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Ninth Circuit Finds Federal Agencies Must Evaluate Impacts Of Their Actions On Climate Change

By: Paul S. Weiland

On November 15, the United States Court of Appeals for the Ninth Circuit rejected the fuel economy standard for sport utility vehicles, minivans, and pickup trucks established by the National Highway Traffic Safety Administration (NHTSA) because, among other things, of the failure of the agency to assign any benefit to reduction of carbon dioxide emissions in its cost-benefit analysis.  Center for Biological Diversity v. Nat'l Highway Traffic Safety Administration, No. 06-71891 (9th Cir. Nov. 15, 2007).  The court also held that the Environmental Assessment prepared by the agency was inadequate to comply with the National Environmental Policy Act (NEPA) and that the agency must instead prepare a full Environmental Impact Statement.  The case may be expected to have widespread implications to the extent it stands for the proposition that federal agencies must account for greenhouse gas emissions, such as carbon dioxide emissions, during the regulatory process.


Under the Energy Policy and Conservation Act (EPCA), the NHTSA is required to promulgate a rule that establishes an average fuel economy standard (referred to as a CAFE standard) for non-passenger automobiles or "light trucks."  These light trucks include many SUVs, minivans, and pick-up trucks.  In a final rule issued on April 6, 2006, the NHTSA set the CAFE standard for light trucks model years 2008-2011 at a lower level than the standard for passenger automobiles.  EPCA requires NHTSA to set fuel economy standards at the "maximum feasible" average level that manufacturers can achieve in a model year.  When deciding the maximum feasible average fuel economy, NHTSA must consider technological feasibility, economic practicability, effect of other motor vehicle standards on fuel economy, and the need of the United States to conserve energy.  49 U.S.C. § 32902(f).


NHTSA used a cost-benefit analysis to determine the maximum feasible fuel economy standard, and in doing so it assigned no value to the reduction in carbon emissions that would result from stricter CAFE standards.  NHTSA justified this action by arguing that "the value of reducing emissions of CO2 and other greenhouse gases [is] too uncertain to support their explicit valuation and inclusion among the savings in environmental externalities from reducing gasoline production and use."  Slip Op. at 14874.  The court rejected this approach finding that NHTSA's decision not to monetize the benefit of carbon emissions reduction was arbitrary and capricious.  Slip Op. at 14883.


In conjunction with the promulgation of the rule, NHTSA prepared an Environmental Assessment to comply with NEPA.  The court concluded that the Environmental Assessment NHTSA prepared failed to analyze the cumulative effect of carbon dioxide emissions on climate change.  The court held that "[t]he impact of greenhouse gas emissions on climate change is precisely the kind of cumulative impacts analysis that NEPA requires agencies to conduct."  Slip Op. at 14909.  Furthermore, the court found persuasive the evidence Petitioners presented regarding the cumulative impacts of climate change, including a report from the Intergovernmental Panel on Climate Change that found climate change could "increase the risk of abrupt and non-linear changes in many ecosystems, which would affect their function, biodiversity, and productivity" and that such changes could result in the abrupt breakdown of terrestrial and marine ecosystems with an increased risk of extinction as well as increases in water temperatures leading to death of some corals.  Petitioners also presented a report published by the Center for Health and Global Environment at Harvard Medical School which found that climate change will affect the health of humans.  Id. at 14917-14919.  The court held that the evidence in the record "raises a substantial question as to whether the rule may have a significant impact on the environment."  Id. at 14916.  For this reason, the court held that preparation of an Environmental Assessment was not sufficient to fulfill the requirements of NEPA. 


This decision builds upon the Supreme Court's decision earlier this year in Massachusetts v. EPA and demonstrates that the federal judiciary recognizes climate change as a legitimate environmental problem that cannot be ignored by federal agencies.  To view a copy of the decision, please click here.

Paul Weiland counsels clients regarding environmental and land use matters and litigates such matters in trial and appellate courts under a variety of statutes, including the Endangered Species Act and National Environmental Policy Act.  He is lead counsel for the Agua Caliente Band of Cahuilla Indians in Agua Caliente v. Kempthorne.  He can be reached at (949) 833-7800 or

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