The Answer is Blowin’ in the FAMGs

Posted on February 19, 2019 by Charles F. Becker

It is well known that Des Moines is, among other things, the most popular city for millennial home buyers and, according to Forbes, the fifth best place for businesses and careers.  However, these accolades are not the reason for Facebook, Apple, Microsoft and Google (“FAMG”) choosing to invest billions of dollars in data centers in the Des Moines area. They are building here because they want to be able to say they are “green” – their services are powered by renewable energy. They can say that because Iowa is the third largest producer of wind energy in the country.

FAMG seem to recognize two fundamental truths: 1) Customers want to purchase from green companies, and 2) renewable energy is cost effective and goes a long way to satisfying #1. In short, environmental awareness means profits.

A 2018 study from Deloitte Resources provides some interesting insights:

1.      69% of businesses said customers are demanding more environmentally considerate solutions – up 7% from one year earlier;

2.      70%  said customers are demanding businesses procure at least some of their energy from renewable resources – up 9% from a year earlier; and

3.      79% of businesses actively promote their environmental efforts to their customers – up 5% from a year earlier.

When you combine these statistics with polling that shows 75% of adults ages 18 to 29 say wind and solar power should be a “more important priority” than fossil fuels, the message is clear – satisfied customers mean more green (both environmentally and monetarily).

Moreover, giving customers what they want also makes economic sense.  Wind and solar power have received a lot of attention, and made a lot of progress, over the past fifteen years.  As a result, the cost of renewable energy is dropping so fast that by 2020 it will be a cheaper source of power than fossil fuels.  At the same time costs are dropping, coal-fired power plants are concluding their life cycle.  In 2018, 42% of the coal-fired power stations worldwide were running at a loss.  By 2030, that number will be 96%. 

In the very near future, it won’t really matter whether businesses want to tout their green credentials by saying they use renewable energy because a least cost power system without coal is an “economic inevitability.” The early adopters are just taking credit (and customers) for what’s coming.

Despite the numbers, the President and a significant number of conservative politicians are doing everything they can to deny climate change, promote coal and increase the cost of renewable energy.  The question is why?  Certainly the politicians recognize that businesses (i.e. donors) are moving away from coal, so the answer must be something else.  Turns out, it’s mostly perspective.

Studies done by the Pew Research Center found that Democratic support for renewable energy is based primarily on environmental protection (it is good for mother earth).  Conservative Republicans reject it because it runs counter to a need to support more coal mining/fracking and because environmental solutions do more harm than good.  This Republican viewpoint, however, is not universally held.  A growing number of Republicans support renewable energy and do so on the basis that it promotes self-sufficiency and is a financially wise decision.  When couched in these terms, Republicans have not only been able to switch positions, but have successfully challenged the President’s position on renewable energy and been elected.  

My point to all this is not to extol the superiority of Des Moines as a city or to praise the environmental impacts of renewable energy. It is to say that perhaps Democrats have been going about the promotion of renewable energy all wrong.  Forget chest beating and yelling “everyone must be green.”  That is a position not everyone believes and using it means the people you want to persuade have already stopped listening.  Instead, talk about how renewable energy reduces costs, promotes self-sufficiency and is what consumers and businesses want.  The side benefit of environmental protection shouldn’t even be mentioned. 

There’s nothing wrong with telling someone what they want to hear . . . if it’s true.

A LAWYER’S GUIDE TO ADDRESSING CLIMATE DISRUPTION

Posted on February 14, 2019 by John C. Dernbach

Co-authored by Michael B. Gerard

Recent scientific reports by the U.S. Global Change Research Program and the Intergovernmental Panel on Climate Change depict the present and future consequences of climate disruption in increasingly urgent terms.  At the same time, according to a new poll, record numbers of Americans believe that climate change is real, that it is human caused, and that it affects them personally. 

But there is good news.  It is possible for the U.S. to dramatically reduce greenhouse gas emissions.  We also have the legal tools to do the job—more legal tools, and a greater variety of tools, than we may have imagined. 

In 2014 and 2015, the Deep Decarbonization Pathways Project (DDPP)  published a technical report and a policy report on deep decarbonization in the United States—reducing U.S. greenhouse emissions by at least 80% by 2050.  The DDPP is a global effort to assess the technological and economic feasibility of deep decarbonization in 16 countries representing 74% of the world’s greenhouse gas emissions.

The U.S. reports conclude that “it is technically feasible” for this country to reduce its greenhouse gas emissions by 80% from 1990 levels by 2050.  They also conclude that the cost of this effort would only be one percent of U.S. gross domestic product, not including the many benefits that would come from doing so.   

Enormous changes would be required to achieve this level of reduction, the reports said.  The U.S. would more than double the efficiency with which energy is used.  Nearly all electricity would be carbon free or use carbon capture and sequestration.  Electricity production would also need to double because gasoline and diesel fuel for transportation, and oil and natural gas used for space heating and cooling and water heating, would be mostly replaced by electricity.  

These reports do not, however, discuss what legal tools would be necessary to achieve these outcomes.  In response, in late 2015, we began planning an edited volume to comprehensively analyze and explain the various laws that could be employed, building on the DDPP reports. The resulting book, Legal Pathways to Deep Decarbonization in the United States is being published by the Environmental Law Institute Press in March.  You can order a copy here.  In 35 chapters authored by 59 experts, adding up to 1,200 pages, the book identifies more than 1,000 federal, state, local, and private legal tools for deep decarbonization.   

To get the key messages of the book to the broadest possible audience, ELI has also published a Summary and Key Recommendations volume.  This book includes a thumbnail summary of each chapter, key recommendations by chapter, and a separate listing of recommendations organized by actor.  You can download this book here without charge.

Legal Pathways describes a dozen different types of legal tools.  As explained in greater detail here, these are not just the usual suspects (additional regulation, market-leveraging approaches, tradable permits or allowances), but also reduction or removal of legal barriers to clean energy and removal of incentives for fossil fuel use.  They also include information/persuasion, facilities and operations, infrastructure development, research and development, insurance, property rights, and social equity.  The wide range of types of legal tools provides great opportunity for building consensus.  One particularly important category, for example, is reduction or removal of legal barriers.

The book is thus a playbook for deep decarbonization.  In fact, various legal tools could be designed and combined to achieve quicker and deeper reductions than 80% by 2050, and even negative overall emissions.

This book is also a resource for lawyers because the laws it describes need to be proposed, drafted, and implemented on behalf of a wide variety of clients in many contexts.  The many types of tools also make clear that a variety of lawyers are important in this effort, including not only energy and environmental lawyers, but also finance, corporate, municipal, procurement, contracting, real estate, and other types of lawyers.

