CALIFORNIA, THE JUNGLE, AND CAP-AND-TRADE

Posted on September 21, 2018 by James Holtkamp

On September 14, 2018, the California Air Resources Board (CARB) issued for public comment the proposed California Tropical Forest Standard.  The proposed standard is not an attempt to address a future in which global warming has changed California’s redwood forests into tropical jungles; rather it is intended to allow reductions in carbon emissions from mitigation of rain forest deforestation in tropical countries to be linked with California’s cap-and-trade program. 

California is already well-known for its influence on culture, economics and politics outside its borders. Here in Utah we sometimes feel like we are really just a big county in eastern California.  Even outer space is not insulated from California.  As the Global Climate Action Summit wound down in San Francisco last week, Governor Brown announced that California would send its own satellite into orbit to track and monitor pollutants.  You can’t get more outside of California than that.

The proposed standard consists of detailed criteria for tropical forest credits and is accompanied by a 185-page draft environmental analysis prepared by CARB under the California Environmental Quality Act.  The proposal is issued under CARB’s cap-and-trade program rules, which authorize CARB to consider reductions originating in developing countries or “subnational jurisdictions” (e.g., provinces or states) within those countries.          

The proposed standard would require the jurisdiction seeking to link its emission reduction program with the California program to develop a “sector plan” demonstrating that the program was developed through a robust, transparent, and participatory process.  The sector plan would detail the legal, policy and program tools used to reduce emissions; procedures for monitoring, reporting and verification of reductions; and provisions to avoid double-counting of reductions with any other program.  The proposal also provides for establishing baseline emission levels, avoiding leakage, securing third-party verification, involving and protecting indigenous communities, and other elements designed to ensure that the reductions are robust and permanent.

The proposal does not include a mechanism for linking tropical forest credits to the California system; rather it is simply a proposal for standards for the credits which, after additional rulemaking by CARB, would be eligible for inclusion in the cap-and-trade program.  

Carbon emissions released from tropical forest deforestation and degradation account for about one-fifth of carbon emissions across the globe. The president and Congress have been unwilling to address the issue.  California has stepped into the breach.

Perhaps living in eastern California is not such a bad thing, after all.

We May Not Always Have Paris, But Perhaps We Can Do Better Than Paris

Posted on September 20, 2018 by Seth Jaffe

Last week, the Climate Leadership Council released an analysis demonstrating that the “Baker Shultz Carbon Dividends Plan” would result in greater reductions in greenhouse gas emissions than the US committed to attaining under the 2015 Paris agreement.  (And a shout out to ACOEL fellow Pam Giblin, who is a Senior Policy Advisor at the CLC.) 

I don’t doubt that the CLC analysis is right.  If I had to guess, I’d predict that they probably underestimate the reductions that would be reached with a robust carbon tax.

I understand the difficulty in convincing what passes for the GOP base at this point – and the GOP members of Congress – to endorse the carbon tax.  Oops, I meant dividend.  I’m hopeful that enough members will come around at some point.  My real worry is that the environmental movement will reject the plan because it calls for elimination of current regulations concerning carbon.

Years ago, Gina McCarthy used to say quite freely that the Obama administration would get most of its carbon reductions, not from direct regulation of GHG emissions, but instead from all of the other air regulations it was promulgating, such as the power plant MACT standards.

What environmentalists have to remember is that the reverse is also true – any robust program to reduce carbon emissions will also lower emissions of conventional pollutants.  Indeed, in defending the Clean Power Plan, environmentalists have made that very argument.  Why not acknowledge the same point in connection with a carbon tax and give up on a set of regulations that have always been clunky at best, are nowhere near as efficient a regulatory tool as a carbon tax, and which, as compared to a carbon tax, really benefit no one other than environmental lawyers and consultants?

God, wouldn’t it be a breath of fresh air to see Congress actually get something big done for the American people?  Let’s not screw this one up.

CAFO Odors and the Ghost of William Aldred

Posted on July 10, 2018 by Susan Cooke

The number and size of concentrated animal feeding operations (CAFOs) have increased in recent years.  These operations keep large numbers of animals in a confined space and provide them with feed from offsite sources prior to their slaughter.  While generally viewed as cost efficient, CAFOs raise concerns about animal welfare and about their environmental impacts and effect on the health and quality of life for those living or working nearby.  Such concerns include the foul odors associated with the substantial quantities of animal waste that are generated, especially where such waste is discharged into pits and then flushed into open air lagoons.  The sludge in those lagoons sinks to the bottom and is periodically removed for land application and the liquid waste remaining at the top is sprayed as fertilizer onto adjacent fields.

The anaerobic reaction that occurs during pit and lagoon storage of the waste over an extended time period is the primary generator of such odor, the primary constituents being ammonia and hydrogen sulfide.  Anaerobic digesters and other technologies can be employed to reduce odor generation, with some also producing gases for fuel.  However, the costs of installing and operating such equipment can be substantial, and there are no specific requirements at the federal level mandating odor control or limiting ammonia or hydrogen sulfide emissions from CAFO operations.  Indeed, even the reporting of animal waste air emissions under the federal Superfund law and under EPCRA (as interpreted by EPA) is precluded under the Fair Agricultural Reporting Method (FARM) Act signed into law by Congress in March 2018

While there is little regulation at the federal level, some states have imposed limits on hydrogen sulfide.  For example, California has a one hour average standard and Minnesota has a 30 minute standard for H2S.  In addition, a few states have instituted odor standards covering some CAFOs, including Colorado’s odor standard, which is based on an odor dilution factor, for swine CAFOs above a certain size (i.e., the odor must be eliminated by a specified amount of dilution).  While most local ordinances covering odors enjoin nuisances in general, some have adopted a dilution factor standard that is generally applicable, such as the ordinance adopted in Denver, Colorado and that adopted in South St. Paul, Minnesota.

Even where CAFOs are singled out for specific regulation by state, the dilution factor standard is not often used, probably because it is in essence subjective in nature and thus quite different from most environmental emission standards.  Instead, states have generally adopted a management plan approach coupled with registration and periodic inspections.  For example, the environmental regulations covering odor control at CAFOs in North Carolina, which has a number of swine CAFOs in the southeastern portion of the state, do not include a specific standard covering odor.  Instead, those regulations impose setback requirements and provide for state agency inspections, and they empower that agency to require preparation and modification of a best management plan if it determines that odor control is necessary.

Given the absence of a specific standard for judging CAFO emissions, some neighbors of CAFO operations have brought tort suits for nuisance to address odor concerns.  In one case decided this past April, a jury awarded $50 million in compensatory and punitive damages to 10 neighbors of a North Carolina hog farm.  The plaintiffs claimed that the truck noise associated with farm operations and the odor associated with lagoon storage of waste from its 4700 hogs and the spraying of lagoon liquid onto nearby fields created a nuisance.

