a global rather than a local scale, analysis of GHG emissions for a specific project will be inherently speculative. The draft guidance explains that under NEPA, only actions that significantly affect the quality of the human environment should be considered. “Significantly” is defined at 40 C.F.R. §1508.27. This section explains that in the case of a site-specific action, the significance of an action would depend on the effect on the specific locale rather than a global perspective. Additionally, when determining whether an action will significantly impact the environment, the agency should consider the intensity of the action, which takes in to consideration such factors as the degree to which the effect is uncertain or involve unique or unknown risks. The draft guidance recognizes that it may be difficult to perform a credible review for GHG impacts under NEPA.
CEQ will allow 30 days for public review and comment on the draft guidance after publication in the Federal Register.