While both the scale and complexity of deep decarbonization are enormous, the book has a simple message: deep decarbonization is achievable in the United States using laws that exist or could be enacted. These legal tools can be employed with significant economic, social, environmental, and national security benefits.

Toward that end, we are launching a project to turn the recommendations into legal language—drafting federal and state statutes and regulations, model ordinances, guidance documents, transactional agreements, and the like.  We are well aware that a great many lawyers are already doing this kind of work, and that many more are feeling the need to respond to the challenges that climate disruption imposes.  We welcome lawyers from all backgrounds to join in our effort, and plan to work with ACOEL as well.  If you are interested, please contact us.

Carrying Coals to Newcastle … and Katowice

Posted on January 3, 2019 by Zach C. Miller

When Newcastle was the largest British exporter of coal, talk of “carrying coals to Newcastle” meant engaging in something senseless, superfluous, or foolish.  The Trump administration’s recent actions on coal use and climate change have taken the expression to new heights – or depths.

In June 2017, the Trump administration isolated the U.S. by making it the only country in the world to announce plans to withdraw from the 2015 Paris Agreement on climate change.  Last month the administration made things worse by its actions at the U.N. climate conference in Katowice, Poland – an historic, heavily polluted coal mining area.  Instead of joining the signatories to the Paris Agreement in negotiating the “rule book” for implementing that Agreement, the U.S. delegation presented a “side-event” (some say “side-show”) promoting the use of coal and fossil fuels.  Use of innovative, cleaner technologies to burn coal and fossil fuels would be laudable if combined with sound strategies to transition to cleaner, sustainable energy sources, but that was not the thrust of the side-show.  The coal “pep rally” in Katowice thus highlighted that the U.S., as represented by the current administration, is tone-deaf and no longer a leader in international climate discussions. 

The Trump administration staged a similar coal-booster event at the 2017 U.N. climate conference in Bonn, but with important differences.  In Bonn, U.S. representatives worked extensively with other countries on the Paris Agreement’s rule book, with an eye towards the U.S. possibly not withdrawing from the Agreement.  But most of the key Trump administration insiders who then favored staying in the Paris Agreement are now gone, including Secretary of State Rex Tillerson, national security advisor H.R. McMaster, energy adviser George Banks, and economic advisor Gary Cohn.  They’ve been replaced by Paris Agreement opponents:  Mike Pompeo, John Bolton, Wells Griffith, and Larry Kudlow.  As a result, the participation and influence of the U.S. in international climate discussions has become increasingly leaner, weaker and less relevant.

Meanwhile, at the G-20 Summit last month in Buenos Aires, countries led by France and China further isolated the U.S. when the Summit’s final communique stated that all 19 other countries “reaffirm that the Paris Agreement is irreversible and commit to its full implementation.”  The U.S. stuck out like a sore thumb by reiterating there its decision to be the sole nation to withdraw from the Paris Agreement, and instead touting “its strong commitment to economic growth and energy access . . . .”

These U.S. actions come directly on the heels of three significant studies, two from the Trump administration itself, that directly refute the administration’s positions.  The October 2018 Report of the U.N. Intergovernmental Panel on Climate Change warned that the world’s use of coal for generating electricity will need to be reduced dramatically by mid-century – from 40% down to 1-7% – to prevent catastrophic droughts, fires, floods, and storms resulting from climate change.  Then the recent report of DOE’s Energy Information Administration concluded that regardless of the climate debate, over 500 plants and 75 gigawatts of coal-fired power have been or soon will be retired and U.S. coal use is expected to continue to decrease (44% less than 2007 use), due mainly to market forces such as cheaper natural gas and renewable energy.  Finally, the November 26, 2018 Fourth National Climate Assessment – issued by 13 federal agencies and the Trump administration’s own White House – unequivocally states that climate change is already occurring, is partly caused by human activity, and must be urgently addressed to prevent catastrophic impacts.  President Trump’s only response to that overwhelming evidence from his own office: “I don’t believe it.” 

Why does this matter?  Two reasons.  First, if climate change is the severe and urgent problem virtually all climate scientists (and the White House’s own report) conclude it is, the failure of the U.S. to respond to it is an enormous and possibly irreversible blunder.  Second, taking such a position has caused the U.S. to cede its leadership role in the international debate on climate change and the design of creative and appropriate responses to it.  Because others – including China and Russia – are stepping into the resulting void and steering the direction of future actions in this and related environmental and economic fields, the U.S. may never recover that leadership role. 

The Trump administration’s Katowice side-show and similar superfluous actions may pander to the administration’s base.  But these senseless acts are merely “carrying coals to Newcastle” and accomplish nothing, while our most critical environmental problem goes unaddressed by the federal government.

The Rubber Begins to Hit the Road on Adaptation

Posted on November 6, 2018 by Seth Jaffe

I gave up some time ago on the idea that focusing on adaption was just a means of weaseling out of necessary measures to mitigate climate change.  As the extraordinary becomes commonplace, it’s evident that we’ve ignored the externalities of carbon longer than was prudent.

It’s thus great to see Boston’s Mayor Walsh release Resilient Boston Harbor.  Even for those who follow these issues for a living (and I have a personal stake, since my wife and I are about to move to Fort Point Channel, ground zero for climate change flooding impacts in Boston), what’s really amazing is the granularity of both the analysis and the recommendations.

If you want to understand just how granular the analysis must be in order to develop specific recommendations, you might take a look at this figure from the full Climate Ready South Boston report.  Don’t just skim the Executive Summary on this one.

I find this work both inspiring and discouraging.  There is so much to do.  Among other tasks, environmental lawyers have to figure out how to make these recommendations feasible in light of existing environmental regulations that would actually prevent implementation of some of the recommended adaptation measures.

I had thought of closing with a nice climate-inspired haiku.  Instead, I think I’ll leave you with this:

It is not your responsibility to finish the work of perfecting the world, but you are not free to desist from it either.

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.

Managing Interdependence in a World of Chaos

Posted on August 8, 2018 by Dan Esty

Managing interdependence in our complicated world of nearly 200 nations and thousands of other interests pushing and pulling on global policymaking is never easy. And yet the challenge of getting the world community to work together to solve problems remains urgent – especially for issues of inescapably global scope such as climate change. The international chaos of the past several weeks (with the U.S. President attacking allies, denigrating longstanding alliances, cozying up to autocrats, and brandishing tariff increases like a hotheaded D’Artagnan slashing his way through a Three Musketeers movie) shows just how fragile our collaborative regimes can be. Against this backdrop, the success of the 2015 Paris Climate Change Agreement in getting so many nations and so many others (including mayors, governors, and CEOs) to commit to a joint effort to reduce greenhouse gas emissions looks more amazing today than it did when the COP21 negotiations concluded three years ago.

