CEQ Issues an Updated Framework for Agencies to Assess Greenhouse Gas Emissions and Climate Impacts
Federal agencies have new guidance to analyze and disclose greenhouse gas (GHG) emissions and climate change under the National Environmental Policy Act (NEPA). On Jan. 9, 2023, the Council on Environmental Quality (CEQ) published the National Environmental Policy Act Guidance on Consideration of Greenhouse Gas Emissions and Climate Change in the Federal Register and it immediately took effect. Federal agencies have been without formal guidance since April 5, 2017, when the CEQ withdrew its previous 2016 guidance published by the Obama administration.
By providing a framework for GHG emissions and climate change impact assessments, the interim guidance seeks to improve the efficiency and consistency of federal reviews. It contains most of the same concepts and generally provides the same instructions for agencies as the 2016 guidance. However, the 2023 interim guidance contains more detailed advice and embodies a greater sense of urgency regarding the immediacy and severity of climate change impacts. The interim guidance applies to all new federal actions subject to NEPA, including many projects in the mining, water, infrastructure, renewable energy and oil and gas sectors.
The Four Foundational Requirements of the Interim Guidance
(1) Quantify the reasonably foreseeable direct and indirect GHG emissions and emissions reductions during the lifetime of the action, no action alternative, and any other alternatives.
- Agencies must quantify both the gross and net GHG emissions of the “reasonably foreseeable lifetime” of the proposed action and alternatives as well as the aggregate GHG emissions as tons of carbon dioxide equivalent (CO2e).
- If an agency cannot quantify GHG emissions for a specific action, it should provide a range of estimated emissions or a qualitative analysis. However, CEQ generally expects agencies to complete a quantitative analysis.
- Agencies should use the “rule of reason” when analyzing projected GHG emissions to ensure that the level of analysis is commensurate with the quantity of emissions associated with the federal action.
- Projects that reduce emissions or do not cause net emissions increases, including many renewable energy projects, may not require an in-depth analysis or warrant a detailed lifecycle GHG emissions analysis.
(2) Analyze the cumulative effects or impacts of each proposed action’s GHG emissions and climate change impacts.
- Last spring, CEQ restored the requirement in its regulations to assess cumulative effects.
- The 2016 guidance did not require agencies to separately quantify or analyze the cumulative effects of a decision or project’s GHG emissions, concluding the direct and indirect effects analyses were adequate.
- The 2023 interim guidance is more stringent, instructing agencies to analyze and publicly disclose cumulative effects by quantifying GHG emissions and providing context, e.g., monetizing climate damages using the social cost of GHG emissions (SC-GHG), considering the damage estimates relative to climate goals and commitments, and summarizing and citing to available scientific literature.
(3) Disclose and provide context for the GHG emissions and climate impacts by monetizing climate damages using the estimated SC-GHG, placing emissions in the context of relevant climate action goals and commitments, and providing common equivalents.
- Agencies should use the SC-GHG to help decision-makers and the public understand and contextualize the GHG emissions and climate change consequences of a proposed action and its alternatives. CEQ recommends using the Interagency Working Group on Social Cost of Greenhouse Gases’ February 2021 Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive Order 13990 for costs and discount rates.
- Agencies also should use other comparison metrics, like comparing the emissions of a proposed action in terms of additional cars on the road.
- Agencies should explain how a proposed alternative would help meet or detract from achieving relevant climate action goals and commitments, including federal goals, international agreements, state or regional goals, tribal goals and agency-specific goals.
(4) Analyze reasonable alternatives, including alternatives that would reduce GHG emissions, and identify available mitigation measures to avoid, minimize, or compensate for climate effects.
- Agencies should consider alternatives to proposed actions that would reduce GHG emissions or increase carbon sequestration potential relative to the baseline.
- Agencies also should consider how climate change may impact the proposed action, particularly project design and siting.
- Developing mitigation measures is particularly important for climate change impacts and GHG emissions.
Impact of the Interim Guidance on Your Project. Although the CEQ withdrew the 2016 guidance, many federal agencies continued to use it informally to guide their analyses of greenhouse gas emissions and climate change. Additionally, federal courts have issued several decisions in the past six years validating concepts in the 2016 guidance, like the requirement to quantify indirect emissions, or imposed requirements that feature in the 2023 interim guidance, like the requirement to conduct a separate assessment of cumulative effects. We see several implications for both ongoing and new project NEPA review:
- Although the 2023 interim guidance is only required for new projects, CEQ strongly suggests it be used on pending projects where it “would inform the consideration of alternatives or help address comments raised through the public comment process.” Thus, the Interim Guidance could affect some existing projects.
- Much of the interim guidance adopts policies and practices agencies assessed under the 2016 guidance. However, the updated and significantly higher SC-GHG and new requirement to assess “cumulative impacts” of GHG emissions and climate change could change the severity and scope of a project’s climate impacts and potentially alter preferred agency alternatives;
- Related to the previous point, there is very little guidance on what is meant by “cumulative impacts” and significant uncertainty about how to apply that to any given project. There will undoubtedly be questions about the proper scope, and what types of impacts (i.e., air, water, waste, environmental justice) should be included.
- Finally, litigation over application of the interim guidance seems inevitable. Courts will be asked to weigh in on key concepts, like the appropriate scope of the cumulative impacts analysis.
Next Steps. Although the Interim Guidance is already in effect, the CEQ will accept public comments until March 10, 2023 (Docket No. CEQ-2022-0005). If you have questions about how the interim guidance will affect your current or proposed project or would like to review a more detailed summary, please reach out—we would be happy to assist.
This document is intended to provide you with general information regarding federal guidance on NEPA. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions. The information in this article is accurate as of the publication date. Because the law in this area is changing rapidly, and insights are not automatically updated, continued accuracy cannot be guaranteed.