Although the federal court reduced recovery to $3.25 million under punitive damage limits imposed under the North Carolina Right to Farm Law, agribusiness interests raised strong concerns about the damage award and within weeks the North Carolina legislature had passed amendments to the state Right to Farm Law to further restrict tort recovery for alleged nuisances from agricultural and forestry operations.  Although those amendments (in Senate Bill 711) were vetoed by Governor Roy Cooper on June 25, the veto was overridden by both houses before their month-end adjournment.

The amendments, which are similar to statutory language already enacted in Missouri for facilities engaged in crop and animal production, would limit compensation to property located within one half mile of the alleged source of a nuisance at an agricultural or forestry operation.  In addition, the suit would have to be filed within one year of the operation’s establishment or of a fundamental change (which wouldn’t include, among other things, a change in ownership or size) to that operation, with compensatory damages limited to a reduction in fair market value of the plaintiff’s property for a permanent nuisance and to diminution in fair rental value for a temporary nuisance.  While punitive damages are already capped at a specified multiple of compensatory damages, the amendments would limit them to instances where, during the previous three years, the operation had been the subject of a criminal conviction or civil enforcement action or of regulatory action taken by the state or federal government pursuant to a notice of violation.

Such limits on monetary recovery for nuisance may encourage plaintiffs to seek injunctive relief to abate odors from CAFO operations.  And tort suits for nuisance animal odors have a long history, as evidenced by William Aldred’s Case dating back to 1610 where the Court of King’s Bench held that Mr. Aldred, whose house was situated within 30 feet of a later constructed hog sty, had a right to obtain abatement of the foul odor emanating from that hog sty.

In recent years the injunction remedy in a nuisance action has sometimes been disfavored, as illustrated in the Boomer v. Atlantic Cement decision where monetary damages were awarded rather than injunctive relief for operation of a cement plant.  There the court weighed the (lower) cost of compensatory damages versus the (significantly higher) cost associated with installing abatement equipment or requiring plant shutdown.  However, it now appears that determining “entitlements” under an economic efficiency analysis, such as that described in the oft-cited Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, is undergoing more critical academic scrutiny.

Moreover, animal welfare advocates, as well as those concerned about environmental justice or greenhouse gas emissions, and perhaps even property rights advocates, may add their own voices in support of the injunctive remedy option for stopping or curtailing CAFO operations.  If so, then the right of a landowner to quiet (and unscented) enjoyment of his or her property through an injunction, as enunciated by the King’s Bench more than 400 years ago, may prove to be the most effective remedy for those seeking to curtail CAFO odor emissions.

Still No Judicial Remedy For Climate Change — Don’t Expect Advocates To Stop Trying

Posted on July 3, 2018 by Seth Jaffe

On June 25th, Judge William Alsup dismissed the public nuisance case brought by the City of Oakland and the State of California against five major oil companies.  The suit sought payment of damages into a fund to be used for necessary adaptation expenditures to deal with sea level rise.  

Why did he dismiss the case?  Simple.  The courts are not the right forum in which to address the problems of climate change.  The more complicated answer?  Because AEP v. Connecticut held that the Clean Air Act displaces federal common law claims for greenhouse gas emissions in the United States and because claims with respect to sales by the defendants outside of the United States could not be addressed by a U.S. court without violating the presumption against giving extraterritorial effect to U.S. laws.

Here, plaintiffs seek to impose liability on five companies for their production and sale of fossil fuels worldwide. These claims — through which plaintiffs request billions of dollars to abate the localized effects of an inherently global phenomenon — undoubtedly implicate the interests of countless governments, both foreign and domestic. The challenged conduct is, as far as the complaints allege, lawful in every nation. And, as the United States aptly notes, many foreign governments actively support the very activities targeted by plaintiffs’ claims. Nevertheless, plaintiffs would have a single judge or jury in California impose an abatement fund as a result of such overseas behavior. Because this relief would effectively allow plaintiffs to govern conduct and control energy policy on foreign soil, we must exercise great caution.

This order fully accepts the vast scientific consensus that the combustion of fossil fuels has materially increased atmospheric carbon dioxide levels, which in turn has increased the median temperature of the planet and accelerated sea level rise. But questions of how to appropriately balance these worldwide negatives against the worldwide positives of the energy itself, and of how to allocate the pluses and minuses among the nations of the world, demand the expertise of our environmental agencies, our diplomats, our Executive, and at least the Senate.  Nuisance suits in various United States judicial districts regarding conduct worldwide are far less likely to solve the problem and, indeed, could interfere with reaching a worldwide consensus.

I couldn’t have said it better myself.  I’ve always thought that these types of suits are not the way to address climate change.  I’ve recently acknowledged that, if the current administration continues to rely on fake news to formulate its position on climate change, courts at some point might conclude that the exigencies of the situation require them to act.  For now, we haven’t reached that point, and I hope we never do.

The Dutch Government Also Doesn’t Like Citizen Climate Litigation

Posted on July 3, 2018 by Seth Jaffe

As a follow-up to my earlier post about the dismissal of public nuisance claims brought by the City of Oakland and the State of California against five oil majors concerning their contribution to climate change, I note that ClimateWire (subscription required) is reporting that the Dutch government is appealing a court order that would require it to cut carbon emissions by 25 percent by 2030. 

The Dutch case is more similar to the Oregon children’s suit than Oakland litigation, because the Oregon case, like the Dutch case, is against the government, seeking further regulation, rather than against private parties, seeking damages.  All of these cases, though, present some of the same concerns regarding whether courts are the right place to make climate policy, as noted by the Dutch government spokesman, quoted in ClimateWire:

We also believe that renewable energy should be increased and CO2 emissions should be reduced, so this is really about something else: It’s about how the judge has intervened in something that’s [called] democracy, and actually democracy has been sidelined.

It would be nice if democracy could show a greater capacity for addressing climate change, but I still agree that sidelining democracy is rarely a good thing.  Of course, there are good scientific reasons why democracies don’t do so well at dealing with climate change.  Appeals to the courts may be unavoidable.

EPA Must Produce Any Agency Records Supporting Administrator Pruitt’s Statement that Human Activity Is Not the Largest Contributor to Climate Change

Posted on June 8, 2018 by Seth Jaffe

Last Friday, EPA was ordered to produce documents, in response to a FOIA request, on which Administrator Pruitt relied in stating on CNBC that: “I would not agree that [carbon dioxide] is a primary contributor to the global warming that we see,” and “there’s a tremendous disagreement about of [sic] the impact” of “human activity on the climate.”

I’ve done a fair number of FOIA requests in my time.  The request here was about as plain and simple – and clear – as it is possible to be.  The extent to which the government contorted the request in order to make it seem impossible to answer did not sit well with the Court.  Here’s the request as modified by the plaintiffs.  They sought:

(1) agency records that Administrator Pruitt relied upon to support his statements in his CNBC interview,” and “(2) any EPA documents, studies, reports, or guidance material that support the conclusion that human activity is not the largest factor driving global climate change.

EPA objected to the request in part on the basis that it was an improper interrogatory that required the EPA to take a position on the climate change debate.  To which the Court stated that “this hyperbolic objection strays far afield from the actual text of both parts of the FOIA request.”

