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Environmentalists protesting in front of the White House are arguing that the Administration should deny the Presidential Permit due in part to the lifecycle greenhouse gas (GHG) emissions associated with the oil sands.  One of the organizers of the protest, James Hansen, argued that it would be “game over” for the earth’s climate if the Administration approves a Presidential Permit for the Keystone XL pipeline. 

Research, however, contradicts Hansen and others’ claims regarding the impact of Keystone XL on climate change.  A Department of Energy commissioned study released earlier this year found that global levels of GHG emissions will not be significantly affected one way or the other by the construction of the Keystone XL project.  The study also concluded that oil sands production will not be affected by whether Keystone XL is built or not. 

Additionally, IHS Cambridge Energy Research Associates released last year a study that found that lifecycle GHG emissions associated with the oil sands are on par with conventional crude imported from Nigeria, Venezuela and some domestically-produced oil.  Consequently, the displacement of heavy crude from Venezuela and other importers with Canadian crude in Gulf refineries is unlikely to result in any material change in net GHG emissions.  This study reached this conclusion after conducting a meta-analysis of thirteen publically-available studies on the lifecycle emissions associated with the oil sands. 

Restrictions that limit access to domestic markets for Canadian oil sands will likely result in Canadian producers shipping crude oil to Asia for refinement.  This scenario raises the risk of emissions leakage because shipping Canadian crude to Asia would likely increase lifecycle GHG emissions associated with the oil sands.  The emissions associated with shipping crude derived from oil sands to Asia would also likely be substantially higher than comparable emissions associated with transporting the crude oil from Alberta to the Gulf Coast region.  Refining Canadian crude in Asia could also have other negative environmental consequences because China and other Asian countries have less transparent and vigorous environmental regulations of the refinery sector than those in the United States.   

This analysis of GHG emissions says nothing of the significant energy security and economic benefits associated with Keystone XL project.  As noted by the DOE study, increased oil sands imports to the U.S., coupled with reduced domestic demand, “could essentially eliminate Middle East imports longer term.”  The project is also projected to create over 20,000 jobs, along with providing states and municipalities with much needed tax revenue. 

Responsibly addressing climate change, while also sustainably developing energy resources to meet the needs of our global economy, is one the great challenges of our time.  Blocking the Keystone XL project, however, will not have a discernable effect on reducing global GHG levels.    

2011 results demonstrate that Airbus is pulling ahead of Boeing in new plane orders and the underlying reason is a more thoughtful private sector and government strategy for clean energy coming out of Europe. The 2011 Paris Air Show was the best ever for Airbus, earning firm orders for 418 aircraft worth about $44 billion at list prices, compared to only 47 planes valued at $7.5 billion for Boeing according to one industry figure.

Glen Hurowitz at the Center for International Policy writes in a recent Grist column that “the results are due almost entirely to Airbus’ new hyper-efficient 320neo model, which is a whopping 15 percent more fuel efficient than Boeing’s options, meeting buyers’ demands at a time of high fuel prices and growing concern over greenhouse gas emissions.”  This translates into approximately 1 million American jobs lost to European competition because of new orders for more efficient Airbus planes.

A mixture of a price on carbon in Europe, coupled with a strong corporate culture to increase efficiency create this Airbus advantage. On the legal side of the equation, the European Union’s Emissions Trading System (EU ETS) will begin to regulate carbon emissions for airlines landing within EU borders starting in 2012 with a view to cutting airline emissions over time. Meanwhile, Congress has completely dismissed the concept of cap-and-trade regulation for the foreseeable future. Additionally, the Air Transport Association of America is fighting the applicability of these pending costs when U.S. Airlines land in the EU. In addition to the trade association efforts, the Obama Administration will likely consider options to fight the applicability of the EU ETS laws on U.S. airlines, citing potential violations of international law as noted in the New York Times.

Beyond these legalities however, there is clear global demand for more efficient modes of transportation that are otherwise equal to their competitors in terms of cost and comfort. Airbus has an ecological vision out to 2050 that their CEO regularly touts irrespective of what the law requires.  But certainly that vision recognizes the growing number of countries that are regulating carbon through a variety of policies and measures.

Ultimately it is a better use of time and energy for Congress and the Obama Administration to adopt “equivalent measures” to the EU ETS that encourage innovation and scaled-up efficiency.  A litigious approach aimed at thwarting the inevitable global trend towards increased efficiency in the airline industry will cost a lot of time, money and U.S. jobs. 

Recall that this court previously dismissed the case on political question doctrine and standing grounds. The Fifth Circuit had once reversed and let the case go forward. But then the decision was vacated and for procedural reasons the court could not hear the case. The court lost the quorum for en banc review.  Application of court rules led to the reinstatement of the trial court decision. Plaintiffs filed a writ of mandamus with the Supreme Court but the Court did not grant it. 

