Bovine Emission Source Category? Or… What to do About Farting Cows

Posted on March 7, 2016 by Donald Stever

A recent BBC report about the enormous Aliso Canyon Gas Storage Facility gas well leak in California caught my eye. It compared the huge volume of methane emitted from this leak to other greenhouse gas sources, including tons of methane emitted by a large number of cows. Cows? A 2006 United Nations’ Food and Agricultural Organization report claims that the livestock sector, most of which is comprised of cattle, “generates more greenhouse gas emissions as measured in CO2 equivalent – 18 percent – than transport.” According to a Danish study, the average cow produces enough methane per year to do the same greenhouse damage as four tons of carbon dioxide. EPA’s Inventory of U.S. Greenhouse Gas Emissions and Sinks contains a statement that, on a global basis the Agriculture sector is the primary source of methane emissions.

This got me thinking about industries and lifestyles as yet largely untouched by the need to address global climate change. Agriculture, including ranching, may be a mainstay of the US economy but we can no longer ignore its impacts on the planet. It is not environmental elitism to require farting cows – a fertile source of humor - be given serious attention in the climate change debate.

Throughout the history of environmental regulatory legislation and enforcement in the United States, conventional agriculture has, by and large, been given a pass. For example, section 404 F of the Clean Water Act exempts from the requirement to obtain a permit the discharge of dredged or fill material into waters of the United States discharges from “normal farming … ranching activities”, from “construction or maintenance of farm or stock pond or irrigation ditches”, and, with some limitations, from construction of “farm roads”. In large commercial agricultural operations “normal” farming activities are of a large industrial scale. Non-point source runoff of pesticide and fertilizer residues from huge farming operations is largely ignored and where farming activities are regulated, such as storm water discharges from concentrated animal feeding operations, regulation is largely by general permits instead of individual permits. Spreading of manure on open fields is, by and large, unregulated. It took EPA nearly forty years to impose regulatory requirements to protect farm workers from exposure to herbicides and other pesticides used in large agricultural operations. Do we see a pattern here? Quite clearly the large commercial agricultural sector has enjoyed a not inconsiderable status of environmental regulatory laissez faire for a very long time.

This brings me back to the farting cows. Bovine source methane emissions are not presently regulated under the Clean Air Act. While cows are mobile,  the Supreme Court clearly didn’t have livestock in mind when it addressed greenhouse gas emissions from mobile sources in Massachusetts v. EPA, and at present EPA is having great difficulty justifying  regulation of even conventional stationary sources of greenhouse gasses. Nevertheless, if the governments that signed the recent Paris Accords remain serious about reducing the precursors of global warming it would seem that they, including the USA, must deal with the bovine methane problem. Quite clearly individual point source emission controls are not the answer to controlling the emission of methane from cows. Collecting the emissions under a roof for rooftop capture and treatment as has been advocated by environmental advocates is not only impractical given the nature of ranching in the US, but attempts to do so would pit environmental regulators against animal rights advocates who argue strenuously and effectively that sequestering animals in tight containments is inhumane treatment.

The only means of reducing this source of greenhouse gas is to reduce the global dependence on meat and cow milk as a primary source of protein in the human diet, that is, significantly reduce the global population of cattle. This will require a far more significant human cultural re-adaptation than will be required to reduce greenhouse gas emissions from transportation and industrial greenhouse gas sources. That being said, there is yet another reason why such a cultural change is necessary. There is simply not enough land on the planet to sustain a meat and cow milk consuming culture as we have now with even the current global population of humans. I don’t have enough space in this blog post to give you the numbers, but suffice it to say that beef and milk are among the most inefficient sources of protein in terms of the number of acres of land required to sustain a single cow. Sorry, all you lovers of good cheese and a great steak, it looks like you are part of the climate change equation.

The Supreme Court Doesn’t Think Much of Paris in the Springtime

Posted on February 17, 2016 by William Session

            For us gray hairs, the phrase used to be “Dateline”, now it’s “Tweetline” . . .  Flash!. . . President Obama @POTUS “. . . Addressing climate change takes all of us, especially the private sector going all-in on clean energy worldwide."

            Apparently “all of us” didn’t include five Supreme Court Justices, led by its Chief Justice, John Roberts.  Indeed, it was SCOTUS going “all out” for climate change.  As in, going “all out” to frustrate one of the EPA’s and President Obama’s signature efforts to respond to and act upon climate change challenges to the global environment. What EPA and the President got (by a split decision) instead was a stay that some have characterized as the quashing of the biggest environmental regulatory change in United States history. 

            That body blow to regulatory appropriation of the climate change debate was instigated by the challenge of virtually every major coal power company to the EPA’s issuance of binding emission reduction requirements for existing domestic power plants.  The coal, fired power industry argued that EPA’s action was “draconian” and would cause the “shutting down or curtailing generation from existing plants and shifting that generation to new sources”.  That, of course, was the precise intent of POTUS and other signatories of the Paris climate change accord last year.

            SCOTUS’s stay was unprecedented and terse.  Not a word of explanation about why the stay was issued.  The proponents of the stay were modestly baffled.  In the words of Basin Power’s legislative rep, Dale Niezwaag, the decision came as a surprise . . . "The supreme court has never issued a stay on a rule that hasn't been ruled on by a lower court.  So this is precedent, setting from our point.  When we put it in, we figured it was going to be a long shot, so we were very surprised that the Supreme Court ruled in our favor”. 

            There are takeaways galore.  However, two are most intriguing to me.  Was this unprecedented stay an unwarranted and thinly disguised, reach into the realm of executive branch constitutional authority?  Second, did the Supreme Court simply muscle its way into a social and scientific debate that begs any legal or factual question of “irreparable harm” to either the power industry or the citizenry of the republic.  In short, was the stay an expression of SCOTUS climate change denial?

The stay makes EPA’s rules unenforceable and will undoubtedly limit their intended goal of achieving emissions cuts to (ostensibly) slow global warming.  More importantly, the ruling, in effect, invalidated POTUS’s pledge on climate agreement made in Paris last spring.  How should one construe the interjection of the Supreme Court into a case that would have, under normal circumstances, been taken up by the Court of Appeals for the District of Columbia Circuit as soon as early 2017?  Was a signal being sent to that court to heed the antipathy some believe certain SCOTUS justices have towards the global warming debate altogether? 

            In keeping with my “newsflash” metaphor, since I started writing this post, the country mourns the unexpected passing of Justice Antonin Scalia.  The lack of a tie breaker justice for the foreseeable future could throw the question of the right of the EPA to forge ahead on the POTUS’s climate change agenda into months or years of limbo.  Will the D.C. Circuit’s decision answer the question next spring?  Will certain senators relent and vote in a replacement for Justice Scalia this year?  Will the eight remaining justices do something other than call things a tie until they have a full complement on the bench? 

            Stay tuned to this blogspot for more breaking news.

Supreme Court Puts Clean Power Plan on Hold, but Clean Agriculture Can Move Forward

Posted on February 12, 2016 by Peter Lehner

The Supreme Court's unexplained stay of the clean power plan was "one of the most environmentally harmful judicial actions of all time," writes Michael Gerrard of Columbia Law School in a recent, excellent blog. Rather than venting outrage, Gerrard quickly moves on to explain that the Clean Power Plan isn’t the only way to cut carbon pollution.

Ramping up efforts like fuel efficiency standards for cars and trucks, and building efficiency standards, he notes, will also help reduce carbon pollution. Gerrard mentions a couple of points about agriculture, but often, this sector is overlooked when it comes to climate solutions. It’s worth taking a closer look at some of the opportunities to reduce climate pollution from our food system.

Food waste is the second largest component of most landfills. As it rots, it releases methane, a potent greenhouse gas. A recent report by the UN Conference on Trade and Development estimates that 2 percent to 4 percent of all manmade climate pollution arises simply from food rotting in landfills.

Keeping food waste out of landfills can help reduce methane pollution. Massachusetts, California, Connecticut, Rhode Island, Vermont, and some cities have enacted laws to manage organic waste disposal in landfills. The idea is to create incentives to reduce food waste and divert it to other purposes, such as animal feed or composting. Instead of being thrown away and becoming a source of pollution, this “waste” can be put to good use. Landfill gas collection systems can be further incentivized. And the nascent effort to reduce food waste from businesses and households can be significantly ramped up.

Another major source of greenhouse gases is the over application of fertilizer. Excess nitrogen fertilizer causes two big problems. The first is water pollution. Nitrogen that isn’t taken up by crops runs off farms and enters larger waterways, where it stimulates the growth of algae and creates “dead zones” deprived of oxygen. The second, and less frequently discussed issue, is the volatilization of nitrogen into nitrous oxide, a greenhouse gas about 300 times more potent than CO2.  The IPCC estimates that 12 percent of all non-CO2 greenhouse gas emissions come from synthetic fertilizer application.  