Continued progress to address the threat of climate change cannot, however, be taken for granted.  Discord in one domain of international relations has a tendency to spill over into others.  Indeed, successful collaboration often depends on give-and-take across policy realms as well as within particular treaties or other cooperative endeavors. President Trump’s bellicose behavior on the international stage thus adds stress to the efforts to maintain momentum for climate change action – on top of the discord that he had already introduced by promising to pull the United States out of the Paris Agreement.

But the news from the climate change front is not all bad.  President Trump cannot actually remove the United States from the Paris Agreement until 2020 based on the accord’s carefully specified withdrawal provisions.  More importantly, the leadership slack is being taken up by others.  Not only have foreign leaders, such as Canadian Prime Minister Justin Trudeau and French President Macron, grabbed the climate change mantle, a whole series of mayors (including Anne Hidalgo in Paris and Frank Jensen in Copenhagen not to mention hundreds of municipal leaders across America) and governors (including Jerry Brown in California and Jay Inslee in Washington state) have ramped up their greenhouse gas emissions control initiatives. Indeed, nearly 3000 subnational leaders across all 50 U.S. states have signed on to the “We Are Still In” coalition, and their actions have kept the United States more or less on target to achieve the emissions reduction commitment set out by President Obama in the U.S. “nationally determined contribution” to the Paris Agreement.

So while the Trump Administration’s non-cooperative posture may yet slow down the global march toward a clean energy future, it may also hasten the creation of a new multi-dimensional structure of global climate change action – and a framework for managing international interdependence more generally -- capable of withstanding the President’s belligerence. With layers of state and local activities as well as national and global ones, supported by initiatives from the business community and many other non-governmental actors, the pace of progress need not falter. And the unintended gift of a more diverse and robust regime of global collaboration may well endure.

Von Humboldt's Gifts

Posted on August 6, 2018 by David B. Farer

Somehow I'd made it this far into my life without ever having heard of Alexander Von Humboldt.  Now, thanks to a wonderfully enlightening and beautifully written biography, I'm in a state of wonderment about this man.  (Thus the title of this blog, with apologies to Saul Bellow.)

The book is The Invention of Nature -- Alexander Von Humboldt's New World, by Andrea Wulf (Alfred A. Knopf, 2015; 473 pp.)

Von Humboldt (1769-1859) was a Prussian-born explorer and naturalist, a prodigious writer, a close friend of Goethe, friend and advisor to many including Thomas Jefferson and Simon Bolivar, inspirer of Charles Darwin (who took a copy of Humboldt's Personal Narrative with him on the Beagle), Henry David Thoreau, John Muir and many, many others.

As a young man, he undertook a five year, groundbreaking exploration of the Americas from 1799 to 1804 (spending much of that time in Latin America, including a year in Venezuela alone), and in 1829, at age 60, undertook another arduous expedition in Russia and Siberia.

As early as the 1790s, he was documenting the impacts of deforestation and deleterious agricultural practices and speaking plainly of the consequences; namely, climate change. During his lifetime, he encouraged climate studies around the world.  He investigated the interconnectedness of volcanos around the globe, of global weather patterns (inventing isotherms along the way), compared rock strata across the earth, and studied the negative impacts of human activity on the balance of nature.

Andrea Wulf delves into Von Humboldt's life in a lucid and engaging manner, documenting his origins, his development as an individual steeped in both science and the arts, his bold, groundbreaking expeditions, the development of his ideas and their exposition in his many books, his dramatic impact on others and the spreading and further development of his ideas by those who followed.

Wulf notes that his contemporaries described him as "the most famous man in the world after Napoleon," that aside from his numerous books and studies, he wrote on the order of 50,000 letters and received at least double that, and at the same time helped advance the careers and travels of fellow scientists and explorers.

Goethe, Wulf writes, compared Humboldt to a "fountain with many spouts from which streams flow refreshingly and infinitely, so that we only have to place vessels under them."

In 1834, at the age of 65, he began the book he intended to bring together everything he had been studying about nature. The first volume was published in 1845, and he named it Cosmos.  A Sketch of the Physical Description of the Universe, drawing the title from the Greek word for "beauty" and "order."

It became an instant best seller in its original German version, and was translated into ten other languages in the following few years.

"Cosmos," Wulf writes, "was unlike any previous book about nature.  Humboldt took his readers on a journey from outer space to earth, and then from the surface of the planet to its inner core.  He discussed comets, the Milky Way and the solar system as well as terrestrial magnetism, volcanoes and the snow line of mountains."

By the 1850s, his portrait hung "in palaces as remote as that of the King of Siam in Bangkok," and "his birthday was celebrated as far away as Hong Kong."

Wulf describes that John Floyd, the U.S. Secretary of War, "sent Humboldt nine North American maps that showed all of the different towns, counties, mountains and rivers that were named after him," and noted that thought had been given to renaming the Rockies as "Humboldt Andes."

He was mourned around the world upon his death in 1859, and then ten years later, on the centenary of his birth, there were celebrations from Australia to America, including commemorations and parades in many of the major cities of the U.S.

And yes, the Humboldt Current and hundreds of plants and animals are also named after him.  Wulf even documents that the state of Nevada was nearly named after Von Humboldt.  Yet as Wulf describes and then sets out to change, he has been nearly forgotten in the English-speaking world outside of academia.

It's a great read; stimulating, inspiring and a finely told life of a great man.

Fear of Forward Looking Statements: Climate Reporting and the TCFD

Posted on July 18, 2018 by Christopher Davis

Risks relating to climate change are becoming increasingly material to companies in a broad range of sectors, to investors who own their shares, to banks that lend to them, to insurers that insure them, to communities where they operate, and to regional and global economies. Climate-related factors including energy transition from fossil fuels to renewables, extreme weather events and water scarcity are having increasing impacts. As a result, climate-related disclosure has become a hot topic, or should be, as companies are required by the Securities and Exchange Commission (SEC) and other regulators to disclose their material climate-related risks.

