Sato, Ayako

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Sustainable Development Law & PolicyVolume 7Issue 2 Winter 2007: Climate Law Reporter 2007 Article 6NEPA and Climate Change: Much NeededGuidance for Transboundary EnvironmentalImpactsAyako SatoFollow this and additional works at: http://digitalcommons.wcl.american.edu/sdlpPart of the Environmental Law Commons, and the Litigation CommonsThis Feature is brought to you for free and open access by the Washington College of Law Journals & Law Reviews at Digital Commons @ AmericanUniversity Washington College of Law. It has been accepted for inclusion in Sustainable Development Law & Policy by an authorized administrator ofDigital Commons @ American University Washington College of Law. For more information, please contact fbrown@wcl.american.edu.Recommended CitationSato, Ayako. “Nepa and Climate Change: Much Needed Guidance For Transboundary Environmental Impacts.” SustainableDevelopment Law & Policy, Winter 2007, 16, 77.16WINTER 2007The recent Supreme Court case Massachusetts v. U.S.Environmental Protection Agency1 captivated those whofollow the climate change debate. However, litigationregarding global climate change is not a recent trend, and law-suits on this topic are on the rise.2 One statute that has surfacedconsistently in climate change litigation is the National Environ-mental Policy Act (“NEPA”).3NEPA requires all federal agencies to prepare a detailedstatement, or what is called an Environmental Impact Statement(“EIS”), for “major Federal actions significantly affecting thequality of the human environment. . .”4 An EIS requires a federalagency to include the environmental impacts of the proposedaction and to offer alternatives to the proposed action, includinga “no action” alternative.5 While NEPA is one of the oldest envi-ronmental statutes in the United States, the issue of greenhousegas (“GHG”) emissions reveals that clearer guidance is neededunder NEPA regarding the regulation of transboundary impacts. For example, in Friends of the Earth v. Mosbacher6 theUnited States District Court for the Northern District of Califor-nia held that plaintiffs had standing to sue the Overseas PrivateInvestment Corporation (“OPIC”) and the Export-Import Bankof the United States (“Ex-Im”) when they failed to undertake anenvironmental review of their actions pursuant to NEPA.7 OPICand Ex-Im, both U.S. federal government corporations, offerinsurance, loan guarantees, and financing support for projects indeveloping nations that emit large amounts of GHGs.8 Theplaintiffs allege that the impacts of these foreign projects can befelt domestically within the United States because such projectscontribute to GHG emissions that “increase the incidence andintensity of floods and droughts, raise sea levels enough to inun-date up to 7,000 square miles of U.S. coastline,” and contributeto other domestic environmental problems.9 Because suchimpacts directly affect the United States, the plaintiffs argue thatOPIC and Ex-Im were required to comply with NEPA.This case is currently under appeal and a lingering questionremains — does NEPA apply in an extraterritorial context? Typ-ically, a presumption against extraterritoriality exists when U.S.statutes are applied abroad, mostly out of concern for foreignpolicy implications and national security, and this presumptionapplies equally to NEPA. Out of such concern, Executive Order12,114 was written to generally exclude projects from NEPAreview that have “significant effects on the environment outsidethe geographical borders of the United States and its territoriesand possessions. . .”10 The projects funded by OPIC and Ex-Imtake place on foreign soil; however, the effects that plaintiffsallege can be felt within the United States. Therefore, it isunclear whether Executive Order 12,114 would apply to theOPIC and Ex-Im projects or whether the agencies have to com-ply with NEPA.Projects that have extraterritorial impacts are treated differ-ently, and such impacts generally fall into two categories: (1)proposed actions that take place within the United States, but theenvironmental impacts are felt in other countries; or (2) pro-posed actions that are conducted outside the United States andthe environmental impacts are typically felt outside of theUnited States. For the former, the White House Council on Envi-ronmental Quality (“CEQ”)11 has issued a memorandum12 thatprovides guidance to federal agencies that is consistent with theConvention on Environmental Impact Assessment in a Trans-boundary Context and the North American Free Trade Agree-ment. For the latter, President Jimmy Carter issued ExecutiveOrder 12,114 in 1979, which provides