The New York Legislature Takes Action on a Number of Pieces of Legislation Related to Climate Change
The 2008 New York legislative session came to a close on June 27th. With so much attention on climate change and rising energy prices, its not surprising that several pieces of legislation relating to the environment and energy were passed by both the State Senate and the State Assembly and are currently awaiting action by the Governor.
One significant legislative initiative driven by Governor David Paterson was the adoption by the Senate and Assembly of an expanded net metering law to allow businesses, municipalities and non-profit utility customers to receive credit on their utility bill for excess energy produced through solar or wind technologies. Under current law only residential customers are allowed to sell power back to the utilities. While non-residential customers will be capped at the lesser of 2 mega watts or their peak load, the expansion of net-metering is expected to further spur the development of solar and wind projects in New York.
The Senate and Assembly also came together to pass legislation that provides a 4 year real property tax abatement for solar electric generating systems placed in service in New York City. The abatement ranges from 5 percent - 8 ¾ percent of the cost of the solar equipment depending on whether the equipment is placed in service. Again, this legislation (coupled with the net-metering expansion mentioned above) is expected to spur development of solar projects in New York City.
Another lesser know legislative effort relating to the environment and climate change was the passage of legislation by the Senate and the Assembly establishing the New York State Greenhouse Gases Management Research and Development Program. The legislation amends the Public Authorities Law to authorize the New York State Energy Research and Development Authority (“NYSERDA”) to provide grants for research that promotes new technologies that will avoid, abate, mitigate, capture and/or sequester carbon dioxide and other greenhouse gases. The legislation authorizes NYSERDA to make grants of up to $150,000 to research entities in New York, but is subject to funding being included in the State Budget. Research entities are defined as not-for-profit colleges, universities or other institutions that conduct an intensive ongoing program of research and study.
One piece of legislation passed in the waning days of the legislative session by both the Senate and the Assembly that is just now starting to attract some attention is the Plastic Bag Reduction, Reuse and Recycling Act. This bill requires operators of retail stores over 10,000 square feet, retail stores with five or more branches of 5,000 square feet or more, and retail stores over 50,000 square feet in an enclosed shopping mall, to establish an at-store recycling program to include:
- a visible and accessible collection bin;
- a prohibition on the placement of plastic bags in a solid waste facility by stores;
- a requirement that stores make reusable bags available for purchase;
- a requirement that compostable plastic bags indicate that they cannot be recycled; and
- a requirement that plastic bags include the phrase "please return to a participating store for recycling" or a similar recycling message approved by the Department of Environmental Conservation.
The legislation establishes fines of up to $500 in cases where a person knowingly or intentionally violates the recycling program requirements.
Notable legislative efforts that failed during the 2008 session included a “bigger better bottle bill” to require container deposits on plastic water bottles, expanded regulation of wetlands, a power plant siting law for projects of 80mw or greater (draft legislation contemplated an expedited review process for clean energy or renewable projects), electronic waste recycling, and a greenhouse gas cap. All of these failed initiatives are likely to come back with greater support from the Governor (who only took office in March) in 2009 and may stand a greater chance of passage depending on the outcome of the State legislative races this November.
International Adaptation Assistance - the Dark Side of the Climate Debate
We have shared views in an earlier blog on climate adaptation, but recent discussion of responsibility for the overall global impacts of climate change leads us to return to the subject. For some time it has been clear that great care needs to be taken in how greenhouse gas reduction responsibilities are assigned to developing nations. They do not want to be denied the blessings of development in order to counter global warming created by the economies of the developed world over the past decades.
Now, a second major issue has surfaced. The developing world is going to need adaptation assistance – upwards of an initial $100 billion – as it experiences actual injuries from the changing climate. The issue is kicking up a lot of sand recently.
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.
Climate Change Compliance as a Business Opportunity
A great deal of attention is being paid to the development of multilateral and national accords and legislation designed to compel private industry to reduce carbon emissions. The key assumption underlying these efforts seems to hold that private industry worldwide cannot be counted on to initiate or facilitate carbon emissions reductions voluntarily, and certainly not as part of a preferred business model. But suppose for a moment that this assumption is not entirely correct, that private industry is in fact ready to start embracing climate change as a function of its own self-interest. The implications of such a trend could be far reaching.
The evidence is interesting. In 2007, the Carbon Disclosure Project (CDP), founded by Merrill Lynch, surveyed 2,400 of the largest publicly traded companies worldwide seeking detailed information on the perceived business risks and opportunities presented by climate change and global greenhouse gas emissions. While virtually all respondents recognize the risks, up to 80 percent of firms internationally also consider it an area that holds important business opportunity, with a majority considering the issue significant enough to include as an ongoing area of attention by board members and upper management. In the U.S., this includes an increasing number of companies adopting formal programs of climate change risk disclosure, impact and opportunities disclosure to their shareholders and in publicly filed documents.
