By Tim Dowling
"NHTSA can't have it both ways," the Ninth Circuit insisted in yesterday's blockbuster CAFE ruling. It can't argue both that (1) the federal energy laws are so inflexible as to prevent it from considering more stringent alternatives under the National Environmental Policy Act (NEPA); and (2) the energy laws are so flexible regarding NHTSA's balancing of the statutory factors that federal courts must defer to the agency's discretion. In untangling NHTSA's internal inconsistencies, the court ruled that NHTSA failed to meet its obligations under NEPA to prepare an adequate Environmental Assessment (EA) and an Environmental Impact Statement to address the potential impact of its new CAFE standards on global warming.
The NEPA portion of the opinion hasn't been getting as much press as the sexier issues in the case -- who could resist monetizing of the benefits of GHG reductions or the closing of the SUV loophole? -- but it might prove to be the significant sleeper issue in the case. The NEPA discussion comes at the end of a lengthy opinion, but it shouldn't be dismissed as a superfluous add-on. Because NEPA applies to every major federal agency action and requires a searching inquiry into the environmental impact of agency actions, it could shape federal efforts to reduce global warming across the board.
As a preliminary matter, the court made short work of NHTSA's attempt to rely on cases holding that NEPA doesn't apply where the agency has no authority to alter the action in question. In contrast to the federal agencies in those cases, which had no statutory authority to change the challenged agency action, the court held that NHTSA has clear statutory authority to set higher CAFE standards if its deliberations under NEPA so require.
More importantly, the court emphatically affirmed that NEPA requires NHTSA and every other federal agency to consider the CUMULATIVE impact of their proposed actions on global warming. The NEPA regs define cumulative impact as "the impact on the environment which results from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions" regardless of the agency or person taking those actions. In a tip of the hat to synergistic impact, the court stressed: "Sometimes the total impact from a set of actions may be greater than the sum of its parts."
Here, the court found NHTSA's analysis deficient because it only catalogued the total tonnage of CO2 emissions that would result from its proposal, without considering their impact in light of other agency actions such as other CAFE standards. Nor does it discuss the environmental impact of the emissions. This failure was especially significant because the new CAFE standards, while more stringent that the old standards, would not have decreased carbon emissions, but rather only reduced the rate of increase (because they would not have offset increases in the number of light trucks). In language that sets the NEPA standard for all future federal agency actions that implicate global warming, the court concluded: "NHTSA must provide the necessary contextual information about the cumulative and incremental environmental impacts of the Final Rule in light of other CAFE rulemakings and other past, present, and reasonably foreseeable future actions, regardless of what agency or person undertakes such other actions."
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The court then turned to NHTSA's obligation under NEPA to "rigorously explore and objectively evaluate all reasonable alternatives." NHTSA failed to meet this requirement because its consideration of alternatives was unreasonably narrow. Indeed, the alternatives NHTSA considered ranged from only 22.2-22.7 mpg for model year 2008, 22.2-23.3 mpg for model year 2009, and 22.2-23.6 mpg for model year 2010. NHTSA acknowledged that this range was "narrow and minimal" but argued that the energy laws left it with no discretion to consider more aggressive alternatives. The court would have none of it, invoking the Supreme Court's observation in Mass. v. EPA that energy conservation and environmental protection are not coextensive but often overlap.
Finally, the court held that NEPA requires NHTSA to go beyond the more streamlined Environmental Assessment that it prepared and instead produce a more thorough Environmental Impact Statement (EIS) because the petitioners demonstrated there are "substantial questions" whether the new CAFE standards might have a significant environmental impact. NHTSA argued it was "self-evident" that the projected .2 % decrease in carbon emissions was not significant, but the court expressed special concern about potential "tipping point" scenarios under which a relatively small increase GHG emissions could cause an abrupt, non-linear, irreversible change in the climate and the environment. Labeling NHTSA's justifications for failing to prepare an EIS as "vague and conclusory" and "devoid of meaningful analysis," the court ruled that just because the new rule might be an improvement over the status quo "does not necessarily mean it will not have a 'significant effect' on the environment." NHTSA ignored the question of whether a more stringent CAFE standard would avoid significant environmental harm.
Every federal lawyer with client agencies whose actions could affect global warming, and everyone else interested in how NEPA will shape the global warming debate, needs to read this opinion carefully.