A number of techniques can reduce these emissions while also providing a cost benefit to farmers. Farm policies could encourage practices like cover cropping, which reduces the need for fertilizer by making soils more rich and fertile. Crop rotations can do the same, yet current crop insurance programs actually discourage the use of these practices. Precision application technologies for fertilizers are getting ever better, but their uptake on farms is slow.

Manure from animals, and the "enteric emissions" from cattle (more commonly thought of as belching) are two more significant sources of climate pollution. Enteric fermentation alone may account for as much as 40 percent of all non-CO2 greenhouse gas emissions, according to the IPCC. Changes in diet might help with these emissions, but this is an area that needs more research.

Some of the emissions from manure can be captured if manure lagoons were covered and better managed. As it stands, these pits are only slightly regulated and are major sources of water pollution sources as well as odor nuisances. An even better practice is to raise cows on rotating pastures, where their waste can enhance soils and help store carbon. And, of course, if Americans did shift to a diet lower in red meat, as per the recommendation of the Dietary Guidelines Advisory Committee, we could further reduce climate pollution from cattle.

Agriculture is one of our nation's most important economic sectors, and is especially vulnerable to the extreme weather impacts of climate change. Its product -- food -- is critical not only for our economy, but is an integral and uniquely personal part of our everyday lives. When we think about how to address climate change, it makes sense to think about food and agriculture. The food we choose to produce, and how we produce it, use it, and dispose of it, all have an impact on climate pollution—and therefore have the potential to become climate solutions. 

Unprecedented Program Leads To Unprecedented Response

Posted on February 11, 2016 by Andrea Field

I am a terrible predictor of what cases the Supreme Court will hear and what the Court will decide on those matters it chooses to hear.  For example, I wrongly predicted that the Supreme Court would never consider reviewing the D.C. Circuit’s decisions in cases involving other recent EPA regulations, but the Supreme Court chose to hear those cases, which led to its decisions in Utility Air Regulatory Group v. EPA and Michigan v. EPAAnd if asked to guess whether the Court would issue a stay of EPA’s Clean Power Plan under section 111(d) of the Clean Air Act, I might well have said that the odds were greatly against that happening – despite the merits of the arguments being raised by those seeking the stay. 

Perhaps, though, my poor predictive abilities are the result of my looking at each case in isolation instead of looking at them in combination and considering whether the Supreme Court’s February 9, 2016 stay decision is an outgrowth of the combined knowledge gained by the Court in its recent reviews of those other Clean Air Act cases.  Specifically, as pointed out by State Petitioners in their briefs in support of a stay of the Clean Power Plan (see here and here,) EPA has touted its Plan as being one that will completely transform the way energy is created and delivered in this country even though – argued State Petitioners – the plain statutory language (of Clean Air Act section 111(d)) does not authorize such Agency action, and the approach of the Clean Power Plan is at odds with EPA’s 45-year history of implementing section 111(d).  Maybe such claims struck a chord with the Court, which – in UARG – told EPA that the Agency cannot make “decisions of vast ‘economic and political significance’” under a long-extant statute, like the Clean Air Act, without “clear congressional authorization.” 

And then there was Michigan, where the Court determined that EPA had proceeded unlawfully in adopting another extensive and expensive Clean Air Act regulatory program.  State Petitioners in the Clean Power Plan litigation made sure that the Court was aware that by the time the Court issued its decision in Michigan – a case where the underlying rule was not stayed during the pendency of litigation – the affected parties had spent billions of dollars to meet the terms of the underlying, un-stayed rule.  In other words, justice delayed in Michigan was justice denied.

None of this is to say what the Court will or will not do if and when it reviews arguments on the lawfulness of the Clean Power Plan.  I make no predictions on that.  But I believe the Court acted appropriately in calling for the completion of litigation before requiring affected parties to make the massive, unprecedented, costly, and transformative changes to the energy industry that the Clean Power Plan demands.       

The Supreme Court Stay of the Clean Power Plan and the Paris Pledges

Posted on February 10, 2016 by Michael Gerrard

The Supreme Court’s unprecedented, unexpected and unexplained action yesterday staying implementation of the Clean Power Plan is one of the most environmentally harmful judicial actions of all time. However, the damage it does to the United States’ ability to meet its Paris pledge is less than it might seem. But that is not because the Clean Power Plan wasn’t important; it is because the Plan didn’t do nearly enough.

The Intended Nationally Determined Contribution (INDC) that the U.S. submitted in advance of COP21 reiterated the prior goal of achieving a 17% reduction below 2005 levels in 2020, and conveyed a new pledge of a 26% to 28% reduction by 2025. The INDC cited the Clean Power Plan as one of the actions being taken to meet those pledges, but did not present any numbers on what actions would lead to what reductions.

More detail was presented in the Second Biennial Report of the United States under the Framework Convention on Climate Change, submitted by the Department of State in January 2016. As the report makes clear, the Clean Power Plan’s actual emissions reductions do not begin until 2022, and thus have no bearing on achievement of the 2020 goal. From 2020 to 2025, the Report expects carbon dioxide emissions to fall from 5,409 to 5,305 MtCO2e (Table 4) with implementation of the Clean Power Plan, energy efficiency standards, fuel economy standards, and numerous other measures that are already on the books, and down to 5,094 in 2030.  (The report does not separately specify how much of this is due to the Clean Power Plan alone; the numbers result from a complex modeling exercise that included numerous interrelated actions.)

That is not nearly enough of a reduction to meet the 26% target (much less the 28% aspiration) for 2025.  Instead, a host of additional measures are also needed. The Biennial Report lists these as possibilities to reduce carbon dioxide emissions:

  • Full implementation of Phase II heavy-duty vehicle fuel economy standards.
  • Finalization of proposed, new, or updated appliance and equipment efficiency standards.
  • Increased efficiency of new and existing residential and commercial buildings.
  • Reduction in industrial energy demand in several subsectors.
  • Additional state actions in the electricity sector.
  • Enhanced federal programs that lead to greater efficiencies in industry and transportation, including greater biofuel deployment and commercial aviation efficiency.

To address other greenhouse gases, the Biennial Report lists these possible added measures:

  • An amendment (already in the works) to the Montreal Protocol on Substances that Deplete the Ozone Layer to phase down production and consumption of hydrofluorocarbons.
  • Measures to reduce methane emissions from landfills, coalmining, agriculture, and oil and gas systems.
  • More efficient nutrient application techniques that reduce nitrous oxide emissions

Even all of the above is not enough to meet the 2025 goals. The Biennial Report puts heavy reliance on the land-use sink – on the ability of forests and other vegetated areas to absorb a considerable amount of the greenhouse gases that are emitted. And even with an “optimistic sink” scenario and a number of other favorable assumptions, the key summary graph in the Biennial Report (Figure 6) shows a reduction of about 27% in 2025.

In sum, while the Clean Power Plan is the biggest game in town in terms of achieving the Paris goals, it is by no means the only game in town. While we express our justifiable fury over the Supreme Court’s action, we need to bear in mind that there are many other things that the U.S. must do in the next several years to control greenhouse gas emissions.

EPA and DOJ Cannot Sugarcoat This: SCOTUS Stays the Clean Power Plan

Posted on February 10, 2016 by Seth Jaffe

Yesterday, the Supreme Court stayed EPA’s Clean Power Plan rule.  No matter how much EPA and DOJ proclaim that this says nothing about the ultimate results on the merits, the CPP is on very shaky ground at this point.

Everyone, supporters and opponents alike (and yours truly), thought that there was no possibility that the Court would grant a stay. And it is precisely because a Supreme Court stay of a rule pending judicial review is such an “extraordinary” – to use DOJ’s own word – form of relief that one has to conclude that five justices have decided that the rule must go.

This isn’t just a preliminary injunction; it’s a preliminary injunction on steroids.  First, everyone seems to acknowledge that it’s unprecedented for the Supreme Court to stay a rule pending judicial review.  Second, the standards in DOJ’s own brief make pretty clear that a stay will only issue if the Court is pretty convinced on the merits.  Finally, it’s worth noting that the Court implied that it does not even trust the Court of Appeals, because the stay will remain in force, even if the D.C. Circuit affirms the rule.  The stay will only terminate either:  (1) if the Court of Appeals upholds the CPP and the Supreme Court denies certiorari or (2) if the order is upheld and the Supreme Court also upholds it.

Back to the drawing board for EPA.  Perhaps § 115 of the Clean Air provides a way out!

Doin’ the Dunes – Part VIII

Posted on February 3, 2016 by Joseph Manko

In my last blog, I summarized the substantive arguments made by the City of Margate’s attorneys in their countersuit against the New Jersey Department of Environmental Protection’s eminent domain proceedings, which were filed in state court—the federal court overturned DEP’s attempts to proceed via administrative orders.  The court will have to consider: (a) is dune construction a reasonable use of the state’s “taking” powers; or (b) were alternative storm protections – e.g., sea walls and wooden bulkheads – more reasonable?

