CHAPTER 10 ANALYZING CLIMATE CHANGE IMPACTS IN THE NEPA PROCESS: WHAT IMPACT WILL EXECUTIVE ORDER 13783 HAVE ON FEDERAL AGENCIES' NEPA REVIEWS?
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ANALYZING CLIMATE CHANGE IMPACTS IN THE NEPA PROCESS: WHAT IMPACT WILL EXECUTIVE ORDER 13783 HAVE ON FEDERAL AGENCIES' NEPA REVIEWS?
Holland & Hart, LLP
Denver, CO
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ANDREW EMRICH is a Partner with the law firm of Holland and Hart LLP, in Denver, CO. He has represented clients in significant litigation in the areas of mining, oil and gas, and renewable energy projects. On the permitting side, Andrew advances his clients' projects through focused strategies to obtain expeditious and defensible permitting and regulatory approvals. He helps clients challenge and reverse agency regulations and permitting decisions that obstruct energy development. Before joining Holland & Hart, Andrew served in the Bush Administration as Counsel to the Assistant Attorney General at the Environment and Natural Resources Division of the U.S. Department of Justice, where he both litigated significant environmental and natural resources cases and developed and helped develop and implement national litigation positions for federal agencies involving environmental, energy, Native American, and public lands legal positions taken by the United States in courts throughout the country. Before joining Holland & Hart, Andrew served in the Bush Administration as Counsel to the Assistant Attorney General at the Environment and Natural Resources Division of the U.S. Department of Justice, where he both litigated significant environmental and natural resources cases and developed and helped develop and implement national litigation positions for federal agencies involving environmental, energy, Native American, and public lands legal positions taken by the United States in courts throughout the country. Andrew has extensive knowledge of federal environmental and natural resources litigation and federal agencies' administrative and regulatory processes. He effectively advances his clients' interests in litigation and guides clients through the labyrinth of regulatory compliance necessary to authorize their energy and natural resources projects on state, federal, or private lands.
I. Introduction
The National Environmental Policy Act (NEPA) requires that federal agencies consider the combined, incremental effects of human activity, or the "cumulative impacts," in their environmental reviews to ensure that "the range of actions that is considered in NEPA documents include[s] not only the project proposal but also all actions that could contribute to cumulative impacts."1 Perhaps no cumulative impact has been as difficult to quantify and analyze from a NEPA perspective as the effect of a project's greenhouse gas (GHG) emissions on global climate change. Whether and how to analyze the cumulative global climate change impacts of a particular project has been fraught with controversy and this policy friction has been played out at the highest levels of government. The previous presidential administration "advanced guidance and initiatives designed to eliminate or minimize [GHG] emissions and to address climate change."2 A change in our presidential leadership has resulted in a fundamental shift in environmental policies, including how federal agencies are to consider a particular project's impacts on climate change. "One of the keys to the Trump administration's efforts to undo former President Barack Obama's climate change legacy has been to alter the way the government calculates the future cost of carbon emissions."3
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On March 28, 2017, President Trump issued Executive Order No. 13783 titled, "Promoting Energy Independence and Economic Growth."4 The Executive Order (EO) seeks to "promote clean and safe development of our Nation's vast energy resources, while at the same time avoiding regulatory burdens that unnecessarily encumber energy production, constrain economic growth, and prevent job creation."5 To achieve this goal, the EO requires executive departments and agencies to "immediately review [and appropriately suspend, revise, or rescind] existing regulations that potentially burden the development or use of domestically produced energy resources."6 Relevant to this paper, the EO:
(1) instructs the White House Council on Environmental Quality (CEQ) to rescind its final guidance document "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," 7 (CEQ Final Guidance);
(2) disbands the Interagency Working Group on Social Cost of Greenhouse Gases (IWG) and withdraws documents issued by the IWG related to the Social Cost of Carbon (SCC); 8
(3) requires agencies to use OMB Circular A-4 (dated September 17, 2003) (Circular), "when monetizing the value of changes in greenhouse gas emissions resulting from regulations, including with respect to the consideration of
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domestic versus international impacts and the consideration of appropriate discount rates"; 9
(4) instructs the Secretary of the Interior to amend or withdraw Secretary's Order 3338 regarding Federal Land Coal Leasing; 10 and
(5) instructs the Administrator of the Environmental Protection Agency (EPA) to review regulations related to United States Oil and Gas Development. 11
In this paper, we consider what effect the EO's rescission of the CEQ Final Guidance and the SCC documents will have on federal agencies' future NEPA analyses. However, to fully understand the ramifications of President Trump's policy changes and their potential effect, Part II of this paper summarizes12 the goals behind and potentially short-lived implementation of the Obama-era climate change policies. Then, Part III of this paper predicts, to the extent possible, how federal agencies will implement President Trump's changed policies.
