The National Environmental Policy Act (NEPA) is a foundational environmental statute that requires that federal agencies conduct environmental reviews prior to undertaking major federal actions – such as constructing a highway – that significantly affect the environment. NEPA reviews provide the public the opportunity to offer meaningful input on proposed federal initiatives, and often require that the relevant agencies adopt measures to mitigate the impact of projects on communities, wildlife and natural resources.
In 2016, the Council on Environmental Quality (CEQ) issued guidance to assist federal agencies in considering the effects of greenhouse gas (GHG) emissions and climate change under NEPA when evaluating proposed federal actions. The guidance instructed agencies, when addressing climate change, to consider the potential effects of a proposed action on climate change by assessing GHG emissions and the effects of climate change on a proposed action and its environmental impacts.
In April 2017, the CEQ withdrew its August 2016 GHGs and climate change guidance. In June 2019, the CEQ released a brief three-page draft guidance to replace the earlier August 2016 guidance. The draft guidance indicated that agencies should attempt to quantify a proposed action’s projected indirect GHG emissions, but did not provide guidance on how to calculate indirect GHG emissions. The CEQ also insisted that agencies do not need to employ the social cost of carbon (SCC) metric to determine the costs associated with a proposed federal action, but suggested that the employment benefits of a proposed federal action should be quantified because they could be easily quantified.
In August 2019, California Attorney Xavier Becerra led a coalition of nineteen attorneys general in filing comments in opposition to the draft guidance. The comments warned that the draft guidance “does not take the threat of climate change seriously” and noted that failing to provide guidance on how agencies are to analyze indirect climate change effects under NEPA fails to satisfy the statute’s mandate to provide a “hard look” review of the various alternatives for a federal action. The attorneys general insisted that the draft guidance’s one-sided approach to cost-benefit analysis – quantifying benefits, but forsaking the SCC – of federal actions violates NEPA’s commandment that when agencies choose to quantify the benefits of a proposed action, the agency must also quantify the costs of an action when a quantifying tool, such as the SCC, is available.