While awaiting a ruling by the court after the upcoming February 4th hearing, there have been two new developments:

1.                  Seventeen residents of Point Pleasant Beach in Ocean County have filed a suit against DEP, claiming the agency’s taking of their beaches was a “land grab” of the residents’ private property destined to require future maintenance expenses and possible development of boardwalks, public restrooms, etc.  These cases are scheduled for hearings next month. 

2.                  The super storm/blizzard over the January 22-24th weekend again left Margate’s streets flooded.  Governor Christie took a “serves you right” position, whereas Margate officials blamed the flooding on the bay, not the ocean. 

As I “go to press,” we’ll soon see whether the plaintiffs’ “we don’t need dunes” position “holds water” (pardon the pun). 

Cap and Trade Is Alive and Well in New York State

Posted on February 1, 2016 by Virginia C. Robbins

New York participates in the cap-and-trade system operated by 9 northeastern and mid-atlantic states known as the Regional Greenhouse Gas Initiative that limits carbon dioxide (CO2) emissions from fossil-fuel burning power plants. These plants must purchase allowances at auction for each ton of CO2 they emit. An efficient gas-fired plant that produces 225 MWs of electricity emits approximately 1.2 million tons of CO2 a year.

During the adoption process for New York’s final RGGI rule in 2008, power generators predicted serious adverse consequences. These included increased electricity costs for consumers, added operating costs for generators who would never recoup all CO2 allowance costs from the sale of electricity, and concerns about longer term energy transactions due to the uncertainty of allowance prices. 

In comments on a draft RGGI rule, generators requested the State to establish a price cap of $0.75 on the cost of a CO2 allowance to protect consumers from significant price increases and a sunset provision in the event a federal cap-and-trade program were established. The generators also expressed concern about the lack of available control technology for CO2 emissions. 

Fast forward: at the last allowance auction in December 2015, the cost of a CO2 allowance was $7.50. New York generators purchased almost 6 million allowances reaping revenue of more than $44 million for the New York RGGI fund. At the previous auction in September, almost 10 million allowances were purchased at a cost of $59 million. Despite these high allowance costs, the lights are still on in New York. According to data published by the New York State Energy Research and Development Authority, updated as of January 16, the monthly average retail prices of electricity in the residential, commercial and industrial sectors have decreased between 2008 and 2015, attributable to the success of energy conservation and efficiency programs, the availability of more renewable energy, and the low price of natural gas and oil. 

CO2 emissions from the power sector have decreased by more than 40% in the RGGI states since 2009 due to reductions in the regional CO2 cap. New York has been a significant contributor to those reductions. Revenue from the program of over $1 billion has been invested by the RGGI states in energy conservation and efficiency efforts, clean and renewable energy, direct bill assistance to households and greenhouse gas abatement. Importantly, RGGI also has the potential to assist states in meeting the CO2 reduction goals in EPA’s Climate Action Plan.

However, a report issued on January 20, 2016 by Synapse Energy Economics and the Sierra Club, entitled The RGGI Opportunity, states that RGGI's current requirements are not enough to get the RGGI states to their climate goals in 2030 and beyond (40% reduction in carbon pollution from 1990 levels) and it encourages more energy efficiency programs, increased levels of wind and solar projects, and adding 10 million battery electric vehicles, all of which will result in job creation. 

The RGGI program has been a clear revenue and greenhouse gas reduction success, but there is potential in New York for RGGI funds to be diverted to the general fund.  This last occurred in 2015 when the legislature approved a budget that moved $41 million of RGGI revenue to the general fund to be used for other environmental programs. Environmentalists considered this action a threat to the program. Since RGGI was adopted by executive action, not by statute as was the case in the other RGGI states, the environmentalists’ view is that RGGI funds can only be used for program purposes. The 2015 transfer of RGGI funds to the general fund could subject the program to challenge as a tax on electricity levied without the legislature’s approval. In contrast, the State’s 2016 budget does not include a raid on RGGI funds.

Would similar cap-and-trade programs work as well in other regions of the country?  Yes, but the political will to establish such programs will depend in part on a region’s fuel mix. Since coal-fired power plants emit almost twice as much CO2 as gas-fired plants, the allowance costs for coal plants will be higher, thereby increasing the cost of the electricity they produce and making such facilities less competitive in regions that also have more efficient facilities. That said, if the programs’ revenues are pumped into energy conservation and efficiency programs, consumers could use and pay for less electricity.    

Disclosures: Do They Help Reduce the Risks of Climate Change?

Posted on January 26, 2016 by Gail Port

           In 2010 the U.S. Securities and Exchange Commission issued interpretive guidance titled Commission Guidance Regarding Disclosure Related to Climate Change on how to apply existing SEC disclosure requirements concerning the risks of climate change to public companies, material climate-related trends, legal proceedings, legislation and other climate associated matters that could affect those companies. Specifically, the SEC's interpretative guidance highlighted the following areas as examples of when climate change may trigger SEC disclosure requirements:

  • Impact of Legislation and Regulation: When assessing potential disclosure obligations, a company should consider whether the impact of certain existing laws and regulations regarding climate change is material. In certain circumstances, a company should also evaluate the potential impact of pending legislation and regulation related to this topic.
  • Impact of International Accords: A company should consider, and disclose when material, the risks or effects on its business of international accords and treaties relating to climate change.
  • Indirect Consequences of Regulation or Business Trends: Legal, technological, political and scientific developments regarding climate change may create new opportunities or risks for companies. For instance, a company may face decreased demand for goods that produce significant greenhouse gas emissions or increased demand for goods that result in lower emissions than competing products. As such, a company should consider, for disclosure purposes, the actual or potential indirect consequences it may face due to climate change related regulatory or business trends.
  • Physical Impacts of Climate Change: Companies should also evaluate for disclosure purposes the actual and potential material impacts of environmental matters on their business.

           Although the SEC advised it would “monitor” the impact of its interpretive guidance on company filings, the SEC has yet to engage in any significant enforcement actions regarding climate change disclosures in light of its 2010 guidance.  However, the New York Attorney General Eric T. Schneiderman has taken up the charge.  On November 8, 2015, Peabody Energy Corporation, the world’s largest private-sector coal company, entered into a settlement agreement with the Attorney General with respect to Peabody’s statements regarding climate change in its SEC filings and other public statements.  This settlement may well mark the first chapter in greater scrutiny of the substance of the climate change disclosures by companies. 

           Using the Martin Act (a New York state securities law that grants the Attorney General broad authority to investigate financial fraud and misleading disclosures) the Attorney General, in 2013, commenced an investigation into Peabody’s climate change disclosures.  The November 8th settlement found that Peabody made two misleading public statements.  First, Peabody’s statement in its annual reports filed with the SEC that it could not “reasonably predict the future impact of any climate change regulation on its business” was found to be misleading to investors.  Peabody, in conjunction with its consultants, had prepared market projections of the potential impact of certain proposed climate change regulations and failed to disclose such projections. The market projections forecasted that “certain potential regulatory scenarios could materially and adversely impact Peabody’s future business and financial condition.”  

           Second, in several of Peabody’s SEC filings, Peabody’s disclosure regarding the International Energy Agency’s (“IEA”) projections of future coal demand failed to note the IEA’s less-favorable projections.  Peabody’s discussion of the IEA’s projections misled investors by cherry picking the high case for coal usage, which “assumes that governments do not implement any recent commitments that have yet to be backed-up by legislation and will not introduce other new policies bearing on the energy sector in the future, even those that are likely to be implemented by various nations.”  The IEA’s projections also include a low case for coal usage and a central position and, while the IEA does not endorse any particular scenario, Peabody omitted both the low case and central position in several of its SEC filings.

            Pursuant to the settlement agreement, Peabody agreed (i) to include specific disclosures in its next quarterly report with the SEC and (ii) that in future SEC filings or communications with shareholders, the financial industry, investors, the general public and others (a) it will not represent that it cannot reasonably project or predict the range of impacts that any future laws, regulations and policies relating to climate change would have on Peabody’s markets, operations, financial condition or cash flow or (b) any citation to the IEA’s projections will include an explanation of the IEA’s various scenarios.

           The NY Attorney General is also reported to be investigating ExxonMobil, under the Martin Act, over its climate change statements. While the Peabody settlement agreement reflects the Attorney General’s increased attention to climate change disclosures by energy companies, the effect may well ripple into other industries.  In addition, members of the House and Senate have requested an update on the SEC’s efforts to implement the SEC’s 2010 guidance.  Nonetheless, questions remain as to whether the obligation to disclosure climate change associated risks will, in fact, be action-forcing so as to result in a change in the behavior of public companies. Will those companies and the public take substantive steps to address the root causes and impacts of climate change or just continue to write detailed disclosures of the potential risks that pass muster with the regulators? Will those enhanced disclosures result in increased investor pressures sufficient to cause those companies to undertake serious, significant, and potentially costly, measures to reduce greenhouse gas emissions and become low-carbon? 