EPA also argued that the request was vague, asking “how is one to even know precisely what documents one relies on forming one’s beliefs.”  Yikes.  And what is the definition of “is,” Mr. Administrator?

I loved the Court’s response.

Particularly troubling is the apparent premise of this agency challenge to the FOIA request, namely: that the evidentiary basis for a policy or factual statement by an agency head, including about the scientific factors contributing to climate change, is inherently unknowable. Such a premise runs directly counter to “an axiom of administrative law that an agency’s explanation of the basis for its decision must include ‘a rational connection between the facts found and the choice made.  EPA’s strained attempt to raise an epistemological smokescreen will not work here to evade its obligations under the FOIA.”

Epistemological smokescreen.  Humph.

Nor was the Court done.  Responding to EPA’s objection to having to take a position on climate change, the Court trenchantly noted that:

EPA’s apparent concern about taking a position on climate change is puzzling since EPA has already taken a public position on the causes of climate change.

The bottom line?  EPA must complete a search for responsive documents by July 2, 2018, promptly disclose responsive documents, and explain any withholding by July 11, 2018.

This is not the first case under this Administration where I’ve thought how blessed I am that I’m not at DOJ and in the position of having to defend the indefensible from EPA.

How Much Deference Will EPA Get On Its CAFE Standards Decision?

Posted on April 30, 2018 by Seth Jaffe

There’s been a lot of discussion regarding EPA’s decision to withdraw EPA’s Mid-term Evaluation of Greenhouse Gas Emissions for Model Year 2022-2025 Light-duty Vehicles. After pondering for a while, my question is how much deference courts will give to EPA’s decision.

I’ve previously speculated about whether the typical deference to agency decisions might eventually lose its luster, not because conservative judges hate Chevron, but simply because courts might get tired of agencies under this Administration abusing their discretion.

Contrary to the statements in the withdrawal decision, the Obama Mid-term Evaluation was exhaustive.  The withdrawal decision itself, on the other hand, was, as far as I can tell, based largely just on what scientists might objectively describe in jargon as “bitching and moaning” by the auto industry. 

I’ve also previously noted that, in the history of major environmental rules going back to the 1970s, the evidence shows that every single rule has cost less than estimated prior to implementation.  And that’s less than EPA’s estimates of compliance, not just less than industry’s estimates, which have routinely been wildly high.  The reason is that compliance cost estimates never fully account for the ability of the market to respond efficiently to the new standards.

There is some question as to whether the recent withdrawal decision even constitutes final agency action, but the courts will get a crack at this at some point and I am waiting with bated breath to see how they respond.

Infrastructure, Deficits and Climate Change

Posted on March 28, 2018 by Mark R. Sussman

America’s infrastructure is deteriorating as the result of insufficient investment by federal, state and local governments.  In 2017, the American Society of Civil Engineers gave our Nation’s infrastructure a grade of D+, stating that “Deteriorating infrastructure is impeding our ability to compete in the thriving global economy, and improvements are necessary to ensure our country is built for the future.” The President and both the Republicans and Democrats in Congress seem to agree that we need to improve our Nation’s infrastructure.

The problem is “how do we pay for infrastructure improvements?”  In February, the President proposed a plan to invest $1.5 trillion in infrastructure improvements, but the plan relies mostly on privatization of government-owned infrastructure, and on state and local governments, whose resources are already stretched thin.  The federal government’s share of costs would be “only” $200 billion.  Congress is unlikely to agree to a significant investment in infrastructure given the massive deficits predicted to result from the recent Republican tax cuts and the bipartisan budget plan enacted in February.  The tax changes will reportedly increase the deficit by more than $1 trillion over the next ten years, and the bipartisan budget is expected to add at least $300 billion to the deficit.

Paying for the infrastructure improvements that almost everyone seems to agree upon will require either new sources of revenues, or enormous cuts in entitlements or other domestic programs.  Although Speaker Ryan and other proponents of smaller government might want to cut Social Security, Medicare and Medicaid, how likely are they to do so, especially in light of the huge tax give-away to our wealthiest citizens in the recent tax legislation?  Moreover, if they are successful in cutting the country’s safety net, what will that do to the tremendous income inequality that the United States is already experiencing?

One solution to this dilemma may be found in legislation optimistically called “America Wins Act” (H. R. 4209) proposed by Connecticut Congressman John Larson and 20 co-sponsors in November 2017. The bill, like the Carbon Dividends Plan offered by the Climate Leadership Council in February 2017, relies on a gradually increasing carbon tax of over $40 per ton, with some amount paid back to lower income Americans.  Our colleague and frequent blogger, Seth Jaffe, described the Carbon Dividend Plan in a post last year.  The main difference between the Carbon Dividend Plan, proposed by mainstream conservative Republicans, and the plan embodied by the America Wins Act, co-sponsored by Congressional Democrats, is that the former is specifically designed to be revenue neutral, while the later proposes to invest $1.8 trillion over ten years to fund infrastructure improvements.  Of course, since the Climate Leadership Council proposed its Carbon Dividends Plan, Congress blew a huge hole in the federal budget, so a completely revenue neutral plan no longer seems practical if we are to find revenues to support the rebuilding of our infrastructure.

The key elements of the “America Wins Act” include: (i) the imposition of a gradually increasing carbon tax imposed at the first point where fossil fuels enter the economy; (ii) a border adjustment fee on imports to maintain a level playing field with US producers; (iii) establishment of an infrastructure investment fund to finance highways, transit, airports, waterway and flood protection facilities, water pollution facilities, and broadband development; (iv) an energy refund program to provide “carbon dividends” to lower income households; and (v) a fund dedicated to supporting workers and communities heavily reliant on carbon-intensive industries, such as coal, to ease the transition to a new energy future. 

Unlike the Climate Leadership Council’s Carbon Dividend Plan, Congressman Larson’s proposal does not specifically include steps to reduce energy and climate change regulation that should not be needed if a market-based carbon fee program is adopted.  Nor does the “America Wins Act” contemplate the use of carbon offsets, like those suggested by our colleague, Jeffrey Fort, in his post of August 21, 2017.  These good ideas and others can certainly be incorporated into any legislation proposing to reduce carbon emissions, while simultaneously improving our Nation’s infrastructure without further exploding the deficit.  Such legislation offers a genuine opportunity for a true bipartisan approach to these critical issues facing the Nation.  Wouldn’t it be great if the President and our representatives in Congress actually worked in a bipartisan way to enact legislation that does not look to the past, but instead addresses policies that will strengthen our Nation’s economy and protect the World’s environment in the 21st Century and beyond?   Is it too much to ask our leaders to focus on implementing innovative, market-based solutions that can be supported by both conservatives and liberals, instead of spending all of their time trying to make partisan political points to be re-elected?