After all of those procedural machinations, now the case is back. Plaintiffs rely on the following Mississippi statutory provision as a basis for refiling some of the same claims:

If in any action, duly commenced within the time allowed, the writ shall be abated, or the action otherwise avoided or defeated, by the death of any party thereto, or for any matter of form, or if, after verdict for the plaintiff, the judgment shall be arrested, or if a judgment for the plaintiff shall be reversed on appeal, the plaintiff may commence a new action for the same cause, at any time within one year after the abatement or other determination of the original suit, or after reversal of the judgment therein, and his executor or administrator may, in case of the plaintiff's death, commence such new action, within the said one year. 

Miss. Stat. § 15-1-69. Plaintiffs apparently wanted this action on file when AEP was decided or they simply wanted to file before the one-year deadline in this statute. It will be interesting to watch the reaction to this.

Two events occurred last week that could spur momentum for CEDA.  First, the Senate Energy Chair Jeff Bingaman (D-NM) outlined his energy agenda for 2011 in which he called for the creation of CEDA.  This development was expected given that Senator Bingaman has been an ardent supporter of CEDA, but his comments reflect that this issue will be a priority for him this year.

Secondly, the U.S. Chamber of Commerce unveiled its 2011 Energy Plan that included explicit support for a “clean energy bank”  that provides financing for nuclear and renewable projects.  The Chamber’s endorsement could provide some political cover for Republicans, particularly in the House, to support CEDA.  House Republicans are expected to ratchet up oversight of DOE’s loan guarantee programs initially created by the 2005 Energy Policy Act and expanded by the stimulus bill, along with other tax incentives for renewable production.  The establishment of CEDA as an independent agency could offer a way to reform these programs.

Moreover, in a period of fiscal austerity, CEDA is an attractive option to spur clean energy since supporters argue that it would only need some initial seed money to get off the ground.  Waxman-Markey proposed that the Department of Treasury provide CEDA with the authority to issue $7.5 billion in “green” bonds to support the project.  Under the Senate bill, the Treasury would transfer $10 billion to help start CEDA.  After the initial start-up funding, CEDA is designed to operate on a self-sustaining basis with any resulting profit from its activities going to the U.S. Treasury. 

The adoption of any energy legislation is never easy, and there is concern that CEDA could allow for unlimited loan guarantees that reward the more expensive and risky technologies.  Nonetheless, the Chamber’s endorsement, coupled with Sen. Bingaman’s commitment to the issue, provides a significant opportunity for the nuclear and renewable industries.  

The Supreme Court, however, previously had agreed to review political question doctrine and standing issues in the climate change context in AEP v. Connecticut, No. 10-174 (certiorari granted Dec. 6, 2010). A decision in that case is expected this year. The Comer decision also does not prevent plaintiffs from filing new climate change-related tort suits in the Fifth Circuit. The Comer trial court decision is persuasive authority only even in the Southern District of Mississippi.

Here’s a list of Four Green Bright Spots:

1. Pouring Money Into Water. The Environmental Protection Agency’s funding will increase roughly 30 percent from the $7.6 billion in the fiscal 2009 omnibus to $10.5 billion.

There’s a massive increase for water infrastructure, including $2.4 billion for the Clean Water State Revolving Fund, a low-interest wastewater loan program that helps states construct water treatment facilities. (The fund received just $689 million in fiscal 2009.) The Drinking Water State Revolving Fund would receive $1.5 billion, up from $829 million this year.

2. Carbon Infrastructure. The EPA will dedicate $17 million to the development of a GHG registry for US greenhouse gas emissions. As we’ve written before, this is a necessary first step toward regulating carbon emissions.

3. Oil is Out. Over at the Department of Energy, the proposed spending is flat from last year. Of course, that doesn’t include the nearly $40 billion showered on the department from the stimulus law for alternative-energy and efficiency initiatives. There are significant changes in emphasis on spending, though when it comes to fossil fuels. The budget completely cuts funding for the oil research and development program authorized by the 2005 Energy Policy Act. Finally, a budget that leaves behind the perverse incentives supporting fossil fuels that are costing us so much more than their sticker price.

4. Adaptation Gets Attention. State Department is contributing $600 million to two World Bank funds, one that supports clean technology in the developing world and the other that helps spur adaptation solutions in countries struggling with climate change. Over at Interior, the department is touting $183 million in increases for clean energy and the mitigation of climate impacts on the home front.

I’m sure there’s more to find, but the four points give some sense of this extraordinary bright green spending plan that, if adopted, will change the federal government’s impact on the economy.