Legal Implications of the Paris Agreement for Fossil Fuels

Posted on January 7, 2016 by Michael Gerrard

           The Paris Agreement on climate change reached on December 12, 2015 has a heavily negotiated sentence that, when closely read, seems to call for the virtual end of fossil fuel use in this century unless there are major advances in carbon sequestration or air capture technology. That, in turn, has important legal implications.

           Article 4 Par. 1 says, “In order to achieve the long-term temperature goal … Parties aim to reach global peaking of greenhouse gas emissions as soon as possible … and to achieve rapid reductions thereafter in accordance with best available science, so as to achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century.”

           In other words, what goes up should be taken back down: for every ton of greenhouse gases (GHGs) emitted from a smokestack, tailpipe or chopped tree, a ton should be removed.

The Numbers

           According to the Intergovernmental Panel on Climate Change’s Fifth Assessment Report (2014), fossil fuel use emits about 32 gigatons of carbon dioxide per year. Other sources, such as methane leakage, cement manufacture, and other industrial processes add another 5-7 gigatons carbon dioxide equivalent. Deforestation and other agriculture, forestry and other land use changes (but subtracting emissions sequestered by forest growth) add yet another 10-12 gigatons a year.  This all adds up to about 49 gigatons. However, global carbon sinks remove only about 18 gigatons per year (8.8 to the oceans, 9.2 to land, not including land use changes). 

           Thus the sinks take up about the equivalent of the non-fossil sources. In order to achieve a “balance” between emissions and sinks, we need to just about end the release of GHGs from fossil fuels, though a radical increase in sinks or reduction on non-fossil fuel emissions would provide some slack.

           Assuming that some kind of balance between emissions and sinks can be achieved, would we actually have until 2099 to decarbonize the economy, as these numbers imply is needed?  Not really. Kelly Levin, Jennifer Morgan and Jiawei Song at the World Resources Institute provide here an illuminating overview of what is required to achieve the long-term temperature goal in Article 2 of the Paris Agreement (“holding the increase in global average temperature to well below 2° C above pre-industrial levels and to pursue efforts to limit temperature increase to 1.5° C”). As the WRI post notes, a recent paper in Nature Climate Change suggests that carbon dioxide from electricity would have to be brought close to zero by 2050, and by then around 25 per cent of energy required for transportation would also need to come from electricity (up from less than one per cent now).

           There seem to be only three ways to continue to use fossil fuels for electricity in the second half of the century (and for transport by the end of the century) and still meet the temperature goal:

  1. Capture the carbon before it escapes into the air, and sequester it 
  2. Devise, and deploy on a massive scale, technologies to remove the carbon from the air, and sequester it
  3. Create new sinks, such as through the immediate halt to deforestation and a worldwide program of tree planting

           All three of these raise a question of how long the carbon will be stored; we do not know how long carbon will stay in reservoirs, and we do know that trees do not live forever, and when they burn or die they release their carbon. Moreover, the technologies of carbon capture and sequestration, and of removing carbon from the ambient air, are developing slowly and are nowhere near large scale deployment. (A price on carbon would create an economic incentive to develop and use these technologies, but politicians in most places are unwilling to impose such a price. A large-scale government-funded research effort, such as the ones that put human beings on the moon, could also produce the necessary innovation, but there has been little visible support for such an effort.) Most of the industrial carbon sequestration that now occurs goes toward “enhanced oil recovery” – squeezing oil out of depleted reservoirs – but extracting more oil is not compatible with stopping fossil fuel use.

           Finding the land for large scale tree planting would face its own challenges in a world where sea level rise, persistent drought, and extreme heat will be rendering much land unsuitable for growing food.

           So meeting the demands of society for energy means a combination of aggressive energy efficiency and conservation programs, the installation of renewable energy (and, perhaps, nuclear), and the substitution of electric or hydrogen vehicles for those using petroleum at an unprecedented pace. The Deep Decarbonization Pathways Project has set forth the colossal amount of new facility construction that would be required worldwide to achieve this.

           Legal Implications

           The Paris Agreement calls on all countries to strengthen their pledges to reduce GHG emissions, and to monitor their progress and report it to the world.  It also says that “all parties should strive to formulate and communicate long-term low greenhouse gas emission development strategies.” (Article 4 Par. 19) That looks like strategies under which every country must show how it is controlling its fossil fuel use.

           These provisions are not legally enforceable. However, many domestic laws are, and they will become a powerful tool to force early planning, or at least disclosures. One key example is the securities disclosure requirements for publicly traded companies.  On January 27, 2010, the U.S. Securities and Exchange Commission issued guidance for the disclosure of climate-related risks. It specifically calls on companies to “consider, and disclose when material, the impact on their business of treaties or international accords relating to climate change.” The Paris Agreement is clearly such an accord, and (if it is vigorously implemented) it will have material impact on many companies in the business of extracting, processing and using fossil fuels, or making things that rely on fossil fuels (such as motor vehicles, ships and airplanes). The SEC’s guidance makes clear that management’s discussion and analysis should explore known trends and uncertainties concerning climate regulation.  This includes regulation outside the U.S. that can affect the operations abroad of U.S. companies. Therefore, disclosure can be expected of the effect of severe restrictions here or in other countries on fossil fuel use, including the possibility that most fossil fuel reserves will need to stay in the ground.

           Climate disclosures have received increased attention since it was reported in November that New York Attorney General Eric Schneiderman is investigating ExxonMobil under the New York securities law, the Martin Act, over its statements about climate change, and had reached a settlement with Peabody Energy.

           This is not necessarily limited to U.S.-registered companies. For example, in April 2015 the G20 finance ministers and central bank governors asked the U.K. Financial Stability Board for advice on the financial stability implications of climate change. In November 2015 this Board proposed the establishment of a disclosure task force to develop voluntary disclosures for several climate-related risks, including “the financial risks which could result from the process of adjustment towards a low-carbon economy.”

           Going forward, impact review of energy projects under the National Environmental Policy Act and its counterparts in many states and most other developed countries should consider the phase-out of fossil fuels that is inherent in the Paris Agreement.  For example, a proposal to build or finance a coal mine, a coal-fired power plant, or a coal port should consider whether the facility would need to be closed before the end of its otherwise useful life, and whether the project would be inconsistent with the Agreement. 

           Systematic analysis and disclosure of these risks will lead responsible boards of directors to undertake serious planning to effect an orderly transition to the low-carbon world that 188 countries agreed to in Paris. These disclosures will also help investors decide what companies will thrive in such a world (such as developers of technologies for renewable energy and efficiency), and what companies are failing to prepare for the transition and thus will themselves become fossils.

WHY, WHY DO I LOVE PARIS

Posted on January 5, 2016 by Richard Ottinger

The Paris Agreement resulting from the COP21 Climate Conference was extraordinary, far better than any of the pundit “experts” expected (indeed most were predicting gloom and doom until the very last minute).  That the conference organizers could get 190 countries that had been quarreling with each other through 20 prior unsuccessful conferences, and many of which have little mutual respect, to come together to unanimously support an agreement of substance on a subject as complex, huge, costly and politically difficult as tackling climate change, is nothing less than a miracle.

Christiana Figuerez and the French negotiating team were brilliant in asking only that countries submit voluntary Independently Nationally Determine Contributions (INDCs) rather than a repeat of conference mandated so-called “binding” carbon reductions as required in the unsuccessful Kyoto Protocol, binding only on developed countries that ratified (and even then signatory Canada simply withdrew).  Their pre-conference preparatory work and skillful conference conduct was critical to its success.

The momentum that was built up as virtually all the countries, large and small, rich and poor, made meaningful submissions was such that it would have been very difficult for any of one nation to spoil the broth.

Indeed, the momentum was so great that even previously very reluctant China, India, S. Africa and Brazil agreed to mandatory verification provisions, extremely important to the effectiveness of the Agreement.

That the INDCs were not sufficient to meet the IPCC scientists’ assessment of need to reduce global temperature increases to no more than below a 2.5 Celsius degrees above pre-industrial revolution levels was to be expected.  But that the parties agreed to meet every 5 years to make further contribution pledges, again despite powerful country reluctance, was a vital success.

One little touted success was a provision to have the Agreement recognize the climate mitigation contributions of non-national organizations, states, provinces, cities, businesses and NGOs, a provision on which I and a group from Yale dubbed The Yale Dialogue, worked very hard to get included. Their inclusion is very important since many of them have already achieved much more than their national governments have been able to pledge.  Perhaps most importantly, it is they that ordinarily are the key actors in establishing energy efficiency standards and often renewable energy incentives.  The Paris Agreement doesn’t call for ratification until 2020, and progress before then will fall largely on their shoulders.

While the task before all the countries of the world to achieve the goals sought through the Agreement is daunting, the Paris Agreement has gotten the world off to a wonderfully good start.