Federal Common Law Controls California Climate Actions: Never a Dull Moment

Posted on March 12, 2018 by Seth Jaffe

Earlier this week, Judge William Alsup denied a motion by Oakland and San Francisco to remand their public nuisance claims against some of the world’s largest fossil fuel producers to state court.  However, I’m not sure that this is a victory for the oil companies.  This might be more of a “be careful what you wish for” scenario.

After the Supreme Court decision in AEP v. Connecticut and subsequent decisions, such as Native Village of Kivalina, it seemed pretty clear that the federal Clean Air Act had displaced federal common law, leaving only potential state law claims in its place.

Judge Alsup had a different idea.  The cities’ claims were only brought against fossil fuel producers, not electric generators.  The claims were based on the allegations concerning the companies’ conduct in selling fossil fuels into the stream of commerce, while at the same time allegedly making misrepresentations concerning the risks of climate change.

Judge Alsup concluded that this was a distinction with a difference.  The Clean Air Act displaces federal common law regulating operations that emit GHGs.  The Clean Air Act, however, does not regulate the sale of fossil fuels.  Thus, it does not displace the type of public nuisance action at issue in this case.  (Of course, this leads to the odd result that the companies’ sale of fossil fuels is subject to public nuisance claims, even though methane emissions from oil wells and refineries are not, because those are subject to regulation under the CAA!)

Having made this critical distinction, the rest of the decision was relatively easy.  As Judge Alsup noted:

If ever a problem cried out for a uniform and comprehensive solution, it is the geophysical problem described by the complaints, a problem centuries in the making. The range of consequences is likewise universal. Taking the complaints at face value, the scope of the worldwide predicament demands the most comprehensive view available, which in our American court system means our federal courts and our federal common law. A patchwork of fifty different answers to the same fundamental global issue would be unworkable. This is not to say that the ultimate answer under our federal common law will favor judicial relief. But it is to say that the extent of any judicial relief should be uniform across our nation.

I’m not sure that Judge Alsup is right, though I appreciate his creativity.  And if appellate courts decide he is right, the defendants may come to regret removing the action from state courts.

Statutory Deadlines Matter—EPA Gets Taken to the Woodshed

Posted on February 14, 2018 by Seth Jaffe

Last week, EPA was ordered to take final action on a Clean Air Act § 126(b) petition filed by the State of Connecticut, which asserted that emissions from the Brunner Island Steam Electric Station in Pennsylvania contribute to nonattainment in Connecticut.  

EPA did not dispute liability; it had clearly missed the original statutory deadline. The case was all about the remedy. EPA asked to be given until December 31, 2018 to respond. Plaintiffs said EPA could respond within 60 days.

Noting the “heavy burden” EPA bears in trying to demonstrate that it cannot comply with the congressionally mandated timeline, the Court ordered a response within 60 days, concluding that:

Defendants’ proposed schedule contravenes the congressional intent that EPA “act quickly on a Section 126(b) petition.”

I noted last spring that we are likely to see more of these cases. And I think we’re also going to see increasing judicial impatience with agency delay. I also wonder if this case might be the first bit of evidence that Scott Pruitt’s order precluding the notorious—if mythical—practice of “sue and settle” may have come back to bite EPA.

EPA had to know it was going to lose this case. In bygone days—meaning 2016—EPA would have negotiated for the best schedule it could have gotten. If EPA had told the plaintiffs it would respond to the petition within 90 or even 120 days, my guess is that the plaintiffs would have accepted such a proposal. Given the Pruitt memorandum, that was not possible. The outcome? The worst possible result for EPA.

Just wonderin’.

(Full disclosure: Foley Hoag has represented Talen Energy, owner of Brunner Island, on matters unrelated to Brunner Island. We take no position on the merits of the underlying § 126(b) petition.)

The North Slope Is Really, Really, Getting Warmer. Drill, Baby, Drill

Posted on December 20, 2017 by Seth Jaffe

The Washington Post reported last week that Utqiagvik, Alaska (formerly known as Barrow), has gotten so warm, so fast, that NOAA’s computers can’t even believe it.  The data for Utqiagvik (that’s hard to type!) were so high that the computers determined it must be anomalous and pulled all of the data from Utqiagvik from the NOAA monthly climate report.  Only when scientists realized that Utqiagvik was completely missing from the report did they notice what had happened.

How hot does it have to get to get bounced by the computer?  How about average October temperatures 7.8 degrees warmer than in 2000?  Average November temperatures 6.9 degrees warmer than in 2000?  Likely culprit?  Melting sea ice means that less sunlight is reflected.  That’s one nasty negative feedback loop.

In the meantime, as I noted in October, Alaska Governor Bill Walker has concluded that Alaska needs more oil drilling (can you say “Open ANWR” three times fast?) in order to pay for climate change mitigation.  It’s apparent that Governor Walker has not read Faust.

Governor Walker, this one’s for you.

PASSING LESS GAS

Posted on December 5, 2017 by Keith Hopson

While some still debate climate change, on 11/22/17, eight of the oil and gas industry’s biggest players signed on to a set of Guiding Principles for reducing methane emissions across the natural gas value chain.  BP, Eni, Exxon Mobil, Repsol, Shell, Statoil, Total and Wintershall, in collaboration with international institutions, NGOs and academics, drafted the Guiding Principles.

The five guiding principles are: continually reduce methane emissions; advance strong performance across value chains; improve accuracy of methane emissions data; advance sound policy and regulations on methane emissions; and increase transparency.  Click here for the entire Guiding Principles document.

It will be interesting to see if these “voluntary principles” eventually become enforceable regulations.  Likewise, it will be interesting to see if these guidelines become “industry standards” and, accordingly, whether by acquiescence, private litigation, or lender requirements, become de facto regulations.

Time will tell.

It is significant to see so many major oil and gas industry actors responsibly, firmly and publicly commit to both reduce methane emissions and advance monitoring.  Perhaps now others in the industry will be more inclined to join the responsible eight and commit to pass less gas.

What’s Happening with the Other Clean Air Act (CAA) §111(d) Rule?

Posted on November 24, 2017 by Steve Kohl

Long ago and in what seems like a faraway place, the D.C. Circuit vacated the NESHAP for boilers and the NSPS for Commercial and Industrial Solid Waste Incineration (CISWO) units. (See “EPA in the D.C. Circuit – Where Has All the Deference Gone”, ACOEL Blog, September 23, 2008). The demarcation between boilers and other process heaters and CISWI units is whether or not they burn waste. The D.C. Circuit held that EPA had improperly drawn that line. Since the source categories are mutually exclusive under the Clean Air Act, the improper line drawing resulted in the improper definition of each source category, resulting in the demise of the rules. Fast forwarding (sort of) to 2013, EPA finally promulgates a new and improved boiler NESHAP and new NSPS rules for new and existing CISWI units. These rulemakings were only made possible by the Non-Hazardous Secondary Materials (NHSM) rule which defines what is or is not a waste when burned. It takes the entirety of 40 C.F.R. Part 241 to provide this definition and the processes for determining if something is a waste or a fuel. 

