On January 9, the White House Council on Environmental Quality (CEQ) issued an Interim Guidance on Consideration of Greenhouse Gas (GHG) Emissions and Climate Change (Interim Guidance) “to assist Federal agencies in their consideration of the effects of GHG emissions and climate change when evaluating proposed major Federal actions in accordance with the National Environmental Policy Act (NEPA).”

NEPA requires federal agencies to take a “hard look” at the environmental impacts of their proposed actions, including certain proposed project development activities. On April 20, 2022, CEQ issued a “Final Rule” that revised certain sections of its regulations implementing NEPA. This Final Rule represented “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. The April 2022 Final Rule, among other things, restored the definitions of “direct, indirect, and cumulative” effects and provided that an agency’s NEPA analysis must analyze the “direct effects” of an action, which are caused by the federal action and occur at the same time and place; “indirect effects,” which are caused by the action but occur later in time or farther in distance; and “cumulative effects,” which result from the incremental effects of the action when added to other past, present, and reasonably foreseeable future actions, regardless of what entity (federal or nonfederal) undertakes those actions. As relevant here, the April 2022 Final Rule clarified that “cumulative impacts” include those related to climate change and environmental justice but offered little guidance on how agencies are to analyze those effects.

In its preamble to the April 2022 Phase 1 Final Rule, CEQ explained that it requested public comment on what topics should be covered by Phase 2, and that, in response, stakeholders requested 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.”

CEQ’s Interim Guidance does not represent Phase 2 of the Biden administration’s revisions to the NEPA regulations. Rather, CEQ explained that the Interim Guidance builds upon CEQ’s 2016 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 (2016 NEPA Guidance) and will provide agencies with “a common approach for assessing their proposed actions, while recognizing each agency’s unique circumstances and authorities.” As such, the Interim Guidance is not binding on federal agencies.

Nonetheless, CEQ in the Interim Guidance acknowledges the “increasing urgency of the climate crisis and advances in climate science and GHG analysis techniques,” and aims to update the 2016 NEPA Guidance to incorporate these elements. To this end, the Interim Guidance makes a number of recommendations to federal agencies.

First, agencies when discharging their obligations under NEPA consider the extent to which a proposed action would result in “reasonably foreseeable GHG emissions that contribute to climate change,” the Interim Guidance also recommends that agencies consider the ways in which climate change may affect the proposed action and its reasonable alternatives, including how an evolving climate might alter the action’s effects over time. The Interim Guidance encourages federal agencies to quantify the reasonably foreseeable GHG emissions of a proposed action and its alternatives when possible, but “does not establish any particular quantity of GHG emissions as ‘significantly’ affecting the quality of the human environment.” Rather, it recommends that agencies “use appropriate tools and methodologies to quantify GHG emissions, compare GHG emission quantities across alternative scenarios, and place emissions in relevant context, including how they relate to climate action commitments and goals.” In discussing the recommendation to quantify GHG emissions, the Interim Guidance states that agencies should strive to:

  • Quantify reasonably foreseeable gross GHG emissions increases and gross GHG emission reductions in terms of total CO2 equivalence by factoring in each pollutant’s global warming potential (GWP), using the best available science and data, and relative to baseline conditions;
  • Present, where feasible, annual GHG emission increases or reductions; and
  • Discuss the quantification and assessment tools used to quantify emissions increases or reductions, or where an agency is unable to provide a reasonable range of potential GHG emissions, provide a qualitative analysis and its rationale for determining that a quantitative analysis is not possible.