Are Obama’s Climate Pledges Really That “Legally Durable”?

Posted on December 21, 2015 by Richard G. Stoll

In his December 16 ACOEL post Professor Robert Percival concludes that President Obama’s Paris GHG reduction pledges are most likely “legally durable.”  Two of his key points:  (1) EPA’s Clean Power Plan (CPP) – from which the bulk of the Obama pledges are comprised – will likely survive judicial review; and (2) any effort by a new President to undo the CPP would require a lengthy rulemaking process that could be rejected on judicial review.  

The CPP may ultimately survive judicial review, and any attempt by a new President to undermine the CPP may ultimately fail.  But with due respect to Professor Percival, I submit the GHG reduction pledges may be far less “legally durable” than he suggests.  

Judicial Review Prospects.

Professor Percival notes that the Supreme Court has “repeatedly upheld EPA’s authority to regulate GHG emissions.”  But EPA’s authority to regulate GHG emissions is not at issue in the challenges now pending in the D.C. Circuit.  (Consolidated under the lead case West Virginia v. EPA.) 

Rather, the issues relate to how far can EPA go with the words of the Clean Air Act (CAA) to regulate GHG emissions.  I think most would agree that EPA seeks to go pretty far with a few words in CAA 111.   One key issue is whether the words authorizing imposition of “best system” emission limits upon “stationary sources” confer authority to require owners of coal-fired stationary sources to replace their plants with solar and wind energy sources.

In my view, whether the CPP will survive in the D.C. Circuit may well depend upon the composition of the 3-judge panel selected by lot.  The 17 active and senior judges on that Court represent an amazingly wide spectrum of philosophies.  But the cases will probably then go to the Supreme Court – and there, I think EPA will have a pretty tough (but maybe not impossible) time.  Last year, the Court rejected parts of EPA’s GHG regulatory scheme in its UARG opinion.  The Court  expressed strong distaste for EPA regulations with questionable grounding in the CAA’s words  – particularly “where an agency claims to discover in a long-extant statute an unheralded power to regulate a significant portion of the American economy.”

A New President’s Prospects.

Virtually every Republican Presidential candidate has vowed to undo most or all of the CPP (assuming it has not been rejected on judicial review).  I take no position on whether he or she should do this.   But I do believe it could be done fairly quickly and in a manner likely to survive judicial review.

I direct your attention to Nat'l Ass'n of Home Builders v. EPA.  Writing for a unanimous panel in an EPA case, Chief Judge Garland (an Obama appointee – joined by Judge Rodgers, a Clinton appointee) quoted extensively from recent Supreme Court opinions.  In Part II(A) of Judge Garland’s opinion (pages 1036-38) and Part IV (page 1043), the following points come through strong and clear:

a.  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;

b.  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.

Thus the “lengthy rulemaking process” envisioned by Professor Percival need not be so lengthy.  A new administration would not need to develop a new factual record – it would merely have to carefully explain in its rulemaking the legal and policy reasons why it was undoing parts or all of the CPP.  There is no reason this could not be accomplished within a year or two, and reductions required under the CPP do not begin kicking in until 2022.

Promises, promises: how legally durable are Obama's climate pledges?

Posted on December 16, 2015 by Robert Percival

As part of a global agreement on climate change, the US has pledged, among other things, to reduce its greenhouse gas (GHG) emissions by 26%-28% compared to 2005 levels by the year 2025. But opponents of President Obama argue that he cannot keep his promises made at the Paris climate summit.

The Obama administration is confident that the US can meet its promise based on the regulatory actions already taken by the US Environmental Protection Agency (EPA) and other federal agencies to reduce GHG emissions, part of a broad Climate Action Plan announced by President Obama in June 2013.

In transportation, US fuel economy standards set by the EPA have been raised dramatically. And earlier this year the EPA issued regulations to control GHG emissions from power plants, which led to a final rule known as the Clean Power Plan.

The Clean Power Plan will require states to reduce GHG emissions from existing power plants by 32% by the year 2030. It is expected to accelerate the retirement of coal-fired power plants as electric utilities increasingly shift to natural gas and renewable sources of energy.

Yet even as US negotiators arrived in Paris for the climate summit, Obama's political foes were questioning his authority to sign an international agreement on climate change.

Senate Majority Leader Mitch McConnell argued that the US cannot meet its promises to the global community because the Clean Power Plan is "likely illegal" and will either will be struck down in court or be revoked by a new Republican president.

So how strong is the legal defense of Obama's signature climate initiatives?

Going to the Supreme Court?

Having the Clean Power Plan struck down in court seems unlikely for a number of reasons. These include the fact that the US Supreme Court repeatedly has upheld EPA's authority to regulate GHG emissions under the Clean Air Act, beginning in 2007 with its decision in Massachusetts v EPA.

On the other hand, a new president working with congressional opponents of climate action could undermine the US commitment. Let's consider the legal possibilities.

The Congressional Review Act provides special fast-track procedures that allow Congress to veto regulations issued by federal agencies within 60 legislative days of their issuance. But before such a joint resolution of disapproval can take effect, it requires either presidential approval or the override of a presidential veto by a two-thirds majority in each house of Congress.

The signature policy of Obama's climate strategy is the EPA Clean Power Plan to regulate CO2 from power plants. Opponents are already challenging it in court. haglundc/flickr, CC BY-NC

As a result, the only time this procedure has been used successfully was shortly after a change of administration. In March 2001 new President George W Bush signed a disapproval resolution blocking regulations issued at the end of the Clinton administration to protect workers from repetitive motion injuries.

Congress is trying to use the Congressional Review Act to disapprove EPA's greenhouse gas regulations, but such a vote is entirely symbolic because President Obama has promised to veto the disapproval resolution and the 60 legislative day period will end long before the 2016 election. Thus, as long as a president committed to climate action remains in office, the Congressional Review Act is not a promising option.

Dramatic versus piecemeal attacks

A new president opposed to climate action could direct EPA to repeal its regulations, but this would require the agency to undertake a lengthy rulemaking process to comply with the Administrative Procedure Act that governs how agencies adopt regulations. Any agency decision to revoke the regulations would be challenged in court and could be overturned.

The courts have played a role before in attempts to reverse regulations. When President Reagan's Department of Transportation rescinded its air bag regulations, the Supreme Court held that it had acted arbitrarily and capriciously because the decision was not supported by the factual record showing that air bags save lives.

 

There will be legal challenges to the EPA Clean Power Plan, but the Obama administration thinks it's on solid legal ground. vagueonthehow/flickr, CC BY

And when the Supreme Court in 2011 rejected state efforts to hold electric utilities liable for climate change under the federal common law of nuisance, it pointedly noted that any future EPA decision not to regulate GHG emissions would be subject to judicial review.

Working with a new president sympathetic to opponents of environmental regulation, Congress could repeal or amend the Clean Air Act, the legal foundation for EPA's regulations of GHG emissions. However, the Clean Air Act has been remarkably resistant to past legislative onslaughts. It is, after all, thanks to the Clean Air Act that the "airpocalypses" choking major cities in China and India right now do not happen in the US.

Another option for a future Congress would be to adopt targeted amendments to deprive EPA of authority to implement the Clean Power Plan and other GHG regulations if there are enough votes in the Senate to overcome a filibuster. Congress also could use the power of the purse to withhold funds for actions necessary to implement any Paris agreement, including US promises of financial aid to help poor countries adapt to climate change.

Post-Paris

The Paris climate conference is being conducted pursuant to the UN Framework Convention on Climate Change, a treaty signed by President George H W Bush in June 1992 and ratified unanimously by the US Senate on October 7 1992. President Obama believes he already has sufficient legal authority to implement any agreement made in Paris and thus he does need not to ask Congress for new approval.

There is precedent for this. In 2013 the US was able to accede to the Minimata Convention on Mercury without congressional approval because existing law already provides the president with sufficient legal authority to implement its requirements.

For decades, the principal argument by opponents of US climate action has been that the US should not act until developing countries agreed to control their GHG emissions. That argument was dramatically undermined in November 2014 when China agreed to control its emissions, in a joint announcement with the White House.

The claim that other countries will not control their emissions has now been laid to rest in Paris with a new global agreement requiring all countries to do so. Now that the entire world has recognized that all nations must act to combat climate change, it would be the height of folly for a new president and Congress to reverse course.

The Conversation

This article was originally published on The Conversation. Read the original article.

Paris to Earth: Act Locally Within a Global Framework

Posted on December 15, 2015 by John Dernbach

Paris—In the run-up to the Conference of the Parties to the Climate Change Convention, a short humorous video, “Earth to Paris,” was widely viewed.  It was a call to delegates for take serious action on climate change at the conference.

The Paris Agreement is being hailed as an historic breakthrough by political leaders, nongovernmental organizations, and the business community. It represents the first time since the Framework Convention on Climate Change was opened for signature in 1992 that all 196 parties have agreed to take  actions to reduce their greenhouse gas emissions.  The only prior agreement even remotely comparable to the Paris Agreement—the Kyoto Protocol—limited only developed country emissions.