Our discussion yesterday, chaired by Obama transition figure Howard Learner, explored how a variety of high profile initiatives -- from the recent stimulus package (the American Reinvestment and Recovery Act or ARRA) to a proposed renewable electricity standard to cap-and-trade legislation -- will affect green technology development. There was general agreement that a virtuous cycle is developing: the stimulus package should help pave the way for cap-and-trade because it will help build the constituency for it. Meanwhile, energy efficiency investments will provide a bit of momentum toward GHG reductions in the near future.

More than a plank in a shipwreck, ARRA will make available specific tens of billions of dollars at the very time green technology might have faltered. We spent a great deal of time talking with car battery innovators, solar installers, wind energy project developers, fuel cell companies, energy efficiency retrofit and system designers, and others who have carved out a niche in the green creativity space that more than justifies Friedman's hopes for a sustainability-powered era for US technology.

Yet, we also explored the dark side of this improving picture. Plowing so much money into “shovel-ready” projects so quickly will inevitably benefit some not-so-green projects. Those stimulus expenditures will help entrench an infrastructure that has to be greened all over in the future.

But for now, the bright side seems, here in Las Vegas, to be ascendant.

Greenhouse gas reporting is a crucial step in setting a price on carbon emissions, since it would be very hard to implement a cap-and-trade system or even a carbon tax effectively without some transparency about how much carbon is being emitted from where. For the first time, large emitters across the economy will have to conduct greenhouse gas inventories and report them to the federal government.

The Bush administration missed a preliminary September deadline submitting rules, putting it in danger of missing a final deadline of this coming June. With the Obama administration, this rulemaking appears to be a priority and there’s reason to believe the agency can complete its work this spring in time to start collecting data in 2010.

According to a source quoted by InsideEPA.com (subscription required) the proposed rule would mandate reporting for any facility releasing 25,000 tons of CO₂e on an annual basis.

The Post is right, and here’s why: we can impose emissions restrictions on the cars Detroit produces or we can shape the demand for Detroit’s products. Emission regulations like the ones California will pursue will do the former, but a consistent and high gasoline price signal will do the latter. If it were adopted, it would likely produce real emissions reductions more quickly and efficiently. There are many ways to do this, and Congress knows all of them. But the important thing is to support gas prices at consistent and high enough levels to allow market incentives to go to work. Cap-and-trade? Perhaps. Or a gas tax? Perhaps. And rebates to the public, as the Post says, are entirely consistent with this strategy.

It’s only been six months since John McCain and Hillary Clinton called for gas tax holidays during the Presidential race. President Obama wisely refused to support those efforts. Is he willing to go even further and work for a “a gradual rise in fuel prices that would not shock the system,” as the Post put it? Is Congress willing to do the same? That would be leadership.

It would also be leadership if the auto manufacturers took the initiative, as I suggested yesterday, and softened the path for the Administration and Congress by convening key interest groups and agencies to join with them in fashioning a single omnibus vehicle performance standard. Who knows? Out of such a group might come consensus on a gradual rise to a sustained gas price level that would incentivize people to buy fuel-efficient low-GHG emissions cars.

The Environmental Protection Agency (EPA) is working with the DoD to identify military uses of SF6 through such efforts as the fifth conference on "The Importance of Military Organizations in Protecting the Climate" which will be held this November in Paris. DoD’s addition of SF6 to the action list is one way of acknowledging that the military could play an important role in reducing greenhouse gas emissions – a point agreed upon 7 years ago at the 2001 conference – and will serve to stimulate technological innovation in both the public and private sectors. Additionally, with a market price of about US$25,000 per metric ton of SF6, the cost savings of finding alternatives to SF6 is surely appealing.

The EPA also has two voluntary Emission Reduction Partnerships in place that aim to reduce SF6 emissions through voluntary reductions, cost-efficient technologies, and other practices. Since the EPA’s implementation of the Emission Reduction Partnerships for Magnesium (in 1998) and Electric Power Systems (in 1999), SF6 emission rates in the US have gone down. Currently, the only other frameworks for curbing SF6 emissions are California’s proposed mandatory reporting under its reduction strategy for greenhouse gases and the Chicago Climate Exchange’s voluntary carbon reduction and trading program.

Approximately 8,000 metric tons of SF6 are produced annually, of which about 80 percent is used by the electrical power industry for arc interruption, cooling, and insulating. However, SF6 is also used to protect metals during the melting process, as a filler of double paned windows for soundproofing, as a tracer gas, and for medical procedures and testing. SF6 was, at one time, even used in the manufacturing of tennis balls, car tires, and sneakers. The point is, SF6 is an incredibly useful substance that is difficult to replace and, at the same time, it is clearly contributing to the decline of our environment.