Next, the Interim Guidance recommends that agencies “disclose and provide context for GHG emissions and climate effects to help decision makers and the public understand proposed actions’ potential GHG emissions and climate change effects,” including by:

  • Applying the best available estimates of the social cost of GHG emissions (SC-GHG) to the incremental metric tons of each individual type of GHG emissions, which will allow monetization in U.S. dollars of the climate change effects expected from the incremental GHG emissions;
  • Explaining how the proposed action and alternatives would help meet or detract from achieving climate action goals and commitments with “more than a statement that emissions from a proposed Federal action or its alternatives represent only a small fraction of global or domestic emissions”;
  • Discussing available scientific literature to help explain the real-world effects associated with an increase in GHG emissions; and
  • Providing accessible comparisons to help the public and decision-makers understand GHG emissions in more familiar terms.

With respect to reasonable alternatives, NEPA requires federal agencies to consider “a range of reasonable alternatives, as well as reasonable mitigation measures if not already included in the proposed action or alternatives.” The Interim Guidance clarifies that agencies should compare the anticipated levels of GHG emissions from each alternative, as well as mitigation measures, to allow the public and the decision-maker to make “an informed choice.” However, the Interim Guidance is clear that “neither NEPA, the CEQ Regulations, [n]or this guidance require the decision maker to select the alternative with the lowest net GHG emissions or climate costs or the greatest net climate benefits.” Rather, it suggests that agencies should evaluate alternatives that may have lower GHG emissions and should identify the alternative with the lowest net GHG emissions or the greatest climate benefit among the alternatives considered.

With respect to an agency’s consideration of direct and indirect effects, the Interim Guidance provides that agencies should attempt to quantify all reasonably foreseeable direct and indirect GHG emissions of their proposed actions and disclose the information and assumptions used in that process. Where information on direct or indirect emissions is not readily available, the Interim Guidance recommends that agencies make an effort to develop a range of potential emissions, including, in the case of fossil fuel extraction or transportation, a “full burn” scenario, which assumes that all of the available resources will be combusted and produces an upper bound estimate of GHG emissions. Where a proposed action would alter the supply of certain types of energy resources, the Interim Guidance suggests that agencies “conduct substitution analys[es] to provide more information on how a proposed action and its alternatives are projected to affect the resulting resource or energy mix, including resulting GHG emissions.”

On the issue of cumulative effects — those effects resulting from the incremental effects of the action when added to other past, present, and reasonably foreseeable actions regardless of what agency or person undertakes those actions — the Interim Guidance raises the issue of environmental justice and recommends that agencies should consider whether certain communities might experience disproportionate cumulative effects. To this end, CEQ also recommends that agencies consider ongoing efforts to incorporate principles of environmental justice into their various programs, policies, and initiatives, and to consider the extent to which effects of climate change in conjunction with those of the proposed action may result in disproportionally high adverse impacts on communities of color, low-income communities, tribal nations, and Indigenous communities.

The Interim Guidance also provides that federal agencies should consider the ongoing impacts of climate change and the foreseeable state of the environment on the proposed action and alternatives, including when evaluating project design, siting, alternatives, climate change resilience, and adaptation over time. The Interim Guidance also recommends that agencies “consider mitigation measures that will avoid or reduce GHG emissions” and “mitigate GHG emissions to the greatest extent possible.” Specifically, the Interim Guidance recommends that agencies should summarize and incorporate by reference the most relevant chapters of national climate assessment reports prepared by either the U.S. Global Change Research Program or the Intergovernmental Panel on Climate Change and should be generally aware of “the evolving body of scientific information as more refined estimates of the effects of climate change … become available.” It also provides that agencies may incorporate by reference other NEPA reviews, including programmatic studies, management plans, research, or other relevant useful information, provided they were “conducted within a reasonable timeframe of the proposed action under consideration such that underlying assumptions are still applicable.”

Finally, the Interim Guidance discusses how agencies can best use the NEPA scoping process to determine the extent to which a more detailed analysis of climate change and GHG emissions is appropriate and provides that agencies are free to develop their own practices for framing NEPA reviews.

CEQ seeks comment on the Interim Guidance and states that it plans “to either revise the guidance in response to public comments or finalize the interim guidance.” Comments are due 60 days after publication in the Federal Register or by March 10.