Not only was there unanimous approval of this agreement—a remarkable feat in itself—but its overall goal is ambitious. Countries agreed to hold “the increase in the global average temperature to well below 2 °C above pre-industrial levels.”  They also agreed to “to pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels, recognizing that this would significantly reduce the risks and impacts of climate change.”  The parties thus increased somewhat the level of ambition from limiting warming to 2 °C, which had been the consensus objective.

They also agreed to “aim to reach global peaking of greenhouse gas emissions as soon as possible, recognizing that peaking will take longer for developing country Parties, and to undertake rapid reductions thereafter.” That, too, is new.

And unlike Kyoto, this agreement puts primary responsibility for what happens in particular countries where it has always been—with the countries themselves. This is through the mechanism of nationally determined contributions (NDCs)—public commitments that nearly all countries made prior to Paris to reduce their greenhouse gas emissions to some extent.  The Paris agreement affirmed those agreements and made them central to the global climate change effort.

But what also sets the Paris Agreement apart—and will ultimately determine whether humanity averts or limits the worst effects of climate change—are processes that the agreement puts in place to periodically increase national ambition, assist countries in meeting their objectives, share information, and ensure methodological consistency in accounting for emissions reductions. These processes should greatly enhance the likelihood that the Paris Agreement will actually work.

Processes in the Paris Agreement that embody this approach include the following:

  • Beginning in 2020, and every five years afterwards, each country is to “communicate and maintain successive nationally determined contributions that it intends to achieve.” These, of course, are in addition to those that countries already submitted. Each “successive nationally determined contribution” is to “represent a progression beyond the Party’s then current nationally determined contribution and reflect its highest possible ambition.”
  • While financial assistance to developing countries has always been part of the international framework to address climate change, developed countries agreed to increase their level of financial support from previous levels by a nonspecific amount. Developed countries also agreed to communicate “indicative quantitative and qualitative information” about their financial support to developing countries, including projected future levels of public finance.
  • Beginning in 2023, and every five years afterwards, the conference of the parties is to “take stock of the implementation of this Agreement to assess the collective progress towards achieving” its purpose. The outcome of this “global stocktake” is to “inform Parties in updating and enhancing, in a nationally determined manner,” including enhanced “international cooperation for climate action.”
  • The agreement creates “an enhanced transparency framework for action and support.” This framework is partly to understand what NDCs actually mean and achieve. NDCs from different countries use different assumptions and baselines, and enhancing their comparability is essential. This transparency framework is also to better understand what financial contributions developed countries are actually making to developing countries.
  • Recognizing that “[a]ccelerating, encouraging and enabling innovation is critical for an effective, long-term global response to climate change and promoting economic growth and sustainable development,” the agreement creates a Technology Mechanism. The purpose of the mechanism is to facilitate technology development and the transfer of technology to developing countries. The “global stocktake” is to consider this and other efforts to support “technology development and transfer for developing country Parties.”

These processes are different from the kind of obligations we are used to in environmental law–obligations, for example, to reduce greenhouse gas emissions by a certain amount by a certain date.  Rather, these processes may be understood in terms of reflexive law and governance. Reflexive approaches are not substantive rules: they improve the capacity of governmental institutions and other entities to learn about themselves and their actions.  Reflexive approaches also stimulate them to use this information to make appropriate changes.  They create spurs to action.

In the context of the Paris agreement, reflexive governance seems intended to perform at least four key tasks. First, it should encourage or prod governments to be more ambitious over time, without being prescriptive about what they should do.  This is true not only of emissions reductions but also, for developed countries, of their efforts to provide financial and technological resources to developing countries.  Second, it will provide information to governments and others about what other governments are actually doing, as well information about the effectiveness and impacts of particular laws and policies.  This information can then be used to modify those laws and policies.   Third, because this information will be public, it means that governments are more likely to honestly and openly share what they are doing, and be responsive to the views of nongovernmental organizations and businesses as well as the public in general.

Finally, there are few areas in law and policy in which the playing field is changing faster than in climate change.   The changes are not just new agreements, but also the rapid upscaling of renewable energy as its price drops, the wide variety of international coalitions working to accelerate greenhouse gas emission reductions in particular areas or sectors, changes in the emissions profiles of China and India over the past decade, improvements in our understanding of the science, and the greater availability of private finance.  The Kyoto Protocol, hailed as an advance when approved in 1997, looks like a relic less than 20 years later.

These and other processes in the Paris Agreement are more likely to survive, accommodate, and address this shifting landscape in the years ahead.  One could wish for a stronger agreement, but these processes are likely to make the global partnership to address climate change stronger and more effective over time. And they are particularly likely to do so because every country agreed to the ambitious goals toward which they are aimed.

 

Orginially posted on www.johndernbach.com

Doin the Dunes – Part VII

Posted on December 11, 2015 by Joseph Manko

In my latest blog, I related that New Jersey Superior Court Judge Julio Mendez had taken under advisement the City of Margate’s request for an evidentiary hearing on the reasonableness of the state’s condemnation of easements on 87 City-owned lots.  The request had stressed the public’s express opposition to dunes (2 referenda) and the alleged superiority of bulkheads and seawalls for both bay and ocean front properties. 

Well, the Judge ruled on Tuesday, December 8, to grant Margate’s Motion to hear its argument in a February hearing on alleged abuse of the state’s eminent domain power.  Margate also challenged the Corps of Engineers’ reliance on a 20-year old study, claiming that the study was outdated and its beach protections were as good as, if not better than, dunes. 

If Margate’s arguments are successful, Governor Christie’s 127 mile Sandy Relief Act program would have an approximate 1½ mile gap in continuity (its neighbors Ventnor and Longport have agreed to give the state easements to build dunes). 

Next month look for the lowdown on Judge Mendez’ decision in Part 8 of my series, “Doin the Dunes.”  

Does Colorado Support the Clean Power Plan? Yes. And No.

Posted on December 9, 2015 by Seth Jaffe

 

I have never understood why 43 states – including the great Commonwealth of Massachusetts – have independent elected attorneys general.  I’m sure my new colleague, former Massachusetts Attorney General Martha Coakley, would disagree with me, but I just don’t think that the value of having an AG independent of the Governor is worth the lack of policy consistency.  Exhibit A to my argument is the current dispute in Colorado between Governor John Hickenlooper and Attorney General Cynthia Coffman concerning EPA’s Clean Power Plan.  What’s the problem?

Hickenlooper supports the CPP; Coffman opposes it.  Indeed, Coffman does not just oppose it; on behalf of the State of Colorado, she’s joined the litigation seeking to stop the rule.  Excuse me, but shouldn’t the Governor speak for the citizens of Colorado on such matters?  Absent some kind of conflict of interest requiring independent counsel, the Governor has to be the boss.  I’m sure most citizens see it that way; it would be nice if reality mirrored perception.

I’d assume that the Colorado Governor has authority to retain separate counsel – and I hope my friends in Colorado will tell me if I’m wrong.  I’d love to see Governor Hickenlooper retain his own counsel and intervene in the litigation on the side of EPA.  What would the Court do if Colorado appeared on both sides of the V?

hickenloopercoffman

Some Hard Truths About Addressing Climate Change

Posted on December 2, 2015 by Seth Jaffe

Last week, the Boston Globe had an op-ed by Joshua Goldstein and Steven Pinker concerning some “Inconvenient truths for the environmental movement.”  I’m sorry to say that I agree with pretty much every word of it.  Why am I sorry?  Because Goldstein and Pinker make clear – even though they don’t mention his name – that the Pope was completely wrong in his prescription for addressing climate change.  How so?  It’s really pretty straightforward.

People want more economic development, not less.  They want more markets, not less.  It may be that some wealthy societies could still have a relatively smooth transition to renewable fuels without sacrificing economic growth.  Unfortunately, that’s not where we have to address the demand for fossil fuels.  We have to do so in China and India and other developing countries.  I’m sorry, but I’ve seen the projected demand for fossil fuels outside the US and Europe and it’s not pretty.  Anyone who thinks that we can quickly and easily eliminate fossil fuel use in those countries and still allow them the economic growth that their citizens demand is delusional.

Which brings us to Goldstein’s and Pinker’s second inconvenient truth; nuclear power has to be a large part of the solution.  And I’m afraid that’s probably the end of the conversation for many of my environmental friends, so I’ll cut this short.

I’m still an optimist.  I believe that we can still solve climate change.  We can do so however, with more use of markets, not less.  And we must do so with more economic growth, not less, because the rest of the world won’t be satisfied with less.

DOIN’ THE DUNES – PART VI

Posted on November 30, 2015 by Joseph Manko

As we left off, the New Jersey Supreme Court ruled that in obtaining easements to build dunes, the amount of compensation for the partial loss of ocean view would have to take into account a credit for the benefit afforded by the dunes’ protection. 

