Six Ways the Next NEPA Rule Can Improve Climate Analysis

For over fifty years, the National Environmental Policy Act (NEPA) has guided federal agency action with a common-sense requirement: before taking action that could significantly damage the environment, such as approving an infrastructure project or resource management plan, the agency must fully analyze the action’s environmental effects. So many were understandably concerned in 2020, when the Council on Environmental Quality (CEQ), acting under the Trump Administration, gutted its implementing regulations under NEPA.

Fortunately, CEQ gave the world an Earth Day present last month: a final rule restoring key features to its NEPA implementing regulations and reversing several components of the 2020 rollback that could have undermined robust climate change analysis. The new rule is welcome news for the planet, its human and non-human inhabitants, and the integrity of bedrock environmental law. But CEQ can — and must — go further.

In its latest rule, CEQ reaffirmed its intentions to conduct a “Phase 2” rulemaking during which it would further revise the regulations to better “advance environmental, climate change mitigation and resilience, and environmental justice objectives.” My colleague Max Sarinsky and I wrote a policy brief outlining six simple regulatory revisions that CEQ should prioritize for its Phase 2 rulemaking to improve consideration of climate change in environmental review.

As driven home by the most recent Intergovernmental Panel on Climate Change assessment reports, climate change is already causing devastating damage around the world, contributing to withering droughts, scorching heat, record floods, crippling storms, and other impacts. Without immediate and drastic action these damages will get far worse. Federal actions reviewed under NEPA routinely and significantly add to the mounting toll of climate change consequences — and consideration of these consequences can help reveal when a project will do more societal harm than good. For example, the Office of Surface Mining estimated that a reviewed coal mining project would release approximately 190 million tons of greenhouse gases, enough to cause at least $9 billion in climate harms, but the extracted coal would be worth less than $3 billion. Despite the significance of climate impacts — and prevailing case law — agency assessments of climate change impacts under NEPA are routinely cursory and therefore unlikely to influence the agency’s decisionmaking.

NEPA also presents a crucial opportunity to mitigate or avoid climate change damages to a project and its surrounding environment. For example, consider the review of energy infrastructure projects under NEPA. As the U.S. Government Accountability Office explained in a report, “U.S. energy infrastructure is increasingly vulnerable to a range of climate change impacts — particularly infrastructure in areas prone to severe weather and water shortages.” The report highlighted that the Gulf Coast alone contains almost 4,000 oil and gas platforms, many of which are now vulnerable to damage or disruption from wind and storm surges as sea levels rise. When damaged during storms, these platforms and other fossil fuel infrastructure could contribute to disastrous oil spills. Assessing risks like these — and the measures to mitigate them — during NEPA review is a no-brainer that can protect the environment, communities, and the projects themselves.

Simply put, without robust consideration of climate change, agencies cannot fulfill NEPA’s core purpose “to promote efforts which will prevent or eliminate damage to the environment and biosphere and stimulate the health and welfare of man.” Despite this central relevance to NEPA’s purpose, agency analysis has consistently fallen short when considering how a proposed action will worsen climate change or how climate change will damage the project and surrounding, affected environment during environmental review.

In its Phase 2 rulemaking, CEQ can better clarify agencies’ existing responsibilities under NEPA to consider climate change impacts. The six recommendations in the “Ensuring Robust Consideration of Climate Change Under NEPA” policy brief are summarized below. Each is consistent with the purpose, structure, and text of NEPA and will better ensure that environmental review includes consideration of both an action’s greenhouse gas emissions (the action’s impact on climate change), and the impacts of climate change on the action and environment affected by the action (climate vulnerability and resilience impacts).

Six Ways for CEQ’s Next NEPA Rule To Improve Climate Analysis:

1. Revise the definition of “effects” to explicitly reference climate-related effects, including both an action’s greenhouse gas emissions and the impacts of climate change on the action and environment affected by the action. Such a change would reflect federal case law and add clarity regarding the effects that an agency must analyze following the confusion caused by the 2020 Rule.

2. Revise the definition of “effects” to clarify that NEPA requires assessment of the real-world impacts of greenhouse gas emissions and other pollutants (and not merely to estimate the volume of emissions). As the D.C. Circuit has explained, merely listing the quantity of emissions is insufficient if the agency “does not reveal the meaning of those impacts in terms of human health or other environmental values,” since “it is not releases of [pollution] that Congress wanted disclosed” but rather “the effects, or environmental significance, of those releases.” Yet agencies frequently disregard this command with respect to greenhouse gases, prompting the need for further clarification.

3. Rescind regulatory provisions inserted in 2020 that inappropriately suggest that NEPA analysis should ignore effects beyond the nation’s borders. Under the NEPA statute, agencies must “recognize the worldwide and long-range character of environmental problems.” And some courts have held that foreseeable transboundary effects must appear in NEPA analysis. Yet in the 2020 Rule, CEQ inserted several provisions suggesting that transboundary impacts — such as the effects of greenhouse gases emitted within the United States beyond the nation’s borders — need not be assessed. Those amendments should be rescinded.

4. Amend the regulation on the treatment of uncertainty and incomplete information during environmental review to apply to all impacts assessed under NEPA, not only significant impacts requiring an environmental impact statement. This provision requires agencies to use “research methods generally accepted in the scientific community” for uncertain impacts, but it currently applies only when the impact has already been determined to be significant. Since using generally accepted research methods, like the social cost of greenhouse gases, can help an agency determine that those impacts are significant in the first place, this disparate treatment can prevent a fair examination of significant climate impacts.

5. Revise the definition of “affected environment” to explicitly include climate change impacts. In a world increasingly shaped by the current and future impacts of climate change, an effective baseline assessment of the environment must incorporate forward-looking climate projections, but surveys of environmental impact statements reveal a pattern of superficial and incomplete review of climate change impacts on the affected environment. CEQ should specify the need to consider the full range of climate change impacts affecting the area, and efforts to mitigate these impacts, based on the best available science.

6. Clarify that scientific accuracy for climate change data requires forward-looking projections and appropriately scaled data. Further regulatory clarification can help correct agencies’ use of out-of-date information that may contribute to underestimating climate risks. It can also further agencies’ use of data at the appropriate scale for each impact of concern. For example, a global scale is likely necessary to fully capture the extent to which a project contributes to climate change, whereas a local scale utilizing downscaled data may be necessary to better predict the impacts of climate change on the affected environment.

The policy brief provides a top-level overview of these six recommendations. For further detail, see the Institute for Policy Integrity’s comment letter to CEQ filed in November 2021. As that letter explains, CEQ should also issue guidance to agencies that provides further detail on what constitutes adequate review of climate change under NEPA. Through regulatory revisions and further climate guidance, CEQ can help improve climate change analysis under NEPA and better ensure that agencies make well-informed decisions based on the best available science about climate change.

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The Institute for Policy Integrity is a non-partisan think tank at NYU Law using economics and law to protect the environment, public health, and consumers.

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Dena Adler

Dena Adler

Research Scholar at the Institute for Policy Integrity at NYU School of Law working on federal climate and energy policy.

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