United States: Washington State Department of Ecology Releases Draft Guidance on Addressing Greenhouse Gas Emissions in SEPA Review

On May 27, 2010, the Washington State Department of Ecology ("Ecology") released a draft guidance document ("Guidance") for use by state and local lead agencies when evaluating proposals under the State Environmental Policy Act ("SEPA") that either:

  • will result in greenhouse gas ("GHG") emissions, or
  • may be vulnerable to the effects of climate change.

In announcing the Guidance, Ecology emphasized the importance of SEPA as a tool that can be used to reduce GHG emissions in Washington state. Ecology stated that until regional or national GHG programs "are adopted and implemented, SEPA can help fill the gaps in existing regulations." Ecology also wanted to avoid potential legal challenges, noting that "[f]ailure to evaluate the environmental impacts of a proposal on the climate could result in a successful legal challenge regarding the adequacy of an agency's SEPA review."

The Guidance states that because proposals that will emit greenhouse gases contribute to regional, national and global environmental impacts associated with those gases, SEPA requires lead agencies to consider whether and how GHGs from a project will contribute to environmental impacts, and how those impacts could be mitigated by avoiding or reducing the levels of GHG emissions.

OVERVIEW OF CLIMATE CHANGE IMPACT EVALUATION PROCESS

The Guidance sets forth specific steps to assess the potential climate impacts of a given proposal and the proposal's vulnerability to climate change:

1. The project proponent identifies and calculates or otherwise assesses the GHG emissions associated with the project over its lifetime, including the construction phase. Until Ecology provides a standard format for this analysis, the assessment can be documented using a draft worksheet to supplement the current SEPA environmental checklist.

2. The project proponent identifies reasonable mitigation that avoids, reduces or compensates for the adverse effects of the emissions.

3. The lead agency, in consultation with the project proponent, assesses the potential effects of climate change on the project itself and how this vulnerability may cause or exacerbate other environmental impacts. Reasonable measures are to be identified to mitigate both.

4. The lead agency makes a threshold determination, assessing the significance of the unmitigated emissions as well as any impacts that may result from the project's vulnerability to the climate change impacts.

5. If emissions from the project will not be mitigated below the level deemed significant, the lead agency prepares an Environmental Impact Statement ("EIS") that analyzes the environmental impacts of climate change, alternatives and mitigation options.

6. The lead agency considers the environmental impacts of climate change when making a decision on a proposal and, if appropriate, uses substantive authority to condition or deny approval of the proposal.

IDENTIFYING EMISSION SOURCES

According to Ecology, lead agencies should ask proponents to "evaluate all aspects of their proposal for all known or expected sources of greenhouse gases that they can reasonably assess or calculate over the life of the project." This would include emissions associated with the construction of the project as well as emissions associated with the project's continued operation or implementation.

The Guidance describes three general categories of emissions that should be considered:

  • Scope one emissions are those under the direct control of the project proponent. These come directly from sources owned by or necessarily associated with a proposal. Examples include GHG emissions from the combustion of fossil fuels by vehicles or equipment owned or operated as a necessary component of the proposal.
  • Scope two emissions are those from purchased energy used to produce electricity, heat, steam or cooling to support or operate the project.
  • Scope three emissions are those produced as a consequence of the proposal from sources not owned by or a part of the proposal. Examples include transportation demand created by the project, emissions from outsourced activities, and "embodied emissions" from the extraction, production and transportation of purchased goods.

In addition to these three categories, land-use changes that release carbon stored in trees and soils or reduce the number of trees available to store carbon in the future should be evaluated as sources of emissions.

Whether and to what degree the various emission sources should be considered, the Guidance notes, will depend on the nature and size of a particular proposal.

CALCULATING OR "OTHERWISE ASSESSING" GHG EMISSIONS

The Guidance suggests that project proponents use "well-accepted emissions factors" when calculating or otherwise assessing project emissions. It lists a variety of GHG protocols that can be used to calculate emissions, such as The Climate Registry's general reporting protocol. The Guidance also indicates that in some circumstances, such as where mitigation measures have already been incorporated to sufficiently reduce GHG emissions associated with a proposal, the lead agency may perform a "qualitative assessment" of any remaining GHG emissions.

MITIGATION

In the Guidance, Ecology lists numerous mitigation actions that could be used to reduce or avoid GHG emissions. These include, for example, actions to increase energy efficiency, minimize vehicle miles traveled, promote cluster development and conservation, and reduce waste. Once estimated emissions have been reduced or avoided to the maximum extent possible, Ecology suggests that carbon offsets could be considered to mitigate some or all of the remaining emissions. Where reduced emissions or increased carbon storage at other locations are used as offsets, however, the Guidance emphasizes that offsets should be "verifiable and enforceable."