When the New Jersey Department of Environmental Protection, in carrying out Governor Christie’s program to construct a $3.5 billion dune system to protect its 127 mile coastline, decided to acquire the necessary easements by administrative actions, the City of Margate in Atlantic County challenged the failure to proceed by eminent domain:  U.S. District Judge Bumb agreed with Margate and invalidated this mechanism, ordering the Department to proceed with eminent domain in state court. 

Ten months later, New Jersey Superior Court Judge Mendez took under consideration two issues:  (1) the reasonableness of the use of eminent domain to acquire easements from 10 private lot owners and 87 city-owned lots, and (2) instead of his making a summary ruling, the need to allow Margate to have an evidentiary hearing, citing the two referenda in which Margate’s voters voted to oppose the dunes. 

Once Judge Mendez rules, I will update this matter, keeping in mind that the author owns a 10th floor condominium in Margate, the Municipality Governor Christie calls the most “selfish” municipality in New Jersey.  

What Do Opponents of the Clean Power Plan and the Oklahoma Sooners Have In Common?

Posted on October 23, 2015 by Seth Jaffe

So the Clean Power Plan has been published in the Federal Register.  For those who cannot get enough, you can find all of the important materials, including EPA’s Technical Support Documents, on EPA’s web site for the CPP. 

Not surprisingly, given the number of suits brought before the CPP was even finalized, opponents were literally lining up at the courthouse steps to be the first to sue.  West Virginia apparently won the race and is the named plaintiff in the main petition filed so far. 

Perhaps because Oklahoma has been one of the most persistent, and vocal, opponents of the CPP, this called to mind the origin of the Sooner State’s nickname – which seems particularly apt, since Oklahoma was one of the states that couldn’t wait for the rule to be promulgated to sue.

Sooners

Oklahoma is not actually among the plaintiffs in the West Virginia suit.  Oklahoma filed its own petition today.  One wonders whether Oklahoma was banished from playing with the other states as a result of its impatience.  Unlikely, since most of those in the West Virginia suit also filed early, but it did call to mind that other famous event in the history of the west, as recorded in Blazing Saddles.

Ruminations on the Transition to a Low Carbon Economy

Posted on August 24, 2015 by Christopher Davis

Amid the controversy around the just released EPA Clean Power Plan rule, the impacts of climate change are becoming apparent with a proliferation of heat waves, droughts, floods, wildfires and other extreme weather events and trends, both in the U.S. and globally.  While many climate scientists (and world governments in the 2010 Cancun Agreements) have agreed that it is necessary to limit average global temperature rise to 2 degrees Celsius to avoid potentially catastrophic and irreversible effects of climate change, the impacts we’re now witnessing result from a temperature rise of just under 1 degree C. We are currently on a trajectory toward a 3 to 4 degree (or more) increase, which has sobering implications.

In preparation for the COP 21 negotiations in Paris, world governments are engaged in a “bottom up” process of submitting proposed national emission reduction pledges poetically called Intended Nationally Determined Contributions (INDCs).  These are not expected to get us to a 2 degree future, but will hopefully form the basis for an international agreement that sets the world on a path toward that target or something close.

The U.S. INDC calls for reducing our emissions by 26-28 percent below 2005 levels by 2025, which will require additional measures beyond those currently proposed or in place (including the EPA Clean Power Plan, CAFÉ and truck efficiency standards, methane and HFC controls). All of these measures are controversial and under attack from various quarters. As the world’s second largest emitter, the U.S. must implement credible and effective emission reduction strategies to convince other major emitters in the developing world (China, India, et al) to control their emissions and to help avoid the worst effects of climate change.

Solving climate change clearly poses huge challenges, but it also presents huge economic opportunities. As highlighted in Ceres’ 2014 Clean Trillion report, International Energy Agency analyses show that the world needs an average of more than $1 trillion in additional annual investment in clean energy technologies (renewable energy, energy efficiency, efficient transport, etc.) beyond 2012 levels of about $250 billion. This creates a massive need for capital, and presents a huge economic and investment opportunity to finance the necessary low carbon, clean energy economy.

A global transition to a low carbon economy is in progress and accelerating, but too slowly.  Policies that put a meaningful price on carbon emissions and eliminate fossil fuel subsidies are needed to scale up clean energy investment. Fortunately there is growing business and investor support for such actions, as evidenced by the Global Investor Statement on Climate Change and recent letters from more than 350 companies supporting EPA’s Clean Power Plan. More such voices are needed to make the business and political case for solving climate change, before it is too late.

I’m tired of waiting, says another judge

Posted on August 5, 2015 by Rodney Brown

On June 23, 2015, a Superior Court judge in Seattle ordered the Washington State Department of Ecology to reconsider its decision denying a petition for rulemaking on climate change issues. Ecology had earlier decided to deny the petition and instead wait to see if the international community makes progress at the upcoming Paris climate talks. The judge, however, found Ecology’s reasoning inadequate and was especially put off by Ecology’s decision to wait for the outcome of the conference of the parties scheduled to take place in December, 2015 in Paris. The judge ordered Ecology to reconsider its decision, and to report back to the court by August 7. The court presumably hopes the parties will engage in settlement negotiations in the meantime.

A group of eight young people filed the petition for rulemaking in 2014. As the judge noted, they are “[f]rustrated by an historical lack of political will to respond adequately to the increasingly urgent and dire acceleration of global warming.” Their petition asked Ecology to adopt a proposed rule recommending to the Legislature that it update the state’s existing 2007 climate change statute to reflect the most recent science on greenhouse gas reductions. (The most recent science calls for larger reductions than does the statute.) 

More important, the petition does not specify particular actions Ecology should take. Instead, it tells Ecology to achieve the reductions science calls for by using all its statutory authorities. This might include new rulemaking under the Clean Air Act, new permits under all Ecology’s programs, broader use of Ecology’s land use and EIS authorities, and perhaps more.

It’s notable that this decision came just two days before a similar one in the Netherlands that John Dernbach discussed July 21 in his blog post

Looks as though judges all over the world are getting tired of waiting on the other branches of government.

DUTCH COURT: NETHERLANDS MUST DO MORE TO REDUCE GREENHOUSE GAS EMISSIONS

Posted on July 21, 2015 by John Dernbach

            On June 25, 2015, The Hague District Court in the Netherlands issued an order and opinion requiring the Netherlands to reduce its greenhouse gas emissions by 25 percent below 1990 levels by 2020.  This level is more ambitious than the 17 percent reduction goal to which the Dutch government has currently committed.  The case, Urgenda Foundation v. State of the Netherlands suggests what courts may be willing to do when government policy lags behind what climate science indicates is needed. 

            Urgenda sued the government in tort under the Dutch Civil Code on behalf of itself and 886 individuals, claiming among other things that “the State is in breach of its duty of care for taking insufficient measures to prevent dangerous climate change.”  For U.S. lawyers, accustomed to limited governmental tort liability under federal and state law, the breadth of this claim may be startling.  But it was also novel, though less so, to the court, which explained that this legal issue “has never before been answered in Dutch proceedings.” 

            Although the state has considerable discretion in policy making for climate change, the court said, that discretion is constrained by both the U.N. Framework Convention on Climate Change and the Treaty on the Functioning of the European Union (TFEU).  Objectives and principles of the Climate Change Convention and the TFEU that constrain Dutch discretion, the court said, include “protection of the climate system, for the benefit of current and future generations, based on fairness;”  the precautionary principle, and consideration of “available scientific and technical information.” 

            Urgenda’s case was based on numerous scientific reports, including the 2007 report of the Intergovernmental Panel on Climate Change (IPCC), which said that Annex I countries (including both the Netherlands and the United States), need to reduce their greenhouse gas emissions by 25-40 percent below 1990 levels by 2020, and 80-95 percent below 1990 levels by 2050, to limit the global temperature increase to 2.0 degrees Celsius.    Parties to the Convention on Climate Change have agreed that a temperature increase above that level (equivalent to 3.6 degrees Fahrenheit) would be dangerous. 

            After analyzing multiple factors relevant to the appropriate duty of care, the court concluded that the state “has acted negligently and therefore unlawfully towards Urgenda by starting from a reduction target for 2020 of less than 25% percent compared to the year 1990.”   It ordered a 25 percent reduction, saying there are “insufficient grounds for the lower limit” of a 40% reduction from 1990 levels specified in the 2007 IPCC report.  

            Although the case was decided under Dutch legal rules that are quite different from our own, and may be appealed, it has significance to U.S. lawyers.  First, it shows great respect for climate change science, describing IPCC and other scientific reports in considerable detail.  The case therefore underscores the important role that courts can play in affirming the validity of climate change science.