Now comes the fun part. An existing boiler burning clean wood had to be in compliance with the NESHAP by early 2016, but the same existing boiler burning “dirty” wood categorized as a waste under the NHSM rule didn’t have to comply with the NESHAP since it is not a boiler but an incinerator. Well, it must have to comply with CISWI existing incinerator standards, right?  Well no. In fact, there really aren’t any applicable NESHAP requirements for existing boilers burning waste. 

The CISWI standards for existing units, 40 C.F.R Part 60, subpart DDDD, are §111(d) guidelines, which additionally must address the requirements enacted for incinerators in §129 of the CAA.  Those who have followed the Clean Power Plan (CPP) about which much has been written, including several ACOEL blogs (Is You Is Or Is You Ain’t Transformative?Unprecedented Program Leads To Unprecedented ResponsePulling the Plug on Greenhouse Gas Emissions), recognize that most states were in the process of developing state implementation plans (SIPs) to implement the CPP when the Supreme Court stayed the rule.  That’s because the CPP was also a §111(d) “guideline” for existing electric steam generation units. Actual application of the CPP was dependent upon SIPs approved by EPA which implement the guidelines or, if a state defaults, a federal implementation plan (FIP) implementing the CPP guidelines. Similarly, the CISWI standards for existing units must be implemented through approved SIPs or a FIP.  The SIPs or FIP required to implement the CISWI standards for existing units are required to be in place within five years, or February 7, 2018 and compliance is required by that same date.  However, no such SIP has been approved and no FIP finally promulgated.  Polite inquiries to EPA have provided no insight to the ultimate timing.

The delay in taking final agency action to implement CISWI standards for existing sources creates some interesting circumstances.  A state may recognize that through a renewal or a reopener of a facility’s Title V permit it should incorporate CISWI requirements, but it really can’t since there isn’t a federally enforceable requirement for CISWI. Subpart DDDD guidelines contain some provisions for determining whether certain sources qualify for an exemption from CISWI under §129. If they are exempt from CISWI, then they should be complying with the currently applicable boiler NESHAP, but there really isn’t any applicable rule for determining the validity of an asserted exemption. Subpart DDDD guidelines also provide that if a waste-burning source does not want to comply with CISWI and instead intends to comply with an applicable NESHAP, it must cease burning waste six months in advance of the date its chooses to switch from being a CISWI source to a NESHAP source. So if that dirty wood burning boiler doesn’t intend to comply with CISWI as of the ostensible compliance date of February 7, 2018, should it have switched to clean wood in July of 2017 even though there was no applicable rule requiring the six month period?

Final promulgation of the FIP or approval of the submitted SIPs would not appear to be a heavy lift since the proposed FIP and the submitted SIPs essentially mirror subpart DDDD.  So the delay to what is now four years and nine months out of the five years allowable under the CAA is somewhat incomprehensible. It begs the question, “What’s happening with this §111(d) rule?” 

Coming Soon to a Northeast or Mid-Atlantic State Near You: Regulations on Carbon Emissions From Transportation

Posted on November 16, 2017 by Seth Jaffe

Earlier this week, eight states in the Transportation Climate Initiative issued a joint statement pledging to pursue regional solutions to GHG emissions from transportation.  The statement does not identify any specific policy options; instead it simply announced that they are “initiating a public conversation about these opportunities and challenges.”

Even if the statement doesn’t say so, what everyone is hearing from this announcement is simply this:  RGGI for transportation.

To give one an idea of the momentum that is finally building in support of regulation of transportation sector GHG emissions, one need look no further than the recent letter sent jointly by the New England Power Generators Association (our client), the NRDC, the Sierra Club, the Union of Concerned Scientists (also our client!), and the Acadia Center to four New England governors, requesting that they

"develop and participate in a regional, market-based policy to address greenhouse gas emissions from the transportation sector."

If the letter seems at first blush to involve strange bedfellows, think again.  From NEPGA’s perspective, its members are reasonably sick and tired of being the only target of GHG emissions regulations – particularly given that electric generation now represents less than ½ the GHG emissions from transportation.  From the perspective of the environmental groups, they know that it will be literally impossible to meet targets of 80% reductions in GHG emissions by 2050 without very substantial reductions in emissions from transportation.

For too long, states focused on electric generation emissions to the exclusion of transportation for one reason only.  Transportation will be difficult.  Difficult is no longer an excuse.

It’s about time.

Court Rejects BLM’s Efforts to Unbalance the Scales of Justice

Posted on November 6, 2017 by Seth Jaffe

Last month, Magistrate Judge Elizabeth Laporte granted summary judgment to plaintiffs and vacated the Bureau of Land Management’s notice that it was postponing certain compliance dates contained in the Obama BLM rule governing methane emissions on federal lands.  If you’re a DOJ lawyer, it’s pretty clear your case is a dog when the Court enters summary judgment against you before you’ve even answered the complaint.

The case is pretty simple and the outcome should not be a surprise.  BLM based its postponement of the compliance deadlines on § 705 of the APA, which authorizes agencies to “postpone the effective date” of regulations “when justice so requires.”  However, every court that has looked at the issue has concluded that the plain words of the APA apply only to the “effective date” of a regulation and not to any “compliance date” contained within the regulation.

It seems clearly right to me.  For Chevron geeks out there, I’ll note that the Court stated that, because the APA is a procedural statute as to which BLM has no particular expertise, its interpretation of the APA is not entitled to Chevron deference – a conclusion which also seems right to me.

What particularly caught my eye about the decision was the Court’s discussion of the phrase, “when justice so requires.”  In a belt and suspenders bit of analysis, the Court also made findings that justice did not require postponement.  BLM’s argument was that justice required the postponement because otherwise the regulated community would have to incur compliance costs.  However, as the Court noted, “the Bureau entirely failed to consider the benefits of the Rule, such as decreased resource waste, air pollution, and enhanced public revenues.”  Indeed:  

If the words “justice so requires” are to mean anything, they must satisfy the fundamental understanding of justice: that it requires an impartial look at the balance struck between the two sides of the scale, as the iconic statue of the blindfolded goddess of justice holding the scales aloft depicts. Merely to look at only one side of the scales, whether solely the costs or solely the benefits, flunks this basic requirement. As the Supreme Court squarely held, an agency cannot ignore “an important aspect of the problem.” Without considering both the costs and the benefits of postponement of the compliance dates, the Bureau’s decision failed to take this “important aspect” of the problem into account and was therefore arbitrary.

I think I detect a theme here.  Some of you will remember that Foley Hoag filed an amicus brief on behalf of the Union of Concerned Scientists, supporting the challenge to President Trump’s “2-for-1” Executive Order.  We made pretty much the same arguments in that case that Magistrate Judge Laporte made here – minus the reference to the scales of justice.

Unless SCOTUS gets rid of all agency deference, the Trump Administration is going to get some deference as it tries to eliminate environmental regulations wherever it can find them.  However, if it continues to do so while looking solely at the costs of the regulations to the business community, while ignoring the benefits of the regulations, it’s still going to have an uphill battle on its hands.