VULNERABILITY ANALYSIS

The Guidance also introduces a new analytic step: the "vulnerability analysis." Vulnerability, as described by Ecology, is a type of cumulative impact requiring an evaluation separate from the project's estimated emissions. The vulnerability analysis examines how the project may be affected by climate change and the potential environmental impacts that could result from this vulnerability. For example, a proposed development in a coastal area may be vulnerable to rising sea levels, which, in turn, could lead to land and water contamination from flooding of the project vicinity (by oils, fertilizers, septic systems, etc.). The vulnerability analysis may be most appropriate for long-term projects located in areas with the greatest vulnerability to the impacts of climate change.

MAKING THE THRESHOLD DETERMINATION

Under RCW 43.21C.031, if a proposal that is not categorically exempt is determined to have a "probable significant, adverse environmental impact," the agency must develop an EIS. "Significant," as defined by WAC 197-11-794, means having "a reasonable likelihood of more than a moderate adverse impact on environmental quality." Thus, if a lead agency determines that the incremental addition of GHG emissions from a proposal is significant, the proponent must either mitigate the emissions to a level of nonsignificance or prepare an EIS.

The Guidance does not propose a specific significance threshold for greenhouse gases, i.e., an emission level below which project emissions would be presumed nonsignificant and above which emissions would be presumed significant. Instead, Ecology "welcomes further discussion on the issue" and suggests that lead agencies could develop their own standard significance thresholds. For agencies interested in developing their own thresholds, Ecology notes as potentially helpful references the Council on Environmental Quality's ("CEQ") draft guidance on GHG analysis under the National Environmental Policy Act ("NEPA") and the recommended thresholds set by other states' agencies. The Guidance implies that a threshold of 10,000 metric tons might be appropriate, as it is the threshold for mandatory GHG reporting under RCW 70.94.151(5)(c).

PRACTICAL TIPS

Ecology recognizes that the Guidance is a work in progress and that it will be supplemented with additional guidance by the end of 2010. In the meantime, state and local lead agencies may look to the Guidance when conducting SEPA reviews. Debate will likely continue regarding many complex and undefined standards or steps outlined in the Guidance, such as determining whether a project's GHG emissions are "significant" under SEPA, selecting and applying methodologies for analyzing GHG emissions, and addressing cumulative impacts.

Comments on the draft Guidance are due June 25, 2010.

Whether preparing comments for Ecology, putting together an EIS for a current proposal, or simply getting ready for implementation of the Guidance, persons with projects on the horizon should consider how the Guidance would apply to and affect their project.

1. Know the context of your project. It is important to know the GHG emissions context for your project, including its place within the framework of other relevant federal, state, regional and local laws and regulatory proposals, e.g., the CEQ's NEPA guidance, the EPA's GHG Endangerment Finding , and the Securities and Exchange Commission's guidance on disclosure of climate change risks. Consider also the GHG inventories to which your project would contribute.

2. Quantify your project's GHG emissions and consider its significance. Determine a methodology for assessing your project's GHG emission impacts (e.g., energy and water consumption; transportation impacts of vehicle miles traveled) using the best existing data. Consider how its emission level fits within benchmarks for "significance" that have been identified by the CEQ and agencies in other states.

3. Evaluate alternatives that would meet project goals but also reduce GHG emissions. Look at design, siting and operational alternatives. If another alternative has less GHG emissions, carefully explain other factors that might affect its suitability for the project's purpose and need.

4. Examine your project's GHG emission mitigation and/or offset opportunities. Identify mitigation measures, looking at both project design and operational changes. Look at the potential for compensatory mitigation, e.g., carbon sequestration or carbon credit purchases. Develop mitigation plans.

5. For those with projects currently undergoing SEPA review, talk with the lead agency about the applicability of the Guidance. Ecology emphasizes that the Guidance is not mandatory and does not serve as a legal standard for compliance with SEPA. Nevertheless, it also recognizes existing authority under SEPA to examine the impacts of a project's GHG emissions on global climate change. As Ecology continues to consider improvements and revisions to the Guidance, lead agencies and applicants should work to address questions that remain. If an agency imposes mitigation conditions in reliance on the Guidance, a project proponent should consider whether such mitigation is appropriate under broader SEPA requirements.

6. For those with projects subject to both SEPA and NEPA review, consider consistency with the CEQ's draft guidance. Evaluate whether GHG assessments and proposed mitigation measures would satisfy both NEPA and SEPA requirements. It is not clear whether following the CEQ's NEPA draft guidance would be sufficient to satisfy SEPA requirements as described in the Guidance.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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