special procedures forconducting an environmental review for major federal actionssignificantly affecting the environment outside of the jurisdic-tion of the United States.13 In addition, the CEQ has supple-mented the Executive Order with guidance regardingenvironmental effects abroad.14What is missing, however, is any guidance on federalactions that take place abroad but have domestic impacts.15 Envi-ronmental Defense Fund v. Massey,16 the leading case regardingNEPA and extraterritoriality, is equally of no assistance becausein that case, the federal action took place in Antarctica, which isnot a sovereign nation and does not have the same kind foreignpolicy implications. As the world is becoming smaller andsmaller, and environmental impacts can span across the globe,the time has come for clearer guidance in the area of transbound-ary impacts and NEPA.Endnotes:1 Massachusetts v. EPA, 415 F.3d 50 (D.C. Cir. 2005), cert. granted 126 S. Ct.2960 (2006).2 See generally ROBERT MELTZ, CONG. RESEARCH SERV., GLOBAL WARMING: THELITIGATION HEATS UP (Apr. 3, 2006), available at http://ncseonline.org/NLE/CRs/abstract.cfm?NLEid=173 (last visited Feb. 6, 2007).3 See MELTZ, id.4 42 U.S.C. § 4332(C) (2000).5 40 C.F.R. § 1502.14 (2005).6 The case was originally captioned Friends of the Earth v. Watson, 2005 WL2035596 (N.D. Cal. Aug. 23, 2005), but was changed because of OPIC staffchanges. NEPA AND CLIMATE CHANGE: MUCH NEEDED GUIDANCE FOR TRANSBOUNDARY ENVIRONMENTAL IMPACTSby Ayako Sato** Ayako Sato is a JD candidate, May 2007, at American University WashingtonCollege of Law.Endnotes: NEPA and Climate Change continued on page 7777 SUSTAINABLE DEVELOPMENT LAW & POLICYSee generally, CLIMATE CHANGE 1995: THE SCIENCE OF CLIMATE CHANGE: CONTRIBUTION OF WORKING GROUP I TO THE SECOND ASSESSMENT OF THE INTER-GOVERNMENTAL PANEL ON CLIMATE CHANGE (J.T. Houghton, et al., eds., Cam-bridge University Press 1995).16 See UNFCCC, Report of the Conference of the Parties on its First Session,FCCC/CP/1995/7/Add.1 (June 6, 1995), available at http://unfccc.int/resource/docs/cop1/07a01.pdf (last visited Feb. 11, 2007). 17 143 Cong. Rec. S8138-39 (daily ed. July 25, 1997). 18 ANALYSIS OF THE KYOTO PROTOCOL, U.S. GLOBAL CLIMATE CHANGE POLICYBOOK (2002), available at http://www.whitehouse.gov/news/releases/2002/02/climatechange.html (last visited Feb. 10, 2007).19 See Kyoto Protocol, supra note 2, at Annex A.20 See INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE, CLIMATE CHANGE2001: THE SCIENTIFIC BASIS 6.1.2 (2001). 21 Kyoto Protocol, supra note 2, at art. 3.8.22 Kyoto Protocol, supra note 2, at art. 3.5.23 See e.g., David M. Driesen, Free Lunch or Cheap Fix?: The Emissions Trad-ing Idea and the Climate Change Convention, 26 B.C. ENVTL. AFF. L. REV. 1,60-61 (1998).24 Council Decision 2002/358/EC of 25 April 2002 concerning the approval, onbehalf of the European Community, of the Kyoto Protocol to the United NationsFramework Convention on Climate Change and the joint fulfilment of commit-ments thereunder OJ L 130, 15.5.2002 P. 0001-0003.25 Kyoto Protocol, supra note 2, at art. 3.3.26 United Nations Framework on Climate Change, Oct. 29–Nov. 10, 2001,Report of the Conference of the Parties on its Seventh Session, FCCC/CP/2001/13/Add.2 (Jan. 21, 2002), para. 16, available at http://unfccc.int/resource/docs/cop7/13a02.pdf (last visited Feb. 11, 2007).27 Philippe Ambrosi & Karen Capoor, State and Trends of the Carbon Market2006 1, Oct. 2006, available at http://www.ieta.org/ieta/www/pages/getfile.php?docID=1667 (last visited Feb. 15, 2007) .28 Kyoto Protocol, supra note 2, at art. 12.5(c).29 Kyoto Protocol, supra note 2, at art. 12.5(a). 30 Kyoto Protocol, supra note 2, at art. 12.2.31 See generally Decision 25/CMP.1, FCCC/KP/CMP/2005/8/Add.3.32 Summary of the Eleventh Conference of the Parties to the United NationsFramework Convention on Climate Change the First Conference of the PartiesServing as the Meeting of Parties to the Kyoto Protocol, Nov. 28–Dec. 102005,” EARTH NEGOTIATIONS BULL., Dec. 12, 2005, at 14.33 See, e.g., Robert Stavins, Can an Effective Global Climate Treaty be Basedon Sound Science, Rational Economics, and Pragmatic Politics? (Resources forthe Future, Discussion Paper 04-28, May 2004), available at www.rff.org/Documents/RFF-DP-04-28.pdf (last visited Feb. 11, 2007).34 See Daniel Bodansky, International Climate Efforts Beyond 2012: A Surveyof Approaches (Pew Center on Global Climate Change, Dec. 2004) available at http://www.pewclimate.org/docUploads/2012%20new%2Epdf (last visitedFeb. 