Companies such as Nike have worked hard to replace SF6 with more environmentally friendly options like nitrogen, due to both the desire to be socially responsible and stakeholder pressure. In Nike’s case, it took nearly 14 years to develop an alternative technology to the SF6-filled Nike Air pockets. However, the company’s discovery that blow-molding 65 layers of plastic would allow for the use of nitrogen instead enabled Nike to actually improve their product line. The AirMax 360, for instance, has full length air cushioning in the sole that was made possible only by this new technology.

DoD’s plans to curtail uses and releases of SF6 in the procurement chain is consistent with its Green Procurement Strategy, which was implemented in 2004. The changes in procurement requirements will limit the ability of DoD contractors to sell products to the DoD that contain unnecessary amounts of SF6 as determined by DoD’s Phase II quantitative impact assessment. The decision by the DoD to cut back on SF6 use at all levels should push forward the timeline for increasing research and development on potential substitutes and clean up technologies.

In the future DoD may consider adding other GHGs to the list, which would place further restrictions on the supply chain. For the time being, the biggest hurdles for the DoD in reducing SF6 use will remain finding an alternative to SF6 for radar domes on AWACS aircraft and curbing its use in electrical equipment insulation. The good news is the Air Force has already begun to limit or eliminate the use of SF6 where possible which may yield best practices that the rest of DoD could follow. Additionally, DoD has implemented procedures for loading and tracking SF6 that have already resulted in a reductions of SF6 use; DoD continues to focus on reducing SF6 emissions through recapture and reuse; and DoD is supporting the research and development of substitutes, such as nitrogen, and new technologies.

* The only known substance to have a GWP higher than SF6 is Trifluoromethyl sulphur pentafluoride (SF5CF3), a close cousin and supposed byproduct from SF6 breakdown in high voltage electrical equipment, which is found in such small quantities that it has barely been discussed since its initial discovery in 2000.

The impacts of an altered climate – coastal erosion and inundation, health effects, drought, and extreme weather events – are expected to be more severe in developing countries. The choice of means to provide climate adaptation assistance to developing countries is fraught with the greatest policy ramifications. Should aid be provided through technical expertise, direct grants, loans, or combinations of these?

As members of the community of nations, wealthier countries historically have had no problem stepping forward to help correct global disparities in economic development, public health, and human rights protection. But to be told that their greenhouse emissions have caused massive harms for which billions in reparations are now due causes many developed nations to question how to proceed. Yet, the debate over direct aid grants vs. adaptation loans has now taken on precisely this dimension. International reparations payments for aggression and injustice have a long and tangled history.

If adaptation assistance is provided to right past wrongs, then some may argue that a developed nation's generous adaptation assistance can be taken as an admission of wrongdoing, a basis for civil liability. The same facts, the same analyses, stand behind both the climate-justice rationale for legislative aid to counter climate impacts (S. 3036 SEC. 4801-4804) as underpin the several suits now making their way through the courts seeking damages for “climate torts.”

If loans are provided instead of direct grants, does this evade the difficulty? Perhaps, but the concept of loans to be paid off with interest does not sit well with advocates for adaptation and “climate resiliency” aid to the developing world. The UK has offered $1.56 billion to be incorporated in a World Bank adaptation fund, but the UK has indicated that the fund is for loans, not grants. Advocates say debt-stressed developing nations should not be loaned, but given, the aid that is owed for the damage greenhouse emissions have caused over time.

Also, advocates are questioning the pivotal role the World Bank group is angling to play in deciding where and how any funds are to be invested. They want a role in deciding how the pie will be sliced, not unlike stakeholders in the US debate over the revenues from cap-and-trade want a say in any federal revenues will be distributed.

Where does this issue stand in the US today? Because the US is not a Kyoto signatory and has not offered funds, the adaptation debate in the US is just beginning. Each of the concerns addressed above will figure into the US's legislative debate in the coming months. What is almost certain is that some of the huge revenues of the Lieberman-Warner bill's cap-and-trade provisions will be earmarked for adaptation assistance. Other legislative proposals are also in the wings. Watch this space.

With all the publicity aircraft greenhouse emissions are receiving, one might conclude that they rank right up there with electrical utilities, vehicle emissions, and other prominent categories in terms of greenhouse threats. In fact, US aircraft operations account for 10 - 12 percent of greenhouse emissions from the transportation sector and for only about three percent of total US greenhouse emissions, which is also about the total percentage contribution to greenhouse gases from aviation worldwide. The difficulty is, controlling aircraft carbon emissions is a particularly intractable problem, and the problem is going to become much worse over the next few years as demand for air travel and transport doubles or even triples by 2025. The issue is exacerbated by scientific uncertainty about just how much more potent at high altitudes aircraft emissions are in causing the greenhouse effect as compared to emissions on the Earth’s surface.