PFAS – NOT JUST ANOTHER “EMERGING” CONTAMINANT

Posted on September 19, 2017 by Kenneth Gray

No longer emerging, Per- and Polyfluoroalkyl Substances (PFASs) have exploded on the environmental and toxic tort landscape in 2016 and in 2017.  Cognoscenti will recall U.S. EPA phase-out initiatives dating back to 2000, EPA Drinking Water Health Advisories set in 2009 and the TSCA action plan of the same year, the 2012 EPA drinking water monitoring rule, and even a blog in this very space “way back” in 2011.

Why have PFASs recently been compared to asbestos and PCBs for potential costs and impacts?  And why will they continue to be significant even if there is no further federal regulation in the near term?  Here’s why:

·        The compounds have many uses in many products and were therefore manufactured or used (and released) at a large number of facilities. Commercial products included, among others, cookware, food packaging, personal care products, and stain resistant chemicals for apparel and carpets.  Industrial and commercial uses included photo imaging, metal plating, semiconductor coatings, firefighting aqueous film-forming foam, car wash solutions, and rubber and plastics.  Sources include landfills.

·        PFASs are highly mobile and highly persistent in the environment, and so will be present for many decades.

·        The EPA Drinking Water Health Advisory level was reset (lower) in 2016 at 70 parts per trillion (ppt).

·        EPA estimates that 6.5 million people are affected by PFASs in public water systems, which does not include any impacts to smaller water systems or private wells.

·        More and more public water systems are voluntarily testing for PFASs – and more states are compelling testing.

·        Airborne releases of PFASs have contaminated groundwater and surface water.

·        They’re ubiquitous in the environment and present in human blood.  PFASs are also found in fish, and thus fish advisories are being set by states. 

·        California has proposed listing PFASs under Proposition 65 based on reproductive toxicity.

·        Many U.S. Department of Defense properties (and former properties) were the sites of PFAS releases in firefighting foam, and DOD is ramping up additional testing on its facilities.  

·        Toxic tort lawsuits have been filed over PFAS contamination in Parkersburg, WV; Decatur, AL; Merrimack, NH; and Hoosick Falls, NY. More lawsuits are likely.

·        Several Attorneys General are reportedly considering lawsuits on behalf of the citizens of their states.

It may only be the end of summer, but can you sense a snowball?

Turn On, Plug In, Peel Out

Posted on September 18, 2017 by Samuel I. Gutter

(With apologies to the late Timothy Leary [“Turn on, tune in, drop out”], who was referring to Electric Kool-Aid, not Electric Vehicles.)

Today, September 18th, is the second anniversary of the first public disclosure of the VW “Defeat Device” scandal.  It also marks the beginning of the end of sales of diesel-powered VW cars in the U.S.  And while other companies (Chevy, BMW, Jaguar and Land Rover, among them) still offer diesel cars and SUVs, the pickings are a lot slimmer. 

One unintended consequence of diesel’s fall from grace is the boost it has provided to electric vehicles.  Auto manufacturers must find ways to meet increasingly stringent fuel-economy standards, and for some the efficient diesel was a way to hike their “CAFE” (corporate average fuel economy) numbers.  Now, signs are that Tesla, even with the introduction of its less-expensive Model 3, will soon be sharing the EV market with a growing number of competitors.  GM and Nissan are expanding their pure EV offerings, and Volvo, Mercedes and Mini are planning to release their own “zero emission vehicles” (ZEVs) over the coming years.  Meantime, plug-in electric/gasoline hybrids are becoming common-place, with offerings from Toyota, Cadillac, Volvo, Ford, BMW, and others.  

While diesels dominate the line-haul truck market, Cummins and Tesla are both planning to introduce short-haul electric heavy trucks in the near future.  And what could be more telling than the announcement by the quintessential American company, Harley-Davidson, that it will start selling its “Livewire” electric motorcycle in five years?  Will “Rolling Thunder” become an anachronism?

International pressure to reduce GHGs and urban air pollution is also at play.  China, India, England, France and Norway are all considering an outright ban on the sale of fossil-fueled vehicles.  And back to VW, as part of its Defeat Device settlement, the company agreed to spend $2 billion over the next 10 years on U.S. infrastructure to support electric vehicles.

Battery prices are coming down and charge stations are going up.  And sure, diesels have great torque, but as anyone who has experienced the head-banging g-force of mashing the pedal in an EV will tell you, diesels are best viewed in the rear-view mirror. 

Still, many institutional and social barriers remain – proprietary charging technologies, reliance on government subsidies, high costs of electricity with (in some areas) no reduction in nighttime rates, and consumers who are wary of the emerging technology and fear being stranded on the highway with a depleted battery.  But while ZEVs and plug-in hybrids are still a fraction of total vehicles sales, they are increasing in numbers and market share.  As prices drop and driving range increases, electric vehicles will become more affordable and practical.

Fasten your seatbelt, there might be an EV in your future!

Using Offsets with a Carbon Tax? Use what works.

Posted on August 21, 2017 by Jeffrey C. Fort

Proposals to adopt a fee on emissions of greenhouse gases (also called "Carbon Taxes") have made headlines, with both "conservative Republicans" and "liberal Democrats" releasing ideas.   An elevated price on carbon -- the centerpiece of the suggestions for a federal program from both camps -- is not predicted to lower emissions, except by setting a very high price.  Such an approach is not practical, unless room is allowed for states to continue their innovations and for volunteers to also reduce emissions.   Getting the best result for the least cost - i.e. the most efficient emission reduction -- ought to be used.

EPA already has its Mandatory Reporting Rule.  It does not cover non-obvious sectors like farming who could be affected by the proposed fee.  The MRR reports provide a sound basis for any further federal program such as carbon fees.

Carbon taxes have yet to show direct evidence of any reductions in emissions of carbon equivalent greenhouse gases.  As another cost which can be passed on in many sectors, it is a clumsy way to achieve environmental benefits.

However, if a "fee" is imposed, it should recognize state programs such as the ARB and RGGI programs.  Those allowances ought to be counted and credited -- "a tonne is a tonne is a tonne" regardless of where emitted into the troposphere. 

Voluntary reductions from non-regulated sectors ought to count too.  Known as carbon offsets, they are issued by the several independent registries and have real environmental benefits and integrity. They are at least as real as monitored -- or more often estimated --emissions from AP-42 or other EPA-sanctioned sources.  Offsets can only be recognized: (1) for reductions which are not required by law and not business as usual; (2) if based on a scientific methodology to measure such which has been accepted after public comment and peer review, (3) from a project has been announced, undertaken and proven to have occurred.  Only after all such has been proven, is a credit awarded and available to be purchased and (4) then the offset credit must be chosen (i.e. purchased) for use by a regulated entity.  Thus, there are several steps at which such are scrutinized by independent parties.

The proposals for carbon taxes are well-intentioned.  But the most efficient and least disruptive approach would include not only recognizing state programs but also unlimited carbon offsets from economic sectors not under the tax.  All businesses should have a role; those who are more efficient in producing their products for lower climate impact ought to have a way to contribute.