In the wake of the 2015 Paris climate agreement, the Task Force on Climate-Related Financial Disclosures (TCFD) was created by the G20’s Financial Stability Board in 2016 to develop consistent, voluntary standards for companies, investors and insurers to report climate-related financial risks and opportunities. The task force was chaired by Michael Bloomberg, and comprised of 32 members from major global corporations, financial institutions, corporations, accounting firms, credit rating agencies and other organizations. The TCFD issued a final report presenting its Recommendations [insert link] for such disclosures in June 2017. The Recommendations have been endorsed by more than 250 companies, banks, institutional investors, insurers and other organizations.

The TCFD Recommendations focus on two kinds of financially material climate-related risks: transition (legal/policy, technology, market, reputation) and physical risks. They call for disclosures in four areas: (1) Governance of climate-related risks and opportunities, (2) Strategy for identifying and addressing climate-related impacts, (3)  Risk Management measures to assess and manage relevant risks, and (4) Metrics and Targets including reporting Scope 1, 2 and 3 greenhouse gas emissions and metrics and targets to measure and manage them.

While the TCFD Recommendations have garnered considerable attention and support, notably from institutional investors, relatively few companies have so far committed to report in accordance with the Recommendations. There are various reasons for this, including inertia, cost and advice from inside and outside counsel about the purported liability and competitive risks associated with the kinds of forward-looking statements called for by the Recommendations. Indeed, disclosures consistent with what the TCFD recommends would be much more substantive, revealing and useful than the generic boilerplate disclosures of climate and other environmental risks that commonly appear in SEC filings.

Corporate counsel often provide conservative advice on disclosures in SEC and other mandatory corporate financial reporting. Federal securities laws provide corporate issuers with safe harbors for forward looking statements (typically focused on projections of future financial results) where accompanied by meaningful cautionary statements. Also relevant here is the SEC’s 2010 “Guidance Regarding Disclosure Related to Climate Change,” which highlights mandatory reporting requirements under SEC Regulation S-K for financially material climate-related risks, including the impact of legislation or regulation, international accords, indirect consequences of regulation or business trends, and physical impacts.

While caution and risk aversion are hallmarks of typical legal advice, I would argue that good, thoughtful disclosures consistent with the TCFD Recommendations are likely to have a range of benefits to the disclosing companies, and limited risks. Doing the internal work across disparate corporate functions necessary to address the TCFD Recommendations will improve a company’s understanding and management of evolving climate-related risks and opportunities. Good, meaningful disclosures require homework that underpins good corporate governance, risk management and strategic planning. What gets measured gets managed, and the TCFD Recommendations call on companies to assess and manage climate risks and opportunities, and to report to stakeholders on how they are approaching these issues.

Companies responding in a timely and effective way to the accelerating economic and physical changes brought by climate change can be expected to have a competitive advantage over their peers that fail to do so. Likewise, companies that meaningfully and credibly disclose how they are responding to material climate risks and opportunities, as called for by the TCFD, should enjoy a competitive advantage over their competitors who do not. A range of stakeholders (including current and prospective customers and employees) are likely to respond more favorably to companies that make a good faith effort to comply with evolving best practice disclosure standards. The likelihood of being sued for securities fraud based on such well-grounded climate disclosure seems low. By contrast, the risks of successful claims of non-disclosure and misleading disclosure for companies that fail to meaningfully disclose climate-related risks affecting their business seem quite real, as suggested by the investigations of ExxonMobil’s climate-related disclosures. The market generally rewards leaders that, to paraphrase hockey great Wayne Gretsky, are skating to where the puck is going rather than where it has been, and are early responders to global megatrends like climate change.

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.

“To Count or Not to Count, That is the Question”

Posted on June 28, 2018 by Jeff Civins

“To count or not to count”--greenhouse gas (“GHG”) emissions--was a question facing both the Bureau of Land Management (“BLM”) and the US Forest Service (“USFS”), in deciding whether to lease 13 parcels of federal mineral estate in Santa Fe National Forest in New Mexico for oil and gas production, and the federal district court in New Mexico, on an appeal of those agencies’ joint determination to lease those parcels.  The appeal, filed by plaintiff citizen groups, in San Juan Citizens Alliance v. United States Bureau of Land Management, No. 16-cv-376-MCA-JHR, D. NM (June 14, 2018), asserted a number of violations of the National Environmental Policy Act (“NEPA”) based on, among other things, the agencies’ alleged failure to take a hard look at direct, indirect, and cumulative impacts of oil and gas leasing.  The GHG emissions in question related to those that would result not from the production of oil and gas from the leases, but rather from the consumption of that production--and the resulting climate change impacts of those emissions.  The court answered yes to the question of whether to count those emissions, but its determination raised another question--what difference would or should counting those GHG emissions make.

Operating under a memorandum of understanding, the USFS and BLM jointly manage oil and gas leasing on federal forest land, with the USFS regulating the surface and the BLM, the subsurface.  The USFS identifies specific lands to be offered for lease; the BLM provides a reasonably foreseeable development scenario.  If the UFS consents to leasing, it may include conditions; BLM may then issue competitive leases.  The leases here were issued after protracted administrative proceedings, which included the USFS’s preparation of an environmental impact statement and supplement that supported the permitting of oil and gas leasing and which culminated in the BLM’s issuance of a Decision Record and Environmental Assessment approving the parcels for lease, which “tiered to” the USFS environmental studies.

Plaintiffs argued that the agencies “failed to take a hard look at direct, indirect, and cumulative impacts of oil and gas leasing” before making an irretrievable commitment of resources.  Regulations of the Council on Environmental Quality, at 40 CFR Part 1500, define the pertinent terms.

Direct effects” are “caused by the action and occur at the same time and place” while “indirect effects” are effects that “are caused by the action and are later in time or farther removed in distance, but are still reasonably foreseeable.” A “cumulative impact,” on the other hand, is an “impact on the environment [that] results from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions regardless of what agency … or person undertakes such other actions.” “Cumulative impacts can result from individually minor but collectively significant actions taking place over a period of time.” 

BLM’s Decision Record explained that the agency was evaluating only GHG emissions associated with exploration and production of oil and gas (estimated to be 0.0018% of the US’s total GHG emissions), because the environmental impacts of GHG emissions from consumption of that oil and gas, e.g., refining and consumer-vehicle combustion, were not direct effects and neither were they indirect effects because production was not a proximate cause of GHG emissions resulting from consumption.  BLM argued, however, that emissions from consumption were accounted for in the cumulative effects analysis. 

The Decision Record explained:

The very small increase in [GHG] emissions that could result from approval of the action alternatives would not produce climate change impacts that differ from the No Action Alternative. This is because climate change is a global process that is impacted by the sum total of [GHG] emissions in the Earth’s atmosphere. The incremental contribution to global [GHG] from the proposed action cannot be translated into effects on climate change globally or in the area of this site-specific action. It is currently not feasible to predict with certainty the net impacts from the proposed action on global or regional climate.

