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Inside the 'Climate Test'

May 3, 2022
Jan Hasselman Senior Attorney

Challenging the suspect math that lets fossil-fuel companies off the hook for locking in greenhouse gas emissions

Before a new power plant can be built, a new pipeline constructed, or a new lease granted to an oil company to drill, fossil-fuel developers must apply for federal permits. These permitting decisions carry significant climate implications that need to be fully considered and disclosed under federal law. Even so, permits are usually granted, despite policy commitments to reduce greenhouse gasses. This is something I’ve given a lot of thought to lately, and I believe the government’s system for calculating the climate implications of proposed fossil fuel projects needs an overhaul.

Let’s say a friend told you they were going to start a new weight-loss plan, a plan that involved eating pizza for every meal. But since they could imagine someone else eating pizza and ice cream every meal, their method of counting calories was to compare their total calorie intake to that of the hypothetical person. Using this comparative approach, they wouldn’t be consuming any calories at all; it was as if their pizza contained negative calories.

The example may seem ridiculous, but it highlights the trend we’ve seen in federal and state environmental reviews of big fossil fuel projects. The agencies will compare the greenhouse gas emissions of a project — say, a new liquefied natural gas terminal — to a hypothetical scenario in which the terminal isn’t built but an even dirtier fossil fuel source is used instead. Using this comparison leads to a conclusion that the new project would actually reduce greenhouse gas emissions — even though it would lock in decades of new emissions at a time when we desperately need to cut them. In our case against the Tacoma LNG terminal, a state hearings board endorsed precisely this counterintuitive outcome. (That case is currently on appeal.)

Calculating the long-term climate impact of new fossil investments is surprisingly tricky. Recent court decisions have struck down reviews for major oil and gas leasing projects where judges concluded that the government underestimated climate impacts. But agencies are struggling to articulate a coherent standard.

To unpack this problem, I joined forces with one of the most experienced experts in this area. Peter Erickson is a senior scientist with the Stockholm Environment Institute — the sort of expert whom the IPCC cites over a dozen times in their new report on reducing emissions, and federal judges cite when tossing out inadequate environmental reviews. Together, we co-authored a paper that applies both legal and scientific expertise to the challenge of counting greenhouse gas emissions from new fossil projects.

The science could not be clearer: if we are going to avoid climate catastrophe, the production and use of fossil fuels must be phased out, starting immediately. In fact, there is already enough carbon in existing development to overshoot the climate goal of limiting a global average temperature increase below 1.5 degrees Celsius — without adding any new infrastructure or production. And under the Biden administration, the U.S. has made a global commitment to slash greenhouse gas emissions by about half by 2030, with a goal of reaching net zero by 2050. Many other countries have made similar pledges. And the adoption of low- and zero-carbon alternatives is now moving faster than anyone ever dreamed a few years ago.

Dismissing the emissions from new fossil infrastructure and production decisions on the theory that someone else would supply it if we don’t, pretends as if these commitments and technological advancements don’t exist. It also ignores the reality that these decisions lock in billions of dollars of investments into fossil fuels for decades — when conversations should be taking place about retiring existing fossil-fuel facilities.

In our paper, Pete and I propose an alternative framework: a “Climate Test” for new fossil infrastructure. It goes like this:

  • First, agencies should tally up all the lifecycle greenhouse gas emissions of the fuel involved, without trying to speculate what will happen without the project. Let that number — the millions of tons of new carbon dioxide or methane that would be released — be the bottom line.
  • Second, agencies should explain how this project is consistent with our policy commitments, like the Paris Agreement, to drastically reduce carbon.
  • Finally, agencies should assess the “lock-in” risk of the new fossil investment. Will it spur additional investments that make it even harder to decarbonize? Will the project have to be decommissioned before the end of its lifetime and if so, who will pay?

As the latest Intergovernmental Panel on Climate Change report highlighted, the stakes could not be higher. It’s time for agencies to abandon their counterintuitive method for analyzing the climate impacts of fossil-fuel proposals, and shift to one that aligns with international climate commitments and the urgent warnings from the scientific community. If new fossil-fuel projects can’t pass the Climate Test, they shouldn’t get permits.

An offshore production oil rig.

An offshore production oil rig.

Land By Sea / Getty Images