The airline industry has done a great deal already, however, to increase its efficiency and lower the rate of increase in greenhouse emissions per air mile traveled. The industry claims that improvements in operational efficiency over the past 30 years have reduced carbon dioxide emissions 70 percent in the course of improving fuel efficiency 110 percent. The most promising pathways at present to further reduce the carbon footprint of aviation involve improved air traffic control systems, on-ground aircraft operations management, lighter engines and more aerodynamically designed aircraft, and flight altitude and speed adjustments. Still, attempts to improve jet fuel composition and performance have received the lion’s share of attention in recent months.

Finding less climate-challenging fuels for today’s jet fleet is proving to be a particularly challenging and controversial topic. Some promising experiments in fueling aircraft reminds one of a trip to a botanical garden, to a marsh, or to the supermarket, or of the early days of flight at Kitty Hawk. Recent forays include biofuels derived from babassu nuts, coconut oil, algae, or the central American plant, jatropha (a relation of castor oil). A very light, albatross-like solar-powered aircraft is under development in Germany, while Boeing has actually flown – for twenty minutes at 60 miles an hour – a manned aircraft powered by hydrogen fuel cells and lithium battery-stored electricity. But the major battle over alternative aircraft fuel is taking place over fuel liquids derived from coal or oil (tar) sands.

Coal-to-liquids (CTL), whether for aircraft or for other consumption as a fuel, is hardly new. Germany pioneered the process in the Second World War, and for the past nine years South African Airways has flown its jets on a 50-50 mixture of CTL synthetic and ordinary commercial fuel. The US Air Force has completed a test program very much like the South African fuel mix, using 50 percent Fischer-Tropsch synthetic fuel and 50 percent commercial fuel. Even B-52s can safely burn the fuel.

The Air Force and members of the Senate and House from coal-producing states, not to mention proponents of tapping the vast reserves of oil sands in Canada, are pushing strongly for development and use of CTL aviation fuels. The difficulty is, among other things, that a lifecycle analysis conducted by the US EPA found that CTL fuel releases 118.5 percent more greenhouse gases than conventional fuel (EPA, 2007). Perhaps carbon capture and sequestration technology, were it to be developed, could be used to overcome this large carbon deficit? No, said EPA, even after going to the difficult and expensive effort of capturing and sequestering CTL carbon compounds, emissions would still be 3.7 percent greater than for conventional petroleum. The Defense Department has already asked MIT to study the lifecycle carbon profile of CTL production and use, and Senator Lautenberg intends to re-insert in the Federal Aviation Administration funding re-authorization bill making its way through Congress a provision requiring the National Academy of Sciences to organize a study committee to address the question. While these studies are pending it may be correct to say that the jury is still out on the climate implications of CTL and other alternative aviation fuels, but it is clear that widespread adoption of CTL and oil sands to liquids fuels would be accompanied by major environmental challenges.

The Air Force is particularly partial to CTL as a source of aviation fuel and is aggressively pursuing its development. However, a major study done by the Defense Science Board Task Force on DoD Energy Strategy at the request of the Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics, titled “More Fight – Less Fuel,” has concluded that domestically produced synthetic fuel will not contribute to the DoD’s most critical fuel problem – delivering fuel to deployed forces. The Task Force, co-chaired by James Schlesinger and retired General Michael Cairns, wrote that full carbon life-cycle analysis should be performed and that synthetic fuels should have a carbon footprint less than conventional petroleum fuels before they are adopted.

This last remark may be directed at a DoD-commissioned legal analysis attempting to show that in the Energy Policy Act of 2005, Congress did not intend for the military services to be considered as “federal agencies.” Why? Because section 526 of the 2005 law bans federal agencies from purchasing any fuels that produce higher levels of greenhouse gases than conventional jet fuels. (This provision is kicking up sand in many quarters and may not survive the political pressure that is being brought to bear.)

The EPA plans to join with the FAA in considering regulation of aviation greenhouse emissions in the course of the climate “town hall” comment period that EPA has called for to gather thoughts about using the Clean Air Act to broadly regulate greenhouse gas emissions, a topic we have covered in an earlier blog. The European Union first tried to ignore aircraft greenhouse emissions in its first round of actions under its climate authority (the issue, is, as we said above, a very difficult one), but it is now considering requiring airlines to participate in the emissions trading system.

The debate over how the US will attempt to come to grips with the difficult issue of direct aircraft engine emissions of greenhouse gases is just getting started.

Less than a decade has passed since the accepted wisdom was that the US would enact a greenhouse gas control regime to implement the framework climate treaty and the Kyoto Protocol, which the Senate would have ratified after much debate. Yet today it appears that our national climate strategies are going off in unanticipated directions that would have astonished the climate pundits of ten years ago.

