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CEQ Issues Interim Guidance for Agencies Consideration of Greenhouse Gas Emissions and Climate Change under NEPA
Practical Law Legal Update w-038-1704 (Approx. 6 pages)
CEQ Issues Interim Guidance for Agencies Consideration of Greenhouse Gas Emissions and Climate Change under NEPA
by Practical Law Finance
| Published on 11 Jan 2023 • USA (National/Federal) |
The Council on Environmental Quality (CEQ) issued interim updated guidance to assist federal agencies in analyzing greenhouse gas (GHG) and climate change effects of proposed actions under the National Environmental Policy Act (NEPA).
On January 6, 2023, the White House Council on Environmental Quality (CEQ) issued updated interim guidance (interim guidance) to help federal agencies analyze and better understand the greenhouse gas (GHG) emissions and climate change effects of actions subject to federal agency review under the National Environmental Policy Act (NEPA) (see 88 Fed. Reg. 1196 (2023)). The guidance is intended to deliver more certainty and efficiency in the permitting process for clean energy and other infrastructure projects.
According to the CEQ, because of "the urgency of the climate crisis and NEPA's important role in providing critical information to decision makers and the public," NEPA reviews should:
- Quantify proposed actions' GHG emissions.
- Place GHG emissions in appropriate context.
- Disclose relevant GHG emissions and relevant climate impacts.
- Identify alternatives and mitigation measures to avoid or reduce GHG emissions.
The interim guidance is effective immediately with public comment due on or before March 10, 2023.
The CEQ issued the guidance as interim guidance so that federal agencies may use it immediately while CEQ seeks public comment on the guidance. It intends to either revise the guidance in response to public comments or finalize the interim guidance.
Background
NEPA requires federal agencies to consider the environmental impacts of "major Federal actions significantly affecting the quality of the human environment" before taking these actions (42 U.S.C. § 4332(2)(C)). Major federal actions include private projects (for example, liquefied natural gas and natural gas pipeline projects) that receive federal permits or financing. This agency action may require the relevant agency to prepare an environmental impact statement. For more information on the NEPA process, see Practice Note, Environmental Impact Review: Overview.
The scope of NEPA review and the extent to which it should take into account GHG emissions has been the subject to significant regulatory change in the recent years:
- In August 2016, during the Obama administration, the CEQ issued Final Guidance for Federal Departments and Agencies on Consideration of Greenhouse Gas Emissions and the Effects of Climate Change in National Environmental Policy Act Reviews (the 2016 GHG Guidance) (see 81 Fed. Reg. 51866 (Aug. 8, 2016)).
- On April 5, 2017, during the Trump administration, the CEQ withdrew the 2016 GHG Guidance, as directed by Executive Order 13783, Promoting Energy Independence and Economic Growth (see 82 Fed. Reg. 16576 (Apr. 5, 2017)).
- On June 26, 2019, the CEQ issued draft GHG guidance which narrowed the scope of federal agency GHG reviews under NEPA (see 84 Fed. Reg. 30097 (June 26, 2019)) and Legal Update, CEQ Limits Scope of Greenhouse Gas Reviews).
- On July 15, 2020, the CEQ issued the final rule, "Update to the Regulations Implementing the Procedural Provisions of the National Environmental Policy Act (NEPA)," which made significant changes to the regulations implementing NEPA to streamline and modernize NEPA reviews and facilitate the permitting of infrastructure projects (the 2020 Final Rule) (see 85 Fed. Reg. 43304 (July 15, 2020)). Under the 2020 Final Rule, federal agencies had one year (or until September 14, 2021) to propose revisions to their NEPA procedures to comply with that rule. For more information on the 2020 Final Rule, see Legal Update, CEQ Issues a Final Rule Revising the National Environmental Policy Act.
- On January 20, 2021, President Biden issued Executive Order 13990, Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis, highlighting his administration's focus on science and asking federal agencies to review Trump-era regulations for consistency with his administration's priorities (see 86 Fed. Reg. 7037 (Jan. 20, 2021)).
- On January 27, 2021, President Biden signed Exective Order 14008, Tackling the Climate Crisis at Home and Abroad, which among other things, required the CEQ to ensure that federal permitting decisions consider the effects of GHG emissions and climate change (see 86 Fed. Reg. 7619 (Jan. 27, 2021)).