NGOs 1, Trump EPA 0: The First Skirmish in the Great Environmental Rollback War Goes to the Greens

Posted on July 11, 2017 by Seth Jaffe

Last week, the D.C. Circuit Court of Appeals handed environmentalists at least a temporary win in what I think was the first case to reach judicial decision in Scott Pruitt’s great environmental roll-back tour of 2017.  The Court rejected EPA’s effort to stay the effective date of the New Source Performance Standards for fugitive emissions from oil and natural gas operations, pending EPA’s reconsideration of certain aspects of the Obama-era rule.

Notwithstanding Judge Brown’s dissent, EPA’s position on the merits seemed barely credible.  I understand the argument that the stay was not final agency action and thus not judiciable.  It just doesn’t seem compelling to me.  If EPA had amended to rule to extend the compliance deadlines, that clearly would have been subject to judicial review.  Why should the answer be different because EPA styles its action as a stay, rather than a revision to the regulations?  The impact is exactly the same.

As to EPA’s position that the four issues which it was reconsidering could not have been addressed during the original rulemaking by the industry groups now seeking reconsideration, EPA’s position was almost embarrassing.  As the Court repeatedly demonstrated, not only could the industry groups have addressed the issues during the original rulemaking, but they actually did so.  Moreover, EPA did consider those comments and, at least in parts, adopted them in the final rule.  My favorite example is the court’s discussion regarding the criteria for exemption for well-site pneumatic pumps.  As the Court noted:

[The American Petroleum Institute] … proposed precisely the technical infeasibility language EPA adopted in the final rule, suggested that an engineer certify technical infeasibility, and justified its proposed exemption based on a lengthy description of why existing sites were not designed to “handle” EPA’s proposal.

The record thus belies EPA’s claim that no industry group had an opportunity to comment on the “scope and parameters” of the pneumatic pump exemption.

The real question at this point is whether this decision is any kind of harbinger.  Practitioners know that the record of the Bush EPA in rolling back Clinton rules was shockingly poor, given Chevron deference.  Are we going to see the same again?  The Court threw EPA what could prove to be a rather large fig leaf by noting that the decision does not prevent EPA from reconsidering the methane rule.  The Court also quoted FCC v. Fox Television Stations – the same case on which EPA is relying in its rollback of the WOTUS rule:

[EPA] is free to [reconsider the rule] as long as “the new policy is permissible under the statute.., there are good reasons for it, and … the agency believes it to be better.”

This is where the battles are going to be fought over the next several years.

Is It a Dividend? Is It a Tax? Could President Trump Care Less?

Posted on June 26, 2017 by Seth Jaffe

In February, I posted about the formation of the Climate Leadership Council and its push for what it calls its “Carbon Dividend” plan.  In essence, it’s a gradually increasing carbon tax.  The plan would be revenue neutral, with the proceeds being returned to taxpayers.  Thus, the name.  I loved the idea and I still love it.  I particularly love that the tax starts at $40/ton – that’s a serious number.

However, as I noted in February, the founders of the CLC are a who’s who of the old-line GOP establishment – precisely those whom President Trump would generally refer to as “losers”, unless he could spare the time to come up with something more derogatory.

The CLC has now brought on a number of corporate heavyweights, including GM and four of the world’s largest oil and gas companies (BP, ExxonMobil, Shell, and Total), among others.  They published their support in a Wall Street Journal ad.  In a cheerful bit of optimism, the program is now called “The Consensus Climate Solution.”  The ad describes the plan as “Pro-Environment, Pro-Growth, Pro-Jobs, Pro-Competitiveness, Pro-Business and Pro-National Security.”  Who could be against it?  Here’s a hint.  I think that the tag line would work better if phrased as follows:

Pro-Environment, Pro-Trump, Pro-Growth, Pro-Trump, Pro-Jobs, Pro-Trump, Pro-Competitiveness, Pro-Trump, Pro-Business, Pro-Trump, and Pro-National Security (and Pro-Trump)

Seriously, this is no time for cynicism.  This is a great plan.  A tax starting at $40/ton would have real impact.  (The most recent RGGI auction price?  $2.53/ton.)  As I noted earlier this week, we need smart people of good will and of all political stripes advocating solutions if we’re going to get anywhere.

Trump may call you losers, but, men and woman of the CLC, I salute you!

Does Chevron Ever Permit EPA to Rewrite a Statute? EPA’s Release Reporting Exemptions Are Struck Down

Posted on April 13, 2017 by Seth Jaffe

On Tuesday, the Court of Appeals for the District of Columbia vacated EPA’s final rule governing reporting of air releases from animal feeding operations.  The Court found that EPA had no statutory authority to exempt AFOs from the reporting regulations.

The decision is also important because it is another in a recent line of cases regarding the extent of agency authority to interpret statutes.  The issue was whether EPA had authority to exempt smaller AFOs from reporting requirements, on the ground that it could not:

foresee a situation where [it] would take any future response action as a result of such notification[s].

Although EPA did not explicitly justify its rule on de minimis grounds, the Court understood EPA to be making a de minimis argument and analyzed the rule in that context.  The Court concluded that EPA had not justified a de minimis exception, because:

an agency can’t use it to create an exception where application of the literal terms would “provide benefits, in the sense of furthering the regulatory objectives, but the agency concludes that the acknowledged benefits are exceeded by the costs.”

Here, the Court found that there were benefits to requiring reporting without a de minimis exception.  That was enough to vacate the rule.

It is worth noting the concurrence from Judge Janice Rogers Brown, who agreed that EPA had overstepped, but was concerned about the panel opinion’s summary of Chevron as being focused on whether the agency’s interpretation is “reasonable.”  Stoking the anti-Chevron flames, Judge Brown wrote to make clear that the “reasonableness” inquiry does not apply at step one of Chevron.  Ever-vigilant, she wants to be certain that courts do not abdicate their duty to state what the unambiguous language of a statute means.

I don’t have any problem with that.  Phase I of Chevron is an important bedrock principle.  If there’s no ambiguity, there’s no deference.  However, it’s worth noting that Judge Brown also stated that:

an Article III renaissance is emerging against the judicial abdication performed in Chevron’s name.

Notwithstanding the congressional discussion of this issue, I remain skeptical that any such “Article III renaissance” is occurring.  One concurrence from one appellate judge who happens to be named Gorsuch does not a renaissance make.

Of course, the really important part of Judge Brown’s concurrence was her citation to Luck Be a Lady, from Guys and Dolls, the greatest musical of all time.

Trump’s “Tortured” Maneuvering Can Be Legal Maneuvering

Posted on April 11, 2017 by Richard G. Stoll

Bob Sussman is a former high-ranking Obama and Clinton EPA official with a stellar academic and professional background.  He recently published in Inside EPA a thought-provoking piece entitled “Trump’s Tortured Maneuvering on Climate Change.”