Last December, Congress enacted a fuel, vehicle mileage, and overall energy efficiency law that will clearly help lower carbon emissions. The Senate will vote on a comprehensive climate bill in June, if the sponsors have their way, but that bill is a far cry from implementing legislation for Kyoto. The states may soon have blanketed a large part of the nation with regional and state climate initiatives that will be so pervasive that they will set the bar for the key components of over-arching federal legislation – and preserve a major role for state and local governments. There is even talk of bilateral climate agreements with India and China, and also a totally new international approach that would target greenhouse gas emissions sector-by-sector across the economies of the developed nations.

Furthermore, while all this is taking place, it appears that the Environmental Protection Agency and the environmental community have discovered – with the help of the Supreme Court – that the US has had a greenhouse gas regulation law in place for decades, well before Kyoto. By ruling a year ago that greenhouse gases are “air pollutants” under the motor vehicle emissions control provision of the Clean Air Act, the Court made the entire Act a little pregnant with the potential for federal regulation of all manner of greenhouse gas sources – the thousands of sources controlled under state implementation plans to achieve federal ambient standards, new and modified stationary sources, emitters of air toxics, sources in clear-air areas of the country, and others regulated under the Act. The particular trigger for new motor vehicle emissions regulation is a statutory determination that greenhouse emissions may reasonably be found to endanger public health or welfare, but other Clean Air Act provisions contain the same or a similar trigger for greenhouse “air pollutants” as well.

The key Clean Air Act provisions involved were rather elegantly analyzed for a House subcommittee on April 10, 2008 by the EPA’s air program administrator Robert Meyers in 19 pages of testimony, which he prefaced by saying that a full explanation “could easily fill a text book.” The relevant sections, most of which are covered in the seven petitions states and private organizations have filed, are an alphabet soup of the Clean Air Act specialists favorite programs: NAAQS, SIPs, PSD BACT, Non-attainment RACT, NSPS, HAPS MACT, aircraft, ship, and locomotive emissions provisions, and the welter of road and non-road vehicle and equipment engine and fuel emissions requirements that the Act authorizes.

To plunge into the greenhouse ramifications of any one of these programs is to plunge deep. Our Ports and Harbors Practice, for example, is considering the myriad of greenhouse gas controls that may be relevant to shippers, port authorities, transportation networks, and others on, or on the way to or from, the nation’s ports and harbors.

The EPA has tried to put off the reckoning, but the Clean Air Act has been held to be applicable to greenhouse emissions. The question is, can we live with it – can we make it work as a climate statute? States and environmental groups appear at first to be saying yes, we can, but the EPA is skeptical and has initiated a national head-scratching over the issue. The groups are pressing for a court order for EPA to come clean and issue the endangerment finding, which the groups say they have conclusive evidence that the Agency has already made. The EPA has come to the brink of making the endangerment finding more than once, only to recoil from taking the first fateful step toward conscripting the Clean Air Act into the federal climate arsenal.

Recently, the Agency has contrived to prolong its agony. It announced that it would issue an advanced notice of proposed rule making this spring inviting the public to offer its comments on climate science (endangerment) and “the broader ramifications” to “many relevant sections of the Clean Air Act” of using it as the primary policy tool for controlling greenhouse emissions. These comments would then help the Agency issue a second proposed rule that would set forth the Agency’s views on how to comply with last year’s Court decision.

The environmental plaintiffs are pressing hard for a court order requiring EPA to make the endangerment finding. They argue that the Supreme Court’s decision leaves no room for the EPA to organize a national town hall meeting on the advantages and disadvantages of using the Clean Air Act to control greenhouse gases. They reason that the Court required the agency to make an endangerment finding or give cogent scientific reasons why it could not. No other paths lie open, they say. 

The Agency’s invitation for public comment seems designed to resurrect its view, rejected by the Court, that the Act would provide only an “inefficient, piecemeal approach” to controlling emissions and that a regulatory scheme that included “all significant sources and sinks” would be best. Perhaps. But an agency rule making is not the place for this legislative debate, one which Congress has already initiated and seems inclined to bring to a conclusion in a time frame that may turn out to be less protracted than EPA’s two-step rule-making process is likely to be.

In fairness to EPA, regulating greenhouse emissions through the Clean Air Act is likely to be a bit like opening Pandora’s Box to find a Trojan Horse inside. The statute may reach greenhouse “air pollutants,” but just barely, and its extensive implementing provisions were not designed with climate protection in the front of the congressional mind. The Agency appears to have concluded, we think correctly, that if it regulates motor vehicle greenhouse emissions as the states and environmental groups demand, they have to act favorably on petitions that the groups have also already filed to regulate the greenhouse emissions from a full Mother Hubbard’s cupboard of emitter bones and snacks already alluded to – airplanes, ocean vessels, off-road and recreational vehicles, sources in mining, agriculture, and  construction, outdoor power equipment, and the like. This may not be the systematic, finely tuned, and comprehensive solution the nation deserves to the climate challenge, but such is the logic of  the situation in which US climate policy is now mired. 