The Air Resources Technical Report discusses the relationship of past, present and future predicted emissions to climate change and the limitations in predicting local and regional impacts related to emissions. It is currently not feasible to know with certainty the net impacts from particular emissions associated with activities on public lands.

The Air Resources Technical Report noted that the BLM did not have the ability to associate an action’s contribution in a localized area to impacts on global climate change,” but may do so in the future when “climate models improve in their sensitivity and predictive capacity.” 

In its review of the agencies’ record, the court noted “neither the Record Decision nor its tiered or incorporated documents estimate the potential greenhouse gas emissions from consumption of the oil and gas produced by wells developed on the leases, nor do they discuss the potential impacts of such emissions. “  The court concluded that the failure to estimate the amount of GHG emissions resulting from consumption of the oil and gas produced as a result of development of wells on the leased areas was arbitrary and required that BLM reanalyze the potential impact of such greenhouse gases on climate change in light of the recalculated amount of emissions in order to comply with NEPA.

For that reason, the court remanded the case to the BLM to address this error and to consider whether, based on that reanalysis, its mitigation analysis needed to be revised as well.  The court reasoned that GHG emissions from the consumption of oil and gas were an indirect effect that BLM should have considered, citing Sierra Club v. Fed. Energy Regulatory Comm’n, 867 F.3d 1357, 1374 (D.C. Cir. 2017), and found that BLM also did not adequately consider the cumulative effects of those emissions, together with other emissions.

The question raised by this case, and Sierra Club v. FERC, which the court cites, is how helpful the analysis of indirect and cumulative effects will be to the agency in its decision-making and could or should that analysis result in the selection of a different alternative or in requirements to mitigate. As a practical matter, given the global nature of the concern posed by GHG emissions and the relatively small contribution of the activity under review, is there an expectation that an agency will make meaningful changes in its decision-making as a result of any required reanalysis? So perhaps the question should be not whether to count or not to count, but rather, “What difference would or should counting make?”And, perhaps an even more salient question is, as a policy matter, should concerns posed by GHG emissions be better addressed through legislation and rulemaking rather than by imposing constraints on an ad hoc basis?

HOW WILL WE COPE WHEN DAY ZERO ARRIVES IN A U.S. CITY?

Posted on June 21, 2018 by Eileen Millett

While those of us here in the northeast have been wringing out soggy clothing, using umbrellas as an essential feature of our wardrobes, praying for sun, and genuinely wondering if the long hot days of summer will ever truly be with us, residents of Cape Town, South Africa are experiencing the opposite dilemma.  Although recently the situation began to improve, Cape Town is suffering through one of the longest and driest spells in its history, and could be the first major city to run out of water.   They could come face to face with Day Zero when no water comes from the taps.

Cape Town, named one of the world’s best places to visit by the New York Times and Britain’s Daily Telegraph, is Africa’s third main economic hub, and until the gold rush development of Johannesburg, was the largest city in South Africa. It is alive with multi-million dollar beach front homes, art museums and two of the world’s top 50 restaurants.  The city could now have another distinction.  Despite reducing its water use to half, announcing three new desalination plants, and residents taking 90-second showers, it will take years to normalize  the extended drought its residents have suffered through.   Cape Town is suffering from a three-year drought the likes of which haven’t been seen in a century, as the city has become warmer and drier.

We take water’s existence for granted.  When we turn on the tap, it better be there, and it better be drinkable.  Water quality and less water quantity have been front and center in deliberations about water management.   Flint, Michigan brought us to the battle zone at the mouth of the Flint River, and demonstrated the ramifications head-on of high levels of lead in drinking water.  Lack of proper treatment, exposure and yes, environmental justice issues were at the fore.  Obviously, we care about what is in our drinking water, but we don’t give much thought to whether or how much water is readily available.  Little has prepared us for the day when the amount of water flowing from our faucets will be limited to a few hours a day, if even we have access to water at all. 

Not so the case in Cape Town, South Africa, a coastal paradise, responsible for 10% of Africa’s GDP, where residents have been living with the ramifications of severely limited supplies of water, and where this thriving metropolis of 4 million is poised to become the first major city in the world to completely run dry.   They have little choice but to prepare and to live with the crisis.  Can we afford to dismiss Cape Town as an outlier or should we be preparing for a Day Zero closer to home?

Population growth and urbanization, combined with drought, a natural climate phenomenon or a feature of climate change, depending on your point of view, has pushed Cape Town to a 2019 Day Zero countdown clock, but has not resulted in its being able to avoid Day Zero entirely — a day when the doomsday scenario occurs and the taps run dry.  Earlier this year, Day Zero had been predicted to fall on May 11, 2018, the day when taps in all homes and businesses would be turned off, and when Cape Town’s 4 million residents would have had to line up for water rations.  Cape Town residents are now forced to subsist on 13 gallons of water a day.  Exceeding the daily water limit results in fines.  Residents and tourists alike are implored to recognize the water crisis and to conserve.  This means taking extreme measures on a daily basis, like taking 90-second showers, drinking a half gallon of water, utilizing only one sinkful to hand wash dishes or laundry, having water for one cooked meal, two hand washings, two teeth brushings and one toilet flush.   The 13-gallon limit is less than the minimum U.N. daily recommendation for domestic needs.

Tragically, Cape Town’s looming problem might have been avoided if only there had been better planning, better crisis management and no drought.  To be fair, Cape Town did undertake a program to fix old and leaky pipes, to install meters and to adjust tariffs.  The city did not, however, look for new water sources.  Cape Town depends on water from six dams that are rainfall dependent, and now stand at just over 25% of capacity.  Depending on these dams as a limited source has been exacerbated by the city’s population growth swelling by upwards of 30% in the last decade, with most of that growth in the city’s poorer areas that actually consume less water.  And therein lies one of the realities of South Africa’s sad apartheid legacy — extraordinary inequality and concentrated wealth and privilege.  Folks in the more affluent area of the city can access privately maintained water tanks and pools for their water needs.  Pools provide a built in bathing option and an emergency water supply.

With only about half of the residents reaching the 13 gallon a day target, most consider a shut-off inevitable.  It is not a question of if, but how the city will make water accessible and prevent anarchy.  In poorer parts of the city, people share communal taps and carry water buckets to their homes.  With the clock ticking, Capetonians are sharing water-saving tips — don’t boil food, bake it or grill it; use paper plates; order pizza and eat it from the box; use water collected from showing to wash clothes, use grey water to flush toilets, and more.