            Second, the court’s willingness to interpret domestic law in ways consistent with international commitments, including those in the Convention on Climate Change as well as the commitment to keep warming to 2.0 degrees Celsius, raises an interesting and important question about whether U.S. domestic laws related to climate change also should be interpreted in ways consistent with international commitments.  U.S. courts have often held that statutes should be construed in a manner consistent with treaties and other international obligations.    

            Finally, the decision indicates the value of judicial intervention as a way of forcing governments and businesses to do more than they are doing.  Additional legal support for such cases was provided, in March 2015, by the issuance of the Oslo Principles on Global Climate Change Obligations.  These principles were developed by a group of legal experts from around the world.  The central idea is that “[s]tates and enterprises must take measures, based on” the precautionary principle, “to ensure that the global average surface temperature increase never exceeds pre-industrial temperature by more than 2 degrees Celsius.”  Many sources of local, national, and international law support these principles, the experts said, including “international human rights law, environmental law and tort law.” 

            According to a report issued on July 16, 2015 by the American Meteorological Society, 2014 was the warmest year on record.  As the effects of climate change intensify, there may be more such litigation, and decisions like this could become more common.       

Do Climate Change and Same-Sex Marriage Have Anything in Common?

Posted on June 29, 2015 by Seth Jaffe

Recent events have me pondering this question.

Most notably, in two court decisions last week, courts ordered the State of Washington and the government of the Netherlands to take more aggressive action against climate change.  In the Washington case, in response to a complaint from eight teenagers, a trial court judge has ordered the Washington Department of Ecology to reconsider a petition filed by the teenagers requesting reductions in GHG emissions.  Similarly, in the Netherlands, a court ordered the government to reduce GHG emissions by 25% within five years.  The Dutch case was brought under human rights and tort law, not under existing Dutch environmental laws.

I have been very skeptical of the use of nuisance-type litigation to require more aggressive government regulatory efforts.  I still think comprehensive market-based regulation is the best approach.  However, in the absence of aggressive action in the United States and world-wide, these suits are going to increase in number.

So, how are they similar to the same-sex marriage issue?  First, as noted in Obergefell, courts were initially – and for some time – not just unfriendly to litigation efforts in support of same-sex marriage, they were positively dismissive.  Second, there is the gradual increase over time in the litigation.

Next, there is also the change over time in the scientific understanding of the issues.  While same-sex marriage has always been, on both sides, primarily a moral issue, it would be wrong to ignore the role that an increasing understanding of the genetics of sexual preference has played in the debate.  Similarly, the move towards an overwhelming weight of evidence, not just that climate change is occurring, but that it is anthropogenic, has obviously been important to the climate change debate.

Finally, while the moral issues in same sex marriage may seem to distinguish it from the climate issue, the recent papal encyclical makes clear that there are moral aspects to the climate change debate as well.

I have no crystal ball.  I do not know whether we are going to see a groundswell, and then, perhaps, a tidal wave that will somehow overcome the gridlock in United States and world politics on climate change.  There are differences in the two issues, most obviously in the short-run economic costs of addressing climate change.  Nonetheless, I do know that it wouldn’t surprise me if the tidal wave comes, and relatively soon.

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POLITICS, POPES AND POLLUTION

Posted on June 1, 2015 by Charles F. Becker

Vatican officials have confirmed that a Papal encyclical will be released in June.  The encyclical, which is the official proclamation of the Catholic church on a particular issue, will address the environment.  According to the Vatican’s spokesman, Frederico Lombardi, Pope Francis believes that the proclamation will act as a “moral barometer” and will help “shape the discussion” at the climate summit in Paris (COP21) scheduled to be held at the end of 2015.

Although the encyclical has not yet been released, there is little question that it will take a strong position that environmental protection is a moral and religious issue and will likely acknowledge that climate change is, in fact, caused by human activity.  As a precursor to the publication, a Vatican meeting was held on climate, energy and ecology.  The meeting was a collective of religious leaders, environmentalists, and scientists, among others.  On April 28, 2015, the group issued the “Declaration of Religious Leaders, Political Leaders, Business Leaders, Scientists and Development Practitioners:”

We, the undersigned, have assembled at the Pontifical Academies of Sciences and Social Sciences to address the challenges of human-induced climate change, extreme poverty, and social marginalization, including human trafficking, in the context of sustainable development. . . .  We have considered the overwhelming scientific evidence regarding human-induced climate change, the loss of biodiversity, and the vulnerabilities of the poor to economic, social, and environmental shocks.

In the face of the emergencies of human-induced climate change, social exclusion, and extreme poverty, we join together to declare that:

Human-induced climate change is a scientific reality, and its decisive mitigation is a moral and religious imperative for humanity; . . .

The world should take note that the climate summit in Paris later this year (COP21) may be the last effective opportunity to negotiate arrangements that keep human-induced warming below 2-degrees C, and aim to stay well below 2-degree C for safety, yet the current trajectory may well reach a devastating 4-degrees C or higher; . . .

Given the timing of the Vatican meeting, it seems probable that Pope Francis’s upcoming encyclical, with its teachings for 1.2 billion Roman Catholics in the world, will have a significant impact.  While many will be excited to see its contents, there are some that will likely be less than thrilled – including more than a few of the 40 or 50 candidates for President (I may have added a few of the fringe candidates) as well as some members of Congress.  Whether the candidate is the extreme “climate-change-does-not-exist” or the more moderate “environmental-regulation-is-not-a-pressing-issue,” the encyclical is going to be a real problem.  Recent polling indicates, for example, that environmental issues do not show up in the top ten priorities for Republican voters.  But is any politician really going to disregard the Pope?  And since 25% of the members of Congress identify as Catholic Republicans, the presidential candidates are not going to be alone in their dilemma. 

I make a point of this only because I live in Iowa and the migration of presidential candidates has already begun.  You can’t turn right at a corner without hitting a candidate, and between now and February 2nd (the Iowa caucuses) it is going to get much, much worse.  If the Vatican could just wait until February 3rd or 4th, all of Iowa would be greatly appreciative.  New Hampshire might not be thrilled, but that’s a risk we would be willing to take. 

Religion, to varying degrees based on the country, has always had an impact on politics.  In the United States, history and the Constitution have tried to separate them, but with little success.  One thing is certain, at least during the last six months of 2015, we are all going to hear a lot more about environmental imperatives, moral obligations and political priorities.  

EPA Is Not an Expert in Determining Electric System Reliability

Posted on May 7, 2015 by Seth Jaffe

The D.C. Circuit Court of Appeals just reversed and remanded EPA’s rule allowing backup generators to operate for up to 100 hours per year as necessary for demand response. It’s an important decision that could have lessons for EPA and the regulated community across a wide range of circumstances, including eventual challenges to EPA’s proposed GHG rule.

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EPA said that the rule was necessary to allow demand response programs to succeed while maintaining grid reliability.  Commenters had argued that, by encouraging greater use of uncontrolled backup generators, EPA’s rule makes other generators less economic, thus creating a negative feedback loop, with less and less power generated by controlled units, resulting in greater and greater need for uncontrolled backup generators. Here’s what the Court concluded:

  1. EPA failed adequately to respond to the commenters’ arguments. Noting that “an agency must respond sufficiently to “enable [the court] to see what major issues of policy were ventilated,” the Court instead found that EPA “refused to engage with the commenters’ dynamic markets argument."
  2. To the extent EPA did respond, it was “self-contradictory”, arguing that it was not justifying the regulation on reliability grounds, even though the final rule said that it was based on reliability concerns.
  3. The 100-hour rule was based on faulty evidence. EPA relied on evidence that backup sources had to be available at least 60 hours to participate in a PJM “Emergency Load Response Program.”  However, PJM itself noted that this minimum does not apply to individual engines.
  4. Finally, and perhaps most importantly, while EPA justified the rule on reliability grounds, the Court stated that:

grid reliability is not a subject of the Clean Air Act and is not the province of EPA.

This last issue is the part of the opinion that could have some bearing on judicial review of EPA’s GHG rule.  The Court noted that there was no evidence that FERC or NERC had participated in the backup generator rule or provided comments to EPA.  When, during the course of the rulemaking, a commenter suggested that EPA work with FERC, this was EPA’s response:

the rulemaking’s purpose was to address emissions from the emergency engines “and to minimize such pollutants within the Agency’s authority under the CAA. It is not within the scope of this rulemaking to determine which resources are used for grid reliability, nor is it the responsibility of the EPA to decide which type of power is used to address emergency situations.”

This statement did not make the Court happy:

EPA cannot have it both ways it [sic] cannot simultaneously rely on reliability concerns and then brush off comments about those concerns as beyond its purview. EPA’s response to comments suggests that its 100-hour rule, to the extent that it impacts system reliability, is not “the product of agency expertise.”

And why is this relevant for the GHG rule?

First, because EPA had better consult with FERC and NERC, so that it can defend any statements it makes in the GHG rule about its impact, if any, on reliability.  Second, it’s clear that the court will not show deference to EPA’s conclusions about reliability, since that is not within the scope of EPA’s expertise.