It may well be that the states and environmental plaintiffs are forcing the issue on the Clean Air Act, not actually expecting or even wanting to remake it as a climate protection statute. Their purpose may be to force Congress to reach the same conclusion EPA has reached and thus pressure Congress into enacting a comprehensive climate law before the courts turn the Clean Air Act into a greenhouse gas nightmare. Chairman John Dingell appears to have fallen hard for the strategy, recently calling for federal cap-and-trade legislation to correct the “hideous mistake” the Supreme Court made. But in the meantime, the EPA is obliged to try to reconcile existing law with demands for piecemeal greenhouse regulation under the welter of Clean Air Act provisions that various groups have lined up like dominoes, ready to ask the courts to tip over.

EPA’s strategy has been dismissed by state and environmental groups as one of delay until the Administration comes to an end January 20, 2009. Listening to the skillful but beleaguered EPA Administrator at press conferences on the President’s program lends some support to this view. But Administrator Johnson does make a point that while the Clean Air Act Endangerment Stew is simmering, Congress has enacted – in important part with Administration endorsement – a law that actually may lower vehicle and other carbon emissions below the steep upward trajectory they were on only a couple of years ago. The Energy Independence and Security Act (EISA) of 2007 specifies a national mandatory fuel economy standard, a “CAFE standard,”  of 35 miles per gallon by 2020, which should, the White House says, increase vehicle efficiency by 40 percent. The new law also hikes the renewable fuels mandate passed in 2005 to 36 billion gallons by the year 2022 (although plenty of pundits have begun to point out the climate and air quality downside of corn ethanol.)  The new Act includes a lighting efficiency requirement for phasing out incandescent bulbs by 2014 and lighting efficiency improvements of up to 70 percent by 2020. There are also significant appliance and federal operations energy efficiency requirements in the legislation.

Based on the President’s “20 in 10” program set out in his 2007 State of the Union message (20 percent reduction in gasoline use by 2010), the Administration’s other energy savings and “green” source programs, and the EISA, the EPA has argued, somewhat logically, that all these measures are more effective than – or at the least the functional equivalent of – the command-and-control regulations that may in time be served up from the Clean Air Endangerment Stew. In fact, EPA has suggested in the past that these steps comply legally with the Supreme Court’s decision in Massachusetts v. EPA. This is what the national town hall advanced notice of proposed rule making is all about. It is also the current version of the rule making that EPA once wanted to launch, i.e., a multi-departmental rule that would involve several statutes (including the Clean Air Act) and implement the President’s 20-in-10 agenda.

More fundamentally, the Clean Air Endangerment Stew has now locked the courts, the EPA, and Congress in a struggle over how tripartite constitutional government should approach climate policy, a classic separation of powers issue that only lacks the states to make this a battle over federalism as well. As we move forward on climate in Congress, it might be wise to heed the admonition of Chancellor Bismarck. “Do not ask how legislation and sausages are made.”

Most recent climate-oriented discussions of water supply and quality have focused on the potential for altered precipitation, stream flows, groundwater recharge, and other impacts of regional climate change. These impacts are more likely than not to be severe in some locales, and thought is being given to the development of new infrastructure to address these changes (see related item on climate adaptation). But in addition to these obvious impacts on water supply and quality, it is now apparent that "non-trivial" greenhouse gas emissions are associated with the treatment of drinking water and sewage.

Nitrogen oxide and methane emissions from drinking water and wastewater facilities almost certainly will be regulated under federal climate legislation. These facilities, which are most often publicly owned, are a perhaps unexpected addition to the list of economic sectors economically impacted by climate legislation, although our climate practice has failed to identify a single sector that is not affected in one way or another, including banking, insurance, and entertainment. Thus it is not too early for states, municipalities, local water districts, and the companies that work for them in drinking water and sewage treatment businesses to consider what their obligations may be under pending climate legislation. 

As a target of climate regulation, water and sewage treatment facility operators need, beginning now, to develop their strategies to address the advantages and disadvantages of early action, cap-and-trade, legislatively allocated emissions rights, reverse auction benefits, and the like. Complaining of "unfunded mandates" imposed on state and local governments due to federal requirements may achieve some traction; however, much more can be achieved by thoughtful attention to the upside as well as the downside of the legislative debate over GHG control legislation.

Consider for a moment what a proactive water supplier or sewage treatment operator might achieve by up-front, prompt investment in infrastructure to reduce GHG emissions for the express purpose of generating marketable GHG reduction credits. The economics are critical, but it might be possible for the operator to sell these emissions rights into the voluntary emissions reductions (VER) market that exists in the U.S. today. It could then go on, importantly, to use the reductions later in any legal cap-and-trade scheme. Proceeds could be used to partially offset capital  investment. The reputational gain with the public of undertaking such a program right now should also be considered.