Recent rainfall in Cape Town will help to normalize the situation, but the city has not averted the crisis.  Closer to home the condition of the Rio Grande in New Mexico reflects a broader trend in the west, where greenhouse gas emissions have made wet years less wet and dry years even drier.   So although conservancy districts store water in reservoirs, once that water is drained, if there are no summer rains, farmers will face an uncertain future.  Despite the northeast’s rainy spring and general good fortune with water reserves, there are lessons to be learned from our neighbors to the west, and very far south on a different continent.

Places

Posted on June 20, 2018 by Jonathan Z. Cannon

On vacation on Sanibel Island, FL, three hour’s drive from the central Florida town I grew up in, I’m thinking about place.  When I vacationed here as a child, Sanibel was a sleepy island, with primitive bungalows for tourists, insatiable hordes of mosquitoes, mephitic drinking water, and glorious shell beaches, refreshed daily by the tides. Like most of Florida’s West Coast, Sanibel has undergone a sea change since then, transformed into a high-end resort community with luxury accommodations and expensive homes – and, yes, points of public access to the beach. There’re fewer good shells, because so many more people are hunting them.

A visitor from the early days might say the island had been spoiled, but in fact people who cared about Sanibel and its sister island, Captiva, worked to protect it even as it morphed under intense development pressure. The local land trust, the Sanibel-Captiva Conservation Foundation (SCCF), begun in 1967 with the first flush of the modern environmental movement, is the largest private landowner on the islands and manages over 1200 acres of conservation lands on Sanibel and another 600 on Captiva. That’s in addition to the conservation lands managed by the State of Florida and the U.S. Fish and Wildlife Service, which include the 6400-acre J. Ding Darling Wildlife Refuge. Established in 1945, through the efforts of J.N. “Ding” Darling, a Pulitzer-prize winning political cartoonist and conservationist who kept a winter home on Captiva, the refuge protects a part of “the largest undeveloped mangrove ecosystem in the United States” and “spectacular migratory bird populations.”

We all live in places, vacation in places; we care about them –their people and their nature. There are over 1300 active land trusts in the United States, most of them local or regional. These organizations protect and manage over 56 million conservation acres largely though private donations.  Local governments protect additional land through easement acquisition programs, open space zoning, and protections for ecologically sensitive areas. These actions go on largely under the radar of the divisive politics that infects national environmental and natural resource policy. There are still conservatives and liberals, Republicans and Democrats in these local settings, but they are joined by a common interest in their place – the qualities that make that place worth living in for everyone.  This common commitment is more elusive at larger geographic scales, where red and blue segregate along lines of rural/urban, coast and heartland.

The power of place to mobilize action to protect and defend is no panacea for environmental ills. Rootedness in place can cause people to overlook the larger consequences of their actions, as in NIMBY cases. It also may fail to be an effective motivator for addressing issues at larger scales, such as climate change. But there’s evidence that politically diverse communities that are seeing the effects of global change, such as cities and counties in Southern Florida, are moving toward meaningful climate change policies – with both adaptation and mitigation components. A common threat to “home” might help lift even climate change into the realm of common commitment.

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.

Paving a Legal and Regulatory Path to America’s Clean Energy Economy

Posted on May 30, 2018 by Kenneth Berlin

A clean energy revolution is underway in this country, buoyed by market forces making renewable energy sources increasingly cost-competitive with fossil fuels. Wind and solar are now cheaper than coal and natural gas in much of the country, and their costs will continue to drop. This stunning decrease in the price of wind and solar generation has created a new paradigm in the energy industry.

Similarly, the cost of energy storage is falling fast, and batteries will soon eliminate – at fully competitive prices – the intermittency issues around wind and solar. Meanwhile, electric vehicles are projected to become both cheaper to purchase and cheaper to run than gasoline cars by 2025.

Despite these extremely favorable economic trends, legal and regulatory barriers that protect fossil fuels continue to slow the transition to a clean energy economy. Removing these obstacles is a critical step toward securing a clean, safe and prosperous future.

At the outset, new clean energy projects face potential challenges around siting and transmission, including permitting restrictions, utilities’ unwillingness to enter into the necessary contracts, and a lack of support from public officials.

Once a project has cleared those hurdles, additional legal, regulatory and policy barriers may remain. Some of the primary impediments include:

o   Non-existing, limited, or even preventative legal frameworks for independent power producers – like homeowners – to sell energy to utilities or third parties. These power purchase agreements are currently allowed in only 26 states, the District of Columbia and Puerto Rico.

o   Utility interconnection, or connection of home or commercial renewable energy systems to the regional grid, that may be limited or severely restricted by regulation or laws.

o   Lack of or insufficiently priced net metering policies that make renewable investments much less attractive. In 2016, for example, Nevada’s Public Utilities Commission (PUC) sought to triple fees for solar customers while at the same time reducing credit for net excess generation by approximately three-quarters. After pushback from solar manufacturers and installers, as well as the prospect of hundreds of solar jobs leaving the state, the PUC approved new rules, partially restoring the net metering rate.

o   Tariffs on components of renewable energy systems like those recently announced by the Trump Administration on solar panel imports.

These obstacles don’t even touch on the fact that fossil fuel companies are not held financially responsible for the global warming pollution they dump into our shared atmosphere, leaving everyday Americans to foot the bill for these extraordinary health and economic costs. They also don’t factor in the uneven playing field that well-funded lobbyists tilt in favor of the fossil fuel industry, including enormous government subsidies.

The good news is that many individuals and organizations are working to build the political support needed to remove these barriers, including my organization, The Climate Reality Project, and our Founder and Chairman, former US Vice President Al Gore.

With enough voices working together across many sectors, we can eliminate these challenges and allow market forces and popular support to usher in a new clean energy economy.

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.

THE GREAT LAKES OF NORTH AMERICA AND THE GREAT BARRIER REEF OF AUSTRALIA; MORE IN COMMON THAN ONE MIGHT THINK

Posted on April 18, 2018 by David Ullrich

Although separated by over 8,000 miles and representing vastly different ecosystems, the Great Barrier Reef of Australia and the Great Lakes of North American share much in common.  As globally significant resources, they not only help define the countries so fortunate to host them, they are major contributors to the social, economic, and environmental vibrancy of their cultures.  They are both very big and visible from space, with the Great Lakes having well over 10,000 miles of shoreline and the Great Barrier Reef stretching over 1200 miles of coast in Queensland.  At the same time, many similar challenges face the communities that are charged with the stewardship of the resources to make sure their integrity is preserved for future generations.