II. Obama-Era Climate Change Policies
A. CEQ Final Guidance and the SCC
Toward the very end of President Obama's second term, the CEQ released the CEQ Final Guidance, which recommended to federal agencies how to evaluate GHG emissions and climate change impacts when conducting NEPA reviews for proposed federal actions.13 In particular, the CEQ Final Guidance recommended "that agencies use projected GHG emissions ... as a proxy for assessing potential climate change effects when preparing a NEPA analysis for a
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proposed agency action[.]"14 In addition, it recommended that "[t]he focus [be] on the long-term viability of the project, [and] tying design of alternatives to climate change effects for the useful life of that project."15 Importantly, however, CEQ's Final Guidance was not "binding" on the agencies.16
The SCC, a technical support document prepared by the IWG, provided a way to monetize the cost of GHG emissions in the context of federal rulemakings.17 The 2016 Final Guidance explains that the SCC tool "estimates the marginal damages associated with an increase in carbon dioxide emissions in a given year," and that the SCC was developed to ensure "estimates reflect the best available science and methodologies."18 While the CEQ Final Guidance acknowledges that the SCC was developed to "assess the social benefits of reducing carbon dioxide emissions across alternatives in rulemakings," it nonetheless, suggests that the SCC "can give decision makers and the public useful information for their NEPA review."19 Similarly, the EPA described the SCC as "a commonly estimated measure of the economic benefits of [] GHG emission reductions and represents the present value of the marginal social damages of increased GHG emissions in a particular year."20 Significantly, CEQ's Final Guidance made clear that agencies need not use the SCC method to evaluate GHG emissions as
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part of their cost-benefit NEPA analyses and, instead, the agencies may exercise their discretion in selecting the appropriate method for analyzing the costs and benefits of a proposed project.21
Although designed to be used as part of the regulatory impact analysis for federal rulemakings, the use of the SCC in the project-specific NEPA analyses had begun to gain favor with some federal agencies and courts prior to the issuance of President Trump's March 28, 2017 EO. The SCC was used by agencies in the Obama administration as part of the support for many of the rules intended to reduce GHG emissions. For example, under the Obama administration, the Bureau of Land Management (BLM) relied on the SCC to determine the costs of venting or flaring natural gas in order to support its Waste Prevention Rule.22 Similarly, the EPA monetized the benefits of reducing carbon dioxide emission using the SCC tool in order to justify its Clean Power Plan (CPP).23 In 2015, the BLM issued a memo acknowledging that "some field offices ha[d] included estimates of the SCC in project-level NEPA documents."24
In 2014, the United States District Court for the District of Colorado held that because the SCC was an available tool to be used by the U.S. Forest Service to evaluate the impacts caused by GHG emissions for a particular project, the failure to justify why the SCC was not used in the agency's environmental impact statement ("EIS") as a tool to estimate the costs of the proposed project, where the agency had quantified the benefits, was arbitrary and capricious.25
B. 2003 OMB Circular A-4
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Under the EO, agencies are required to use the 2003 OMB Circular when monetizing the value of changes in GHG emissions.26 The Circular, issued in 2003 by the Office of Management and Budget (OMB), provides "a general framework for conducting a comprehensive cost-benefit analysis and identifies factors an agency should consider in its analysis."27 While a complete discussion of the impact of the Circular is beyond the scope of this paper, it is worth briefly noting...
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