On April 20, the Council on Environmental Quality (CEQ) issued a Final Rule, revising certain sections of its regulations implementing the National Environmental Policy Act (NEPA). The Final Rule represents “Phase 1” of the Biden administration’s plan to reverse the Trump-era rulemaking, which significantly revised the NEPA regulations for the first time since 1978.

NEPA, sometimes referred to as a “paper tiger,” requires federal agencies to take a “hard look” at the environmental impacts of certain proposed projects but does not mandate any particular outcome. In July 2020, the Trump administration issued its Final Rule, which represented the first update to the NEPA regulations in over 40 years. The 2020 rule contained numerous revisions, many of which were intended to speed up infrastructure projects by reducing delays and paperwork during NEPA reviews. It also revised the definition of “effects,” which traditionally included “direct, indirect, and cumulative effects,” by reducing it to one short paragraph and eliminating references to these three categories, and instead providing that “effects” should not be analyzed “if they are remote in time, geographically remote, or the product of a lengthy causal change.”

In October 2021, CEQ issued a Notice of Proposed Rulemaking (NOPR) to revise its regulations and reverse the Trump-era rule. Among other things, the NOPR provided that “the 2020 NEPA Regulations may have the effect of limiting the scope of NEPA analysis, with negative repercussions for environmental protection and environmental quality, including in critical areas such as climate change and environmental justice.” To address these concerns, CEQ’s NOPR stated that it planned to engage in a series of rulemakings to revise the 2020 regulations. The October NOPR initiated “Phase 1” of these revisions.

The April 2022 Final Rule largely adopted the changes set forth in the NOPR. Most significantly, it restored the definitions of “direct, indirect, and cumulative” effects. Pursuant to the new rule, an agency’s NEPA analysis must analyze “direct effects” of an action, which are caused by the federal action and occur at the same place and time, “indirect effects,” which are caused by the action but occur later in time or farther removed in distance, and “cumulative effects,” which are those effects resulting from the incremental effects of the action when added to other past, present, and reasonably foreseeable actions, regardless of what agency (federal or nonfederal) or entity undertakes those actions. The Final Rule clarifies that “cumulative impacts” includes those related to climate change and environmental justice but offers little guidance on how agencies are to analyze those effects.

With Phase I of the rulemaking complete, CEQ will now turn to Phase 2. In its preamble to Phase 1, CEQ explained that it requested public comment on what topics should be covered by Phase 2 and that stakeholders provided a variety of responses, including additional guidance on addressing impacts related to climate change and environmental justice or more detailed requirements to make the “effects” analyses more objective. CEQ provided that it “is considering these comments in the development of its Phase 2 rulemaking and its guidance on assessing greenhouse gas emissions and climate change in environmental reviews.”

The Final Rule is available here.