At the top of the list is climate change.  For the Great Barrier Reef, the warmer ocean temperatures have resulted in significant bleaching events over the past twenty years and have caused damage to major portions of the Reef, although much of its beauty remains intact. The increase in severity and intensity of cyclones has also caused major physical damage to the Reef all up and down the coast of the Coral Sea.  As the storms travel inland with heavy rains, the runoff from agriculture brings vast quantities of sediment and nutrients to the nearshore areas of the Reef.  The siltation can smother the coral and the nutrients are thought to contribute significantly to the explosion of the indigenous crown of thorns starfish that attack and destroy coral. 

Climate change is also putting extensive stress on the Great Lakes.  The warmer temperatures are leading to less ice cover, more evaporation, and lower lake levels.  However, the more frequent and intense rainfall events are putting more water back into the system.  Experts differ on the long term implications.  In the short term, lake levels seem to be going up and down more rapidly and to a greater degree than before, leading to navigational and erosion problems.  In addition, the heavy rains have increased nutrient runoff from agriculture and urban areas, leading to alarming algal blooms and drinking water crises like those in Toledo, Ohio and Pelee Island, Ontario on Lake Erie.  The nutrients also contribute to the formation of low oxygen dead zones that can result in fish kills.  In addition to climate change, the battle against invasive species such as sea lamprey and zebra and quagga mussels seems endless, while grass, silver, bighead, and black carp continue as major threats to the $7 billion fishery of the Great Lakes.

As strategies and approaches to dealing with these challenges are developed in Australia, Canada, and the United States, we would be well served to share ideas with one another on how best to meet them.  We have a tremendous responsibility as stewards of these global treasures to protect and preserve them for future generations.  It would be a tragedy to be resigned to renaming them the “Pretty Good Barrier Reef” and the “Pretty Good Lakes.”

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.

The Power of Pension Funds: How to Win Friends and Influence Others

Posted on March 6, 2018 by Gail Port

While both tout their desire to reduce the State’s carbon footprint and address climate change,  New York Governor Andrew Cuomo and State Comptroller Thomas DiNapoli have  their differences when it comes to  New York State pension fund’s fossil fuel investments.   

The New York state pension fund (known as the New York State Common Retirement Fund) is the third largest pension fund in the United States, with an audited value as of March 2017 of $192.4 billion in assets.  The pension fund holds and invests assets of over one million state and local government employees, retirees, and beneficiaries. At issue are holdings of at least 50 oil and gas companies with significant carbon-intensive operations.  Comptroller DiNapoli is the sole trustee of the pension fund, and is advised by several independent advisory committees.

DiNapoli is under pressure from Cuomo, State Senator Liz Krueger, and certain environmental groups to divest the pension fund from fossil-fuel investments.  DiNapoli has pushed back on immediate divestment on several grounds, most importantly, that as a fiduciary his first priority is to earn a good return for the approximately 1.1 million New Yorkers who rely on the state pension system for their retirement security.  While recognizing that the effects of climate change represent a systemic risk to the returns of the pension fund, the economy and the welfare of the people of the State, DiNapoli believes that he can be more effective in managing those systemic climate change risks by the use of the significant power of the pension fund to influence the policies of oil and gas companies.  That includes shareholder activism (i.e., filing shareholder resolutions), voting proxies, investor collaborations and corporate engagement programs.

On the latter point, Comptroller DiNapoli has cited ExxonMobil’s agreement to implement a shareholder proposal, co-filed by the state pension fund and the Church of England, which caused ExxonMobil to agree to assess how it might be impacted by the Paris Agreement goals to reduce global warming. Duke Energy has responded to a similar shareholder resolution seeking to require it to analyze how the Paris Agreement will impact its business and plans to produce a climate risk assessment in the first quarter of 2018. DiNapoli asserts that because these oil and gas companies will not go out of business as a consequence of divestment of the pension fund’s holdings, he can be more effective by having a seat at the table as a shareholder to influence companies’ actions and disclosures.  Critics of this view, including State Senator Krueger, believe the shareholder influence is limited and that divestment sends a stronger message than does the Comptroller’s more nuanced and varied approach. 

Another investment strategy recently employed by the Comptroller was to double the pension fund’s investment-- to $4 billion-- in a low-emissions index designed by Goldman Sachs Asset Management.  That index is more geared toward stocks, such as Apple Inc. and Microsoft Corp., than higher carbon-emitters, such as ExxonMobil and Chevron.  DiNapoli has said that since 2016 the Goldman Sachs designed index has delivered returns comparable to the Russell 1000, thereby yielding strong investment returns with the benefit of significantly reducing the carbon footprint associated with that investment.

Although DiNapoli has expressed reservations about allowing pension fund investments to be influenced by political forces, he recently agreed to join forces with Governor Cuomo and others on decarbonization strategies for the pension fund investment portfolio.  While there are no immediate plans to divest the energy holdings of the pension fund, DiNapoli and Cuomo have agreed to create an independent advisory committee to develop a low carbon future roadmap for the fund.  In his January 2018 State of the State Address, Cuomo called for an end to fossil fuel related activities in the pension fund and stated his intent to work with DiNapoli so New York can “put our money where our mouth is.” Cuomo then asked for a round of applause for Comptroller DiNapoli and his efforts.

Regardless of whether DiNapoli takes immediate moves to decarbonize the portfolio, the movement towards divestment is gaining momentum. California ended its pension fund investments in coal companies in 2015 and is facing pressure to decarbonize its portfolio. On January 10, New York City Mayor Bill de Blasio and Comptroller Scott Stringer announced that NYC plans to divest its five pension funds from fossil fuel investments, which will be the largest divestment of any municipality to date. Stringer stated, “[T]his a first-in-the-nation step to protect our future and our planet – for this generation and the next. Safeguarding the retirement of our city’s police officers, teachers, firefighters and city workers is our top priority, and we believe that their financial future is linked to the sustainability of the planet.” De Blasio and Stringer were praised by environmental activists after the announcement and by State Senator Kruger who continued her call for State Comptroller DiNapoli to follow suit with respect to the New York State pension fund investments.

Lots of good intentions, lots of ideas and a bunch of strange bedfellows--only time will tell if these investment (and divestment) initiatives will continue to gain traction and make a difference. And what about us-- shouldn’t we too be employing low-emissions/decarbonization investment strategies with our portfolios?

