New greenhouse gas guidance for federal agencies
On January 9, 2023, the Council on Environmental Quality (CEQ) published interim guidance for assessing greenhouse gas (GHG) emissions and climate change impacts in documents prepared for compliance with the National Environmental Policy Act (NEPA). Although released as interim guidance and not as a federal rule, federal agencies are expected to immediately initiate and implement the steps necessary to comply with all new NEPA documents as of the publication date.
For ongoing NEPA documents, agencies can exercise their judgment whether to apply the interim guidance to these documents. If agencies choose not to, CEQ’s previous 2016 GHG Guidance from the Obama Administration continues to apply. CEQ suggests those NEPA documents that “inform the consideration of alternatives or help address comments raised through the public comment process” may be good candidates for application of the interim guidance.
Building on the 2016 Guidance
CEQ’s new interim guidance is mostly a restatement of the 2016 Guidance, coupled with a few new components (as summarized further below). The restated policies and components include:
- Assessing the potential effects of a proposed action on climate change, as well as the effects of climate change on a proposed action
- Proposing project designs that include considerations of resilience and adaptation to a changing climate
- Quantifying the reasonably foreseeable direct and indirect GHG emissions (including reasonably foreseeable upstream and downstream emissions)
- Following the Rule of Reason for actions resulting in very few GHG emissions
- Analyzing reasonable alternatives, including those that would reduce GHG emissions
- Mitigating GHG emissions associated with their proposed actions to the greatest extent possible
- Incorporating environmental justice considerations into the analyses of climate-related effects
- Using available information and studies
Major changes from 2016 Guidance
Social cost of GHGs: Both the 2016 Guidance and the drafted replacement guidance prepared by CEQ during the Trump administration stated that it was not necessary to include calculating the social costs of GHGs for a NEPA analysis. The interim guidance now recommends that the social costs of these emissions need to be presented in U.S. dollars once the GHG emissions of the alternatives are quantified.
CEQ explains this policy reversal on the rationale that the current practice of only identifying metric tons of GHGs to be potentially emitted can be both difficult to understand and to assess their significance or relevance in the abstract. Whereas calculating the social costs of GHGs can provide “an appropriate and valuable metric that gives decision makers and the public useful information and context about a proposed action’s climate effects even if no other costs or benefits are monetized,” according to CEQ.
The best currently available cost estimates are $51/metric ton for carbon dioxide, $1500/metric ton for methane, and $18,000/metric ton for nitrous oxide, which together represent more than 97% of U.S. GHG emissions. These interim estimates are expected to be replaced in 2023 by much higher costs per ton. For example, a proposed estimate for carbon dioxide is $190 per ton, increasing to $360 per ton in 2050.
Quantifying GHG emissions: For federal agency decision-makers—and subsequently the public—to understand how effectively potential GHG emissions and impacts are being reduced through the NEPA process, the interim guidance has new requirements. Agencies need to quantify GHG emissions by alternative, including for the No-Action Alternative, identifying in the NEPA document the alternative with the lowest net GHG emissions or the greatest net climate benefits. CEQ points to quantification and assessment tools that are widely available and are already in broad use. In the rare instance where quantification is not possible, agencies need to explain why such an analysis cannot be done and should seek to present a reasonable estimated range of quantitative emissions for the proposed action and alternatives.
Mitigation of GHG emissions: The interim guidance details that federal agencies should consider mitigation measures that will avoid or reduce GHG emissions. Given the urgency of the climate crisis, “CEQ encourages agencies to mitigate GHG emissions to the greatest extent possible.” Where potential mitigation measures are not adopted, agencies need to explain why as early as practicable in the NEPA process. Additionally, the interim guidance acknowledges that certain groups—e.g., communities with environmental justice concerns—are more vulnerable to climate-related health effects and may face barriers to engaging on issues that disproportionately affect them. CEQ recommends that agencies identify approaches to avoid or minimize adverse effects on communities of color and low-income communities.
Next steps
Comments on the interim guidance are due on March 10, 2023. CEQ may then either revise the interim guidance in response to public comments or finalize the interim guidance as currently written.
Because the interim guidance hews closely to the 2016 Guidance, ongoing NEPA documents can be easily revised by adding the social costs of the quantified GHG emissions. Given the Biden administration’s major emphasis on mitigating the adverse effects of climate change, agency leadership will likely want to demonstrate compliance with the new guidance to the maximum extent possible on both new and ongoing NEPA documents.
ICF has worked with federal agencies to comply with NEPA for many decades through changing interpretations of CEQ regulations, guidance, court rulings, and administrations. Wherever NEPA goes next, ICF is here to help.