Consistent with the Biden executive orders, the CEQ initiated a comprehensive review of the 2020 Final Rule to ensure that they provide for sound and efficient environmental review of federal actions in a manner that enables meaningful public participation, advances environmental justice, respects Tribal sovereignty, protects US resources, and promotes better environmental and community outcomes. This review is being conducted in two Phases. In Phase 1, the CEQ will address some of the regulations that affect how NEPA is implemented and will consider the NEPA regulations and assess the revisions that may be needed in Phase 2.
As part of this review, the CEQ:
- On February 19, 2021 rescinded the 2019 draft guidance (see 86 Fed. Reg. 10252 (Feb. 19, 2021)) and Legal Update, CEQ Rescinds Draft Guidance Intended to Limit Greenhouse Gas Considerations in the Review of Infrastructure Projects).
- On June 29, 2021 issued an interim final rule (see 86 Fed. Reg. 34154 (June 29, 2021)) amending the requirement that agencies propose changes to existing agency-specific NEPA procedures by September 14, 2021 to comply with the 2020 Final Rule and postponed this requirement by two years to September 14, 2023 (see Legal Update, CEQ Issues Interim Final Rule Delaying Revisions to the National Environmental Policy Act).
- On April 20, 2022 issued the "National Environmental Policy Act Implementing Regulations Revisions" to amend certain provisions of its regulations for implementing NEPA (the April 2022 Rule). The rule addresses the purpose and need of a proposed action, procedures for implementing the CEQ's NEPA regulations, and the definition of "effects" (see 87 Fed. Reg. 23453 (Apr. 20 2022)) and Legal Update, CEQ Issues Final Rule Restoring Certain NEPA Provisions, Reversing Trump-Era Policies).
The interim guidance replaces the 2016 GHG guidance that was withdrawn under Trump E.O. 13783. It builds on the April 2022 Rule, which restored clarity to key provisions of the NEPA regulations and the administration's May Permitting Action Plan, which outlines the administration's strategy for ensuring that federal environmental reviews and permitting processes are effective, efficient, and transparent, guided by the best available science to promote positive environmental and community outcomes, and shaped by early and meaningful public engagement. For more information on the Permitting Action Plan and President Biden's energy and environmental priorities, see Article, Biden Administration Energy and Climate Change Policies and Regulations: 2022 Tracker.
Terms of the Interim Guidance
The interim guidance recommends that agencies account for GHG emissions in NEPA reviews and provides federal agencies a common approach for assessing their proposed actions under NEPA, while recognizing each agency's unique circumstances and authorities.
Specifically, the new interim guidance:
- Updates the 2016 GHG guidance consistent with current developments in climate science, caselaw, and the urgency of the climate crisis.
- Emphasizes a "rule of reason" approach that the depth of NEPA analysis should be proportional to a project's impacts and clarifies that projects that will reduce GHG emissions, such as certain renewable and low GHG projects, can have less detailed GHG emissions analysis.
- Clarifies best practices for analyzing climate change effects, by clarifying the need to quantify indirect emissions, which will help projects avoid legal setbacks and provide transparency to help drive climate-smart decisions.
- Recommends that agencies provide additional context for GHG emissions, including through the use of the best available social cost of GHG (SC-GHG) estimates, to translate climate impacts into the more accessible metric of dollars, allow decision makers and the public to make comparisons, help evaluate the significance of an action's climate change effects, and better understand the tradeoffs associated with an action and its alternatives.
- Recommends that agencies use projected GHG emissions associated with proposed actions and their reasonable alternatives to help assess potential climate change effects.
- Recommends that agencies mitigate GHG emissions to the greatest extent possible.
- Advances environmental justice by encouraging agencies to meaningfully engage with affected communities and incorporate environmental justice considerations into climate-related analysis.
- Supports broad scale or programmatic approaches that can make later reviews more efficient.
Practical Implications
According to CEQ Chair Brenda Mallory these updated interim guidelines "will provide greater certainty and predictability for green infrastructure projects, help grow our clean energy economy, and help fulfill President Biden's climate and infrastructure goals."
The updated interim guidance does not establish or change legal requirements, but federal agencies are likely to rely on this guidance when conducting NEPA reviews. Courts may also give some deference to the guidance as they have done with other CEQ guidance.