New Climate Change/GHG Emission Evaluation Requirements for NEPA and SEC Filings

The SEC and CEQ have recently issued Interpretive Guidance and Draft Guidance, respectively, pertaining to climate impact.  The NEPA draft guidance (Feb.18, 2010) would require consideration if a proposed action is reasonably anticipated to cause direct annual emissions of 25,000 tons of CO2 equivalent GHG.  This threshold happens to match up to EPA's  recently issued GHG reporting rule.  Nevertheless, the Guidance makes clear that 25,000 tons is not intended to be a presumptive criterion for determining significant environmental impact.  It is literally, a way to assure that substantial GHG emissions are considered when determining whether a full EIS is appropriate. 

The SEC interpretive guidance, at 75 Fed. Reg. 6290 (Feb.8, 2010) is not legally binding but will be applied by SEC as if it were.  The guidance is not a model of specificity; however it essentially requires disclosure of potentially material impacts of both climate change legislation and climate change itself. It also covers both corporate operations and the materials used by such operations.  An energy company producing electricity or liquid fuels would be an obvious potentially covered party; but one could also be covered if the price of an agricultural commodity will be affected by climate change, or if the price of fuel will increase due to federal legislation. 

SEC Pronouncement on Climate Change Impact Disclosure

See 75 Fed. Reg. 6290 (Feb. 8, 2010) for SEC's new pronouncement on climate change impact disclosure requirements.  Sections III and IV of this Interpretive Release guidance constitute an update to Financial Reporting Release No. 1 (April 15, 1982).  Disclosure expectations go beyond potential pollution control requirements, and include potential material effects of pending legislation and regulations on supply costs and demand for produced goods.