Environmental Newsflash, Issue 14

[Originally published in the American Bar Association Environmental Litigation and Toxic Torts Committee Newsletter, Vol. 10, No. 2, June 2008]

For a printable version, please click here.

In Center for Biological Diversity v. National Highway Traffic Safety Administration, 508 F.3d 508 (9^th Cir. 2007), the Ninth Circuit held just a few months ago that, given evidence that the Earth’s climate may be at a tipping point for irreversible change, even a small amount of greenhouse gas emissions directly or indirectly caused by a major federal action could have a significant impact on the environment and hence require the preparation of an Environmental Impact Statement.  This holding will likely result in increased litigation as plaintiffs challenge more and more federal actions involving determinations that a slight increase in greenhouse gas emissions does not have a significant impact on the environment.

I.          A Brief Overview of the NEPA Process.

Before discussing the impact of the Ninth Circuit’s recent holding, a brief overview of the NEPA process would be helpful.  The NEPA statute requires a federal agency to prepare “a detailed statement on…the environmental impact” of “major federal actions significantly affecting the quality of the human environment.” 42 U.S.C. §4332(2)(C).  Although this is largely a procedural requirement, it can be an expensive and time consuming one.  “Federal actions” include projects and programs entirely and partly financed, assisted, conducted, regulated or approved by federal agencies, as well as new or revised agency rules and regulations. 40 C.F.R. §1508.18.  Given this standard, a multitude of private projects constitute major federal actions. 

Determining whether a major federal action “significantly” impacts the environment requires consideration of both the context and intensity of the environmental effect. 40 C.F.R. §1508.27.  The different contexts in which the effect must be analyzed include society as a whole, the affected region, affected locality and affected interests. Id.  “Intensity” refers, among other things, to the severity of the impact and to whether the action is related to other actions with individually insignificant but cumulatively significant impacts. Id.  The analysis also must consider the indirect environmental effects caused by the action. 40 C.F.R. §1508.8(b); Mid-States Coalition for Progress v. Surface Transportation Board, 345 F.3d 520 (8^th Cir. 2003) (must consider emissions from increased coal consumption resulting from the construction of a new rail line that reaches the coal mines of Wyoming’s Powder River Basin).

As a first step in determining whether an EIS is required, the agency will determine whether an action fits within a “categorical exclusion.” 40 C.F.R. §1501.4(a).  A categorical exclusion is a category of actions that an agency has determined does not have a significant effect on the environment. 40 C.F.R. §1508.4.  If the proposed action does not fall within a categorical exclusion, and it is unknown whether the proposed action will have a significant effect on the environment, the agency should prepare an Environmental Assessment (“EA”) to determine whether the proposed action will have a significant effect. 40 C.F.R. §1501.4(b).  If the agency determines on the basis of the EA not to prepare an EIS, then it will prepare a Finding of No Significant Impact (“FONSI”). 40 C.F.R. §1501.4(e). 

If the proposed major federal action significantly affects the human environment, or if there is a substantial question as to whether it does, then the agency must prepare an EIS. See e.g., Idaho Sporting Cong. v. Thomas, 137 F.3d 1146, 1149 (9^th Cir. 1998).  Among other things, the EIS must set forth the environmental consequences of, and alternatives to, the proposed action. 40 C.F.R. §1502.1.  The section regarding environmental consequences must consider direct, indirect and cumulative environmental effects of the alternatives and the significance of those effects.  The term “effects” include ecological, aesthetic, historic, cultural, economic, social and health effects. 40 C.F.R. §1508.8.  The term “cumulative” effect is defined as “the impact on the environment which results from the incremental impact of the action when added to other past, present, and reasonably foreseeable actions regardless of what agency (Federal or non-Federal) or person undertakes such other actions.” 40 C.F.R. §1508.7.

II.        The Ninth Circuit’s Holding in Center for Biological Diversity.

In Center for Biological Diversity, the National Highway Traffic Safety Administration (“NHTSA”) had issued a final rule that lowered the corporate average fuel economy standards for light trucks.  In the course of considering the rule, the agency had prepared an EA to determine whether the rule would have a significant impact on the environment.  The EA purported to consider, among other things, the impact of carbon dioxide emissions on the environment.  The EA explained that, compared to the “baseline alternative” of the old CAFE standard for light trucks, the new rule would result in a slight decrease in the rate of growth in carbon dioxide emissions. 508 F.3d at 553.  Therefore, the agency determined that the new rule would not have a significant impact on the environment. Id. 

The Petitioners, which consisted of eleven states, the District of Columbia, the City of New York and four public interest organizations, presented evidence, mainly in the form of assessment reports issued by the Intergovernmental Panel on Climate Change, that even a small increase in the amount of carbon dioxide in the earth’s atmosphere may, due to positive feedback mechanisms and non-linear impacts, cause the climate to reach a tipping point that causes irreversible adverse climate change. Id. at 554-55.  For its part, the NHTSA did not conduct an analysis of the impact of a slight increase in carbon dioxide emissions on climate change.  Rather, the agency simply stated that the conclusion that a small increase would not have a significant impact on climate change was “self-evidently reasonable.” Id. at 554.  In addition, the NHTSA argued that the impact of a small increase of carbon dioxide emissions on climate change was too speculative to warrant the agency’s analysis. Id. 

The Ninth Circuit held that the evidence presented by the Petitioners raised a substantial question as to whether the NHTSA rule may significantly impact the environment. Id.  In contrast, the Ninth Circuit noted that the NHTSA had failed to evaluate the impact of a small increase of carbon emissions on climate change and provide a convincing statement of reasons to support its view that the impacts would be insignificant. Id.  Therefore, the court concluded that the NHTSA’s FONSI was arbitrary and capricious, and the agency must prepare an EIS. Id.   

The holding in Center for Biological Diversity likely means, at least in the Ninth Circuit, that a further and more detailed analysis will have to be undertaken as part of the EA to demonstrate the insignificance of a slight increase in emissions of greenhouse gases.  The ruling also appears to be somewhat inconsistent with the recent Eighth Circuit decision in Mayo Foundation v. Surface Transportation Board, 472 F.3d 545 (8^th Cir. 2006), upholding a determination in an EIS that an increase in carbon dioxide emissions was insignificant simply because it was a less than 1% increase.  Mayo involved a case where the agency considered the increased consumption of coal brought about by the construction of a new rail line to the coal mines of Wyoming’s Powder River Basin. 

At the very least, the Center for Biological Diversity decision will likely mean increased NEPA climate change litigation regarding federal actions that result in greenhouse gas emissions, regardless of amount.  It can be expected that cases involving federal actions relating, for example, to coal mining, the transportation of coal, and power line siting decisions to or from coal-fired power plants will be subject to increased regulatory scrutiny regarding greenhouse gas issues.