No matter what your views on climate, Bob’s piece is worth reading.  I find much to agree with in Bob’s observations, but would respectfully disagree with one. 

Focusing on the president’s March 28 Executive Order (EO), Bob raises the valid question of why Mr. Trump touted it on job-saving, energy independence grounds.  Bob makes a strong case (as if he really needed to) that coal mining jobs are dwindling due to market forces and that the U.S. energy outlook is just fine. 

Bob posits that Trump’s job-energy independence focus reveals a divide and major discomfort within the Administration on whether and how much to deny that humans are involved with climate change.  He notes that the March 28 Order side-steps any position on both the “Endangerment Finding” and the Paris Accords.   

So far so good.  My respectful disagreement relates to Bob’s argument that the Trump EPA would have a difficult time sustaining major cutbacks to the Obama Clean Power Plan (CPP) on judicial review.  He speculates that a new Trump CPP might simply retain “building block 1” (plant efficiency improvements) from the 3-block “beyond-the-fenceline” Obama CPP.  He argues that “the courts may well balk at this approach as a contrived effort to duck the challenge of climate change by taking refuge in narrow legal arguments.”

Here is why I disagree:

a.  Following the 2007 Supreme Court Massachusetts ruling and EPA’s subsequent Endangerment Finding, EPA is not required by the Clean Air Act (CAA) to issue GHG rules with any particular degree of stringency – EPA must just issue rules.

b.  The “beyond-the-fenceline” features of the Obama CPP are based upon truly adventurous interpretations of the words of the CAA.  There is certainly nothing in the CAA that requires those interpretations.  (Recall the U.S. Supreme Court has taken the unprecedented step of staying the Obama CPP throughout the entire judicial review process.)  Even if the D.C. Circuit were to uphold these interpretations, it would only be upholding the Obama EPA’s discretion to adopt them; the Court could not rule that such interpretations were mandated by the CAA.

c.  The Supreme Court and D.C. Circuit case law are clear on the following points:

i.  A new administration is free to reverse rules issued by a prior administration based entirely upon policy preferences, even where there are no new facts or information, so long as the new administration adequately explains the basis for the reversal;

ii.  There is no heightened standard of judicial review when an agency reverses course; and an agency need not convince the court that the reasons for the new policy are better than the reasons for the rejected one.

See my recent ACOEL blog for the citations to the cases.

d.  Because the statutory interpretations supporting beyond-the-fenceline requirements are so adventurous (and stayed by the Supreme Court), it should be easy for the Trump EPA to defend a new CPP as a matter of policy based on CAA interpretations that are far less adventurous.

e.  If and when the new CPP reaches the Supreme Court, it is difficult to see the Court departing from the precedents of the cases cited in my ACOEL blog, particularly with Justice Gorsuch filling Justice Scalia’s seat.

Should Courts Defer to EPA’s Scientific Expertise if EPA Gets Rid of Its Expertise?

Posted on April 6, 2017 by Seth Jaffe

Earlier this week, the 9th Circuit Court of Appeals rejected challenges to the Federal Implementation Plan EPA promulgated after finding that Arizona’s regional haze State Implementation Plan was inadequate.  I think that the result is both correct and unsurprising.

However, one part of the opinion – a recitation of black-letter law – caught my eye.  In discussing the standard of review, the court noted that the arbitrary and capricious standard is “highly deferential.”  No surprise there.  It also noted that courts are particularly deferential when reviewing agency scientific determinations.  Also no surprise.

And yet….

What happens if EPA eliminates all of its climate science expertise, and then eliminates the Endangerment Finding?  Certainly, a court could still recite the traditional level of deference, but then note that “deference is not abdication” and rule that EPA’s decision must be reversed even under the deferential threshold.

And yet….

What happens if the Trump administration repeatedly makes regulatory decisions based on a “scientific” viewpoint that is so broadly rejected by the scientific community that “scientific” must be put in quotation marks?  Might courts at some point conclude that EPA has forfeited the deference normally given to agency scientific decisions?

Just asking.  It’s purely a hypothetical, of course.

The Latest Executive Order: Any Kind of Consistency Is the Hobgoblin of Little Minds

Posted on March 31, 2017 by Seth Jaffe

Make no mistake, the Executive Order signed by President Trump at EPA yesterday is a big deal.  Time will tell whether the Administration’s U-turn on the Obama rules currently in litigation, such as the Clean Power Plan and the rule on fracking on federal lands will make any difference to judicial review of those rules.  There are plenty of states and NGOs ready to step into EPA’s and BLM’s shoes to defend those rules.

Regardless, though, it’s important.  Social cost of carbon?  Poof.  Gone.  Climate Action Plan?  Gone.  Consideration of climate change in environmental impact reviews?  Gone.

We already know all this, though.  I’d like to focus on a few details concerning the EO that might have gone unnoticed.

  • The order states that development of domestic natural resources “is essential to ensuring the Nation’s geopolitical security.”  I found this statement interesting in light of the recent statements by Secretary of Defense Mattis, who very clearly stated that climate change is real and is itself an important security risk.
  • The order states that environmental regulations should provide “greater benefit than cost.”  I found this statement somewhat odd, given that the President’s prior EO known as the 2-for-1 order, essentially requires agencies to ignore the benefits of regulations and focus solely on the costs that they impose.
  • Similarly, the Order requires agencies, in “monetizing the value of changes in greenhouse gas emissions resulting from regulations,” ensure that their analyses are consistent with OMB Circular A-4, issued in 2003.  The Order states that Circular A-4 embodies “best practices for conducting regulatory cost-benefit analysis.”

I’d be interested in knowing if a single one of the authors or peer reviewers of Circular A-4 have anything nice to say about the 2-for-1 Order?

The Conservative Uphill Slog for a Carbon Tax

Posted on February 9, 2017 by Seth Jaffe

Earlier this week, the Climate Leadership Council rolled out The Conservative Case for Carbon Dividends (note the absence of the “T” word in that title!).  It’s a serious proposal and, if we lived in a world of facts, rather than alternative facts, it would be a useful starting point for a discussion.

Here are the highlights:

  • A gradually increasing carbon tax, starting somewhere around $40/ton.
  • Return of all revenue from the tax to citizens through dividend checks.  The CLC predicts that the 70% of Americans with lowest income would receive more in dividends than they would pay in taxes.
  • Border carbon adjustments.
  • Elimination of existing carbon regulations.  It’s not clear what this would cover, but it would include at least the Clean Power Plan.  It would also include elimination of tort liability (presumably limited to tort liability related to claims concerning climate change).

I’d sign up for this today, but I’m not exactly one of the people that needs convincing.  According to GreenWire (subscription required), former Secretary of State James Baker, who led the public presentation of the report, acknowledged that attaining enactment of the proposal would be an “uphill slog.”  I think that’s putting it mildly.  The CLC members are basically a who’s who of the old-line GOP mainstream – precisely the types that President Trump appears to have consigned to the dustbin of history.

Nonetheless, hope springs eternal and we have to start somewhere.