A water supplier or sewage treatment operator would need to create the program expressly for the GHG reduction purpose, to avoid the problem of "additionality," i.e., the infrastructure investment would not have been made anyway for some other purpose so that the GHG reductions would have happened as a byproduct of some other objective.

We mentioned the economics of such a plan. Trifling returns on huge investment would scuttle the project. But keep in mind that the global warming potential (GWP) of methane and nitrogen oxides are much higher than that for carbon dioxide, the runaway GHG of usual interest.  Methane is already captured and burned at some water utilities, but it still is a GHG of some interest  because there is so much of it, and because its GWP is 56 to 72  times that of CO₂ in a twenty year time horizon (the factor varies depending on what residence period, conditions, and source one cites). Nitrous oxide's GWP for twenty years is 310 times that for CO₂, again subject to the caveat. (To refine the GWP that would apply requires some technical work, but the rough-and-ready conclusion is that whatever VER price carbon dioxide would command, methane and NOX VER prices would be a high multiple.)

Also keep in mind that unlike some GHG credit generation efforts, culinary water and sewage treatment facilities would keep on producing credits year after year. Production of VERs would keep pace with the quantity of drinking and waste water treated. By contrast, biomass VER generation, e.g., planting trees, only gives a one-time collection of VERs, although if the trees are sustainably harvested, some additional credits might accumulate for the wood used in building and furniture that sequestered the carbon semi-permanently.

Water managers have their hands full with tight budgets, other federal mandates, and, in some areas, drought, destructive invasive species like quagga mussels, endangered species protection, new contaminants like pharmaceuticals and disinfection byproducts (all benefits that also create risks, and the usual metals and minerals contamination). But the climate threat must be faced down by water and sewage utilities, not only doing their part, but finding opportunities to do so in the most beneficial and cost-effective manner. 

Economists sometimes bear the brunt of criticism for pointing out what the rest of us don't like to hear. They seem determined to ruin the party, by pointing out that costs accompany benefits and that there is no free ride in the economy. Theirs, it has been said, is the dismal science, and it was for good reason that Malthus said of his own work that it had a “melancholy hue.”

For over a half-century, the Washington-based economics think tank Resources for the Future has tried to overcome some of the melancholy aspects of federal policy-making by proposing realistic, more efficient solutions to the economic burdens that environmental regulation imposes. Economists at RfF helped pioneer the emissions trading schemes that are now enshrined in the Clean Air Act's sulfur and nitrogen oxide schemes that are the models for the cap-and-trade provisions included in current climate bills. Now, RfF's realistic economists are turning to another aspect of the changing climate – the likelihood that national and global greenhouse gas emissions (GHG) reductions will not be enough in time to keep regional climate from changing significantly.

A new two-year RfF project, “Adapting to Climate Change,” has as its purpose developing an array of on-the-ground measures to allow our institutions to mitigate the effects of climate change, when and if it occurs. True to the tradition of RfF to seek effective and efficient solutions, the project looks to draw upon the natural sciences and engineering communities to identify climate impacts and the strategies we can employ to mitigate the severity of those impacts.

The effort will look systematically at freshwater resources, coastal and marine ecosystems, public health, agriculture, public infrastructure and land use, and terrestrial ecosystems and biodiversity. The World Health Organization, for example, drew attention to the severe potential health impacts of climate change on the occasion of World Health Day, April 7^th. With limited resources to meet the challenge, the project will try to establish principles to inform the choice among options, a means of ranking the threats and solutions, selection of the appropriate levels of governmental response, and means of financing adaptation measures that are sure to be quite expensive. The final product of the project may be a “Climate Adaptation Response Policy” that can help guide the nation's efforts when and if climate adaptation becomes a necessary part of the national response.

The project is guided by a broadly-selected interdisciplinary Steering Committee. Its members include McKenna's Fred Anderson, who has a long relationship with RfF in a number of areas.

Malthus’ view had a melancholy hue, but fortunately his speculations about human birth rates and population outrunning available resources and causing a dire overload of the earth's ability to cope were, to put it in the most generous light, premature. Perhaps predications of catastrophic climate change will also prove unfounded, either because nations manage to control GHG releases in time, or the science of climate change proves to be more forgiving than currently anticipated. But RfF deserves to be commended for taking one of the few meaningful steps to address the likelihood of significant impacts from global warming trend and to encourage clear-headed thinking about what can be done to adjust to the changes in weather pattern and severity, freshwater availability, irrigated agriculture, and the many other sectors likely to experience major change if the climate threat materializes.