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What is the Climate Test? How Can We Use It to Stop the Next Mega Fossil Fuel Project?

Fossil fuel projects have no place in our clean energy transition. The climate test is a critical tool the federal government needs to make sure new energy projects align with our climate goals.

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Freedom from Fossil Fuels Executive Branch

Tuesday, April 25, 2023

Yellow petroleum pipeline warning sign in front of graffiti

To avoid the worst impacts of climate change, we need a transformational build-out of clean energy infrastructure across our nation. At the same time, we need to rapidly transition away from dirty fossil fuels and stop giving precious public resources away to one of the most rapacious and damaging industries on earth—Big Oil.

For the Biden administration, which is committed to the “whole-of-government” approach to tackling the climate crisis, this lays out a clear policy north star. When the federal government reviews major potential energy infrastructure projects, they should only approve projects that guide us toward a climate-safe future. And they should reject those that are incompatible with the greenhouse gas pollution reductions needed to avert the worst impacts of the climate crisis.

But as we’ve seen with the recent Willow Project and Alaska LNG Project approvals, federal agencies continue to approve new mega-polluting fossil fuel infrastructure, despite warnings from scientists that we cannot afford to build new fossil fuel infrastructure if we want to stand a chance of limiting warming to 1.5 Celsius (or 2.7 degrees Fahrenheit).

Here’s the good news: the Biden Administration can give federal agencies a tool that would help them choose climate-smart projects over fossil fuel infrastructure. It’s called the climate test.

Let’s break it down: what’s a “climate test”?

A climate test is a regulatory tool that would allow federal agencies to assess, disclose, and contextualize greenhouse gas pollution when evaluating major proposed energy infrastructure projects, including fossil fuel infrastructure. It would do this by asking whether the lifecycle greenhouse gas pollution from the project is consistent with the constraints of a 1.5 degree Celsius climate future. Crucially, the test would be objective, quantitative, consistent, and science-based. Moreover, it puts that information in the hands of decision-makers, who will then have greater justification to block future polluting infrastructure that doesn’t pass this evaluation.

Think of the climate test as an additional opportunity for assessment—just like you would do before diving into a new relationship. Say, you’re looking at someone’s dating profile, it’s probably a good idea to identify glaring incompatibilities before going on that first date. Similarly, why wouldn’t the government take the time to look for similar red flags before swiping right on the next major energy infrastructure project? At its core, that’s what this climate test would do: it would generate a clear red or green flag for federal agencies to determine a proposed project’s compatibility with a climate-safe future (i.e., one that keeps global temperature rise below a 1.5 degrees Celsius increase). If new fossil fuel projects can’t pass the climate test, then federal agencies shouldn’t be approving them. It’s as simple as that.

Power sector policy lead Charles Harper saying

As the most recent Intergovernmental Panel on Climate Change report highlighted, the stakes could not be higher. The federal government cannot continue with business-as-usual methods to assess fossil fuel proposals. It’s time for agencies to make a clear determination of what proposed major energy infrastructure projects are in line with a 1.5 degrees Celsius compatible future—and what’s a glaring red flag for the climate.

The climate test seems like a no-brainer. How do we implement a version of it in practice?

When President Biden first assumed office, he issued an executive order that directed the Council on Environmental Quality (CEQ) to take steps to ensure that federal infrastructure investment reduced climate pollution. This executive order also required that federal permitting decisions consider the effects of greenhouse gas pollution and climate change.

CEQ is the federal body tasked with implementing the National Environmental Policy Act (NEPA). NEPA is one of our country’s bedrock environmental laws designed to empower communities to protect themselves and their environment from potentially harmful or dangerous federal projects. Under NEPA, federal agencies are required to perform an environmental review for proposed major federal actions, including massive fossil fuel projects.

Back in January, CEQ released interim guidance that recommended federal agencies more accurately disclose and contextualize greenhouse gas pollution and climate change risks when evaluating major federal actions during NEPA environmental reviews.

This interim guidance contained vital provisions. For example, CEQ urged federal agencies to explain how a proposed action with “relatively large” greenhouse gas emissions would help meet or detract from achieving our domestic climate goals and international commitments. But the guidance didn’t specifically outline a climate test that would help agencies assess the compatibility of a project’s lifecycle greenhouse gas pollution with a 1.5 degrees Celsius climate future. And it also didn’t offer principles or a methodology on how to conduct such a climate test.

CEQ chair Brenda Mallory speaking at a podium in front of two U.S. flags. — CEQ Chair Brenda Mallory speaks about environmental justice at the White House Fusion Summit in March 2022.

When CEQ’s public comment period closed last month, thousands of Evergreen action-takers submitted comments urging CEQ to include a version of the climate test that specifically measures against the 1.5 degrees Celsius compatible pathway. Now, as CEQ finalizes its guidance, it must push federal agencies to use a robust climate test that evaluates a proposed major energy infrastructure project’s compatibility with a 1.5 degrees Celsius future.

Beyond federal agencies, states have a role to play in advancing state-based climate tests in their own environmental review processes, separate and not contingent upon the CEQ guidelines. With the time ripe for federal agencies and states to revise their environmental review processes to meet the demands of the climate crisis, Evergreen Action has put forward three key principles for devising a climate test tool.

Three key principles for a robust, equitable climate test tool:

1. Lifetime, lifecycle greenhouse pollution

A climate test tool should make a clear determination about whether or not the lifetime, lifecycle greenhouse pollution from a major proposed energy infrastructure project is consistent with the remaining global carbon budget for 1.5 degrees Celsius. Anchoring a climate test tool in 1.5 degrees Celsius is both politically salient and scientifically necessary. The IPCC finds that 1.5 degrees Celsius is the scientifically agreed-upon indicator of the point where climate impacts will become increasingly harmful to people and the planet. And on a political level, the U.S. is committed to pursuing efforts to limit the temperature increase to 1.5 degrees Celsius under the Paris Agreement.

2. Equity

A climate test tool should take equity seriously. Where possible, the climate test should take into account a fair shares approach to calculating the U.S. allocation of the remaining global carbon budget. Under the United Nations Framework on Climate Change Convention, the U.S. is committed to the principle of “common but differentiated responsibilities and respective capabilities,” which asserts that countries should respond to climate change in the context of their specific national circumstance. As a high-income, developed country that has been a historically high-emitter, the U.S. has a responsibility to wind down fossil fuel production even faster than global average decline rates consistent with 1.5 degrees Celsius. It’s also worth noting that any climate test, whether at the state or federal level, would be a supplemental part of a larger environmental review process and would therefore not—and should not—circumvent other vital environmental justice considerations.

3. Global energy supply and demand

Finally, a climate test tool should assess the significance of the proposed project’s greenhouse gas pollution in the context of global energy supply and demand, and in such a way that is consistent with the best available climate scenario modeling showing a global energy transition away from fossil fuels and pathways to net-zero by 2050. In other words, as we look to meet global energy demands, we must also meet that demand with clean energy over fossil fuels.

A strong climate test tool that implements these key principles will mean that federal agencies will be held to a consistently high standard, while also keeping us on track to meet our internationally and nationally agreed-upon climate goals. It will mean the difference between the status quo or a future where the Biden administration—and future administrations—are better equipped and empowered to reject harmful fossil fuel projects. The energy infrastructure we build should support our climate goals, not undermine them—and a strong climate test would help do just that.