15, 2007).35 Ambrosi & Capoor, supra note 27, at 1.7 See Friends of the Earth, 2005 WL 2035596, at *1.8 See Friends of the Earth, 2005 WL 2035596, at *3 (finding that plaintiffs pre-sented evidence that OPIC and Ex-Im are directly or indirectly responsible forapproximately 1,911 million tons of carbon dioxide and methane emissionsannually, which accounts for almost eight percent of the world’s emissions).9 Pl.’s Mot. for Summ. J., Friends of the Earth v. Mosbacher, 2005 WL3971170 (N.D. Cal. filed Dec. 23, 2005). 10 Exec. Order No. 12,114 (Jan. 4, 1979).11 Congress established the Council on Environmental Quality through NEPA § 202. The CEQ has the power to issue regulations implementing NEPA, andcourt give deference to CEQ’s interpretation of the statute. See Edward A. Bol-ing, Back to the Future with the National Environmental Policy Act: History,Purposes and Current Direction of NEPA, SL063 ALI-ABA 217, 223 (Feb.8–10, 2006).ENDNOTES: NEPA AND CLIMATE CHANGEcontinued from page 1612 Memorandum to the Heads of Agencies on the Application of NEPA to Pro-posed Federal Actions in the U.S. with Transboundary Effects (July 1, 1997).13 More specifically, major federal actions include those that: (1) significantlyaffect the environment of the global commons outside the jurisdiction of anynation; (2) significantly affect the environment of a foreign nation not partici-pating with the United States or otherwise involved in the action; (3) provide aforeign nation with a product, emission, or effluent prohibited or strictly regu-lated by federal law in the United States because its toxic effects create a seri-ous public health risk; and (4) significantly affect natural or ecological resourcesof global importance designated for protection by the President or Secretary.14 Memorandum for Heads of Agencies with International Activities: Imple-mentation of Executive Order 12,114 (Mar. 21, 1979).15 See generally Dinah Bear, Some Modest Suggestions for Improving Imple-mentation of the National Environmental Policy Act, 43 NAT. RESOURCES J. 931,949-955 (2003).16 Envtl. Def. Fund v. Massey, 986 F.2d 528 (D.C. Cir. 1993).1 REN21, Renewables: Global Status Report 2006 Update, available athttp://www.ren21.net/globalstatusreport/download/RE_GSR_2006_Update.pdf(last visited Feb. 10, 2007).2 New RE includes solar, wind, biomass, geothermal, and small hydropowerless than 10 MW. The World Bank Group’s commitments for new renewableenergy alone were $221 million in fiscal year 2006.3 The World Bank Group, Energy and Mining Sector Board, Improving Lives:World Bank Group Progress on Renewable Energy and Energy Efficiency inFiscal Year 2006 (Dec. 2006), available at http://siteresources.worldbank.org/EXTENERGY/Resources/336805-1157034157861/Improving_Lives_Low_Res.pdf? (last visited Feb. 11, 2007).4 Wolfgang Mostert, Nicaragua: Policy and Strategy for the Promotion ofRenewable Energy Resources, The World Bank Group, Energy Sector Manage-ment Assistance Programme (Jan. 2006), available at http://wbln0018.world-bank.org/esmap/site.nsf/files/Nicaragua+WindEnergy+Integration.pdf/$FILE/Nicaragua+WindEnergy+Integration.pdf (last visited Feb. 11, 2007). 5 International Grid-Connected Renewable Energy Policy Forum, Feb. 1–2,2006, Proceedings of the International Grid-Connected Renewable Energy Policy Forum (May 2006), available at http://www.gridre.org/images/Grid_Proceedings_Final_May_3.pdf (last visited Feb. 11, 2006) [hereinafter Proceedings].6 Proceedings, id.7 Proceedings, id.8 The World Bank Group, Renewable Energy Toolkit Website, www.worldbank.org/retoolkit (last visited Feb. 11, 2007) [hereinafter Toolkit].9 KILIAN REICHE ET AL., ENERGY MINING BOARD SECTOR BOARD, PROMOTINGELECTRIFICATION: REGULATORY PRINCIPLES AND A MODEL LAW (July 2006),available at http://siteresources.worldbank.org/INTENERGY/Resources/EnergyPaper18.pdf (last visited Feb. 9, 2006).10 Toolkit, supra note 8.11 Douglas Barnes, Meeting the Challenge of Rural Electrification in Develop-ing Nations: The Experience of Successful Programs, the World Bank Group(Apr. 2005), available at http://wbln0018.worldbank.org/esmap/site.nsf/pages/7-26-05_KES (last visited Feb. 11, 2007).12 Toolkit, supra note 8.13 O. Gavaldà et al., Tariff Structures: A “Universal” PV-Based Rural Electrifi-cation Scheme (Oct. 2001), available at www.worldbank.org/retoolkit, (select“Project Tools” link, select “Economic and Financial Analysis” link, select article under “Mini-Grid”) (last visited Feb. 11, 2007).14 Toolkit, supra note 8.ENDNOTES: LEGAL AND POLICY FRAMEWORKScontinued from page 20

NEPA and Climate Change: Much Needed Guidance for Transboundary Environmental Impacts

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NEPA and Climate Change: Much Needed Guidance for Transboundary Environmental Impacts

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