If Jimmy Fallon Was an ACOEL Member, Here is What He’d Sing

Posted on March 1, 2018 by Jeff Thaler

While many in Philadelphia were in the streets after the end of Super Bowl LII, and New Englanders promptly went to bed after the last pass hit the Minneapolis turf, the Doppelgänger of a native-born Minnesotan made a national appearance in the middle of that long, cold night.

By now, many have seen the 2018 version of “The Times They Are a-Changin,’” performed by someone born 10 years after the original version was created—one Jimmy Fallon. According to my consultation with Dr. Google, the only time Mr. Fallon has talked about environmental issues was back in May 2016 when he did a segment on Sarah Palin, climate change and climate scientists.

Therefore I think it is time that ACOEL commissioned Mr. Fallon to perform an updated version of that and another Dylan song, ones many of us could probably sing by heart (with a refresher class) even though written in the early ‘60s—that pre-NRDC/CAA/CWA/ESA/et.seq. classic, “Blowin’ in the Wind.” The original lyrics for both songs need to be refreshed, as do all of us who were alive and kicking back then, so here they are:

The Times They Are A-Changin'

Come gather ’round people                                                       

Wherever you roam                                                                           

And admit that the waters                                                               

Around you have grown                                                               `                   

And accept it that soon                                                                     

Under water will be our coast and flood zones                       

If our kids’ future to you is worth savin’                                   

Then you better start swimmin’                                                  

or you’ll sink like a stone                                                              

For climate times they are a-changin’

 

Come federal and state legislators

Please heed the call

Don’t stand in the doorway

Don’t block up the hall

For those who should be ashamed

Will be those who have stalled

Weather extremes are outside and they’re raging

Floods, fires and storms will break down your walls

For climate times they are a-changin’

 

Come bloggers, reporters, and skeptics

Throughout the land

Please don't criticize

What you refuse to understand

Rising CO2 levels and temperatures

Are getting beyond our command

Your old fossil-fueled road is

Rapidly agin'.

Please embrace a clean energy new one and

Vote out of office resisting government hands

For climate times they are a-changin'.

 

Blowin’ in the Wind

How many droughts & fires must the world endure                                  

Before we know they are a warning?

Yes and how many seas must flood our shores                        

Before we seek a solution?                                                           

Yes and how many times must the fake news fly                     

That climatic disruption is not real?                                                

The answer my friend is blowin' in the wind                              

The answer is blowin' in the wind.                                                    

 

How many years will our beaches and airports exist

Before they are washed into the sea?

Yes and how many years can the glaciers survive

Before they are just memories?

How many heads must be buried in the sand

So that people can deny what should be seen?

The answer my friend is blowin’ in the wind

The answer is blowin' in the wind

 

How many more years must we create greenhouse gases

Such that too many species can’t survive?

Yes and how many times will clean energy projects be held up

Before too many people have died?

How can we power our cars, lights and heat pumps

Without harming the world for our kids?

The answer my friend is blowin' in onshore winds

The answer is blowin' in offshore wind.

 

So break out your harmonicas and guitars, and we will sing the songs of climate changes while working to change our laws and policies for the benefit of all.

Troubled Waters – Blue Lakes Turning Green From Toxic Algal Blooms

Posted on February 6, 2018 by Virginia C. Robbins

Frank DeOrio knows a lot about protecting drinking water.  For more than 25 years, Frank was Director of Utilities for the City of Auburn located in the pristine Finger Lakes region of Upstate New York.  He was responsible for the water supply drawn from Owasco Lake and the protection of the lake’s watershed.  During Frank’s tenure, the City won awards for the best water in the state and the U.S. 

Frank and I recently discussed his concerns about the potential impacts to drinking water from summer algal blooms in our region’s lakes.   Algal blooms can occur when spring rains flush nutrients, for example, phosphorous, into waterbodies.  Summer temperatures raise water temperatures, creating optimum growth conditions.    

Owasco Lake, September 18, 2017

Owasco Lake, September 18, 2017

Summer algal blooms now occur in more lakes, their duration has increased, and they are producing toxins that pose health risks to the public when ingested or during recreational contact.  These toxins are not easily treated by water suppliers because the technology to treat one toxin may not be effective for another.  And unlike bacteria, boiling water does not remove these toxins. 

In 2017, harmful algal blooms (HAB) occurred in all 11 of the Finger Lakes, reportedly for the first time.  Blue-green algae are cyanobacteria and they can produce several species of cyanotoxins.  What is disturbing about the recent HAB outbreaks is that some classes of these cyanotoxins (e.g., microcystins), are particularly toxic.  If present at high concentrations, they can be difficult or impossible to treat using the technology of most public water systems.  One of these is Microcystin-LR, a liver toxin that is considered one of the more toxic.  These toxins can also cause skin, digestive system and other health issues.

Mycrocystin-LR has been identified in raw water drawn from Owasco Lake and Skaneateles Lake, both jewels of the Finger Lakes.  And Owasco Lake provides drinking water to more than 50,000 customers.  In 2016, the City of Auburn was using filtration to treat its raw water.  When the level of Mycrocystin-LR increased, the City considered moving the location of its water intake away from the area of the lake containing the toxin.  But would the new intake remain safe if the toxin shifted location?  The City decided against moving the intake and instead added carbon filtration. 

Skaneateles Lake is the primary water supply for the City of Syracuse and surrounding communities.  The water authority operates under a “filtration avoidance” authorization.  After a severe storm on July 1, 2017, phosphorous levels in the lake rose, resulting in algal blooms, and Microsystin-LR was then detected in the raw water pumped from the lake.  The levels were low enough that treatment was not required and the toxin was not identified in the water that reached customers.  Nonetheless, the presence of this toxin in the raw water is a disturbing development. 

These examples are lakes in my area.  But similar algae toxins and blooms are occurring in New England states, including New Hampshire and Maine. 

The broader challenges?  The science around algae toxins is emerging.  Further, there are no federal or state drinking water standards for microcystins (though there are health advisory guidelines published by USEPA and some states).  Water treatment plants are generally designed to avoid taste and odor concerns and to manage the most commonly tested algae toxins.  The next generation of plants will need to have more flexible designs to accommodate advanced treatment technologies.  And water authorities will need to consider spatial needs, hydraulics, connections, utilities and process control for these technologies. 

Frank’s concerned.  So am I.  It may get worse before it gets better.  While we wait for science, regulatory efforts and focused treatment technology to develop, at least municipalities can take steps to control the potential for toxic algal blooms by a combination of runoff control, nutrient reduction and stream-bank restoration.  Why wait to build that bridge from troubled waters to cleaner lakes?

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.

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.