This apparent shift is being driven, in part, by the private investment community. Investment banks, brokerage firms and insurance companies have started to channel their expertise and capital into identifying and implementing climate change opportunities, with new products emerging in the areas of risk management and finance. The trend initiated by these industry sectors, coupled with new legislation, consumer awareness and market demand, is resulting in a new focus on green activities in other traditional industries such as:
- Utilities, energy and materials production are focusing attention on retrofitting existing energy and industrial facilities to produce lower levels of carbon emissions, and creating new ones powered, in part, by new forms of renewable energy supported by a rapidly growing number of alternative energy technologies and technology companies supported by privately and publicly funded research and development.
- Consumer products and services industries are identifying clear trends among consumers to buy green products.
- The resort industry is a good example of a service industry that has discovered strong marketing and business advantages to offering green resort facilities and amenities.
In short, climate change has begun to acquire cache among consumers and the ramifications for this are just starting to be felt.
These shifts in industry perception of climate change are new and evolving, but if they continue to expand at the rate seen in the last 5 years, the positive implications for climate change are clear.
Climate Change and Aviation Fuel: A Tough Problem to Solve
Large aircraft require high energy fuel, and lots of it. But jet fuel is very difficult to clean up to satisfy climate protection imperatives, which has led to a major dispute in the US over the role coal-to-liquids and other alternative aviation fuels may play. Congress, the US Air Force, the major airlines, the US Environmental Protection Agency, its Federal Aviation Administration, a special Defense Department task force, coal-state senators, and many, many others are getting into the dogfight, which may go on for a long time.
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.
Climate Change Tort Suits: Hot or Cold?
Kivalina, Alaska, a village located eighty miles north of the Arctic Circle on a barrier island, is falling into the sea.
Since the early 1980s, sea ice ‑ which offers seasonal protection from storm surges ‑ has been forming later and melting earlier. As a result, the village is exposed to more winter storms of increasing severity.
In 2006, the US Army Corps of Engineers (“CoE”) concluded that the situation in Kivalina had become “dire” and that the entire town would have to be relocated within six years. A group of 400 Kivalina residents have filed suit against twenty petroleum producers, coal-burning utilities, and other energy companies, asserting that their carbon dioxide (CO2) emissions create a public nuisance and that they conspired to mislead the public about climate change.
Native Village of Kivalina v. ExxonMobil Corp. et al., CV 08-1138 (N.D. Cal., Filed Feb. 26, 2008). Citing a report by the CoE, the Kivalina villagers allege that environmental changes associated with global warming have exacerbated flooding and erosion threats to Kivalina and other coastal villages in the Arctic.
They seek recovery of the estimated $400 million cost to relocate their village, which they claim is a result of the defendants’ climate-changing activities.
By no means is the Kivalina suit the first action in which plaintiffs have sought to recover climate change-related damages from a CO2-emitting industry. Electric utilities and leading automobile manufacturers have each defended similar actions. They defeated these suits by filing motions to dismiss, asserting that the lawsuits raised a political question ‑ how best to address climate change ‑ which is the type of policy determination that should be reserved for the political branches of government, rather than the courts.
So long as the legislative and executive branches remain undecided on climate change, the political question doctrine promises to keep such litigation in check. Many observers, however, believe that Congress eventually will pass, and the President will sign, climate change legislation. At that point, courts may have less ability to dismiss cases on the ground of the political question doctrine.
How will these climate change tort actions fare then?
In this Legal Backgrounder, we explore the next line of defenses to such actions. In brief, defendants to climate change tort suits likely can assert several other facial challenges, such as lack of standing and preemption, which may stop such litigation in its tracks. Moreover, climate change suits must overcome formidable causation problems. The charge of civil conspiracy adds a new wrinkle: it is the same strategy that forced big tobacco to settle. There are numerous differences, however, between tobacco and CO2, which portend a steeper climb for plaintiffs in climate change tort suits.
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The US's Existing Climate Protection Laws: Will They Work?
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.”
Congress in 2008
Federal climate change legislation may be on the way. The Senate has targeted a vote in June, and the House by the end of the year, although a bill both chambers can agree upon is unlikely until 2009, if then. It would be a great mistake, however, to view 2008 as a lost year on the climate front. The fundamental elements of Senate and House bills will be debated and accessible to all who probe beneath the surface. The fundamental regulatory structure and economic impact of climate legislation will have been thrashed over thoroughly by the end of the year. To interested stakeholders, the time to weigh in is now. [summary]
While the candidates count delegates, key Senators and Members count votes and try to predict how far toward climate legislation the Congress will progress this year. The short answer: final legislation is not likely this year, although both chambers may come very close. Because the Senate has targeted a vote in June, and the House by the end of the year, it would be a great mistake to view 2008 as a lost year on the climate front, however. To get to these votes, or even to try to get legislation in shape for a vote, means that the fundamental elements of the Senate and House bills will be debated and visible to all who probe beneath the surface. Passage is quite likely in 2009, but the fundamental regulatory structure and economic impact of climate legislation will have been thrashed over thoroughly. The Congress in 2009 will not by any means be writing on a clean slate. To interested stakeholders, the time to weigh in is now – if not already past.
In the Senate, Senator Lieberman optimistically reports that he believes a vote would be veto-proof at sixty votes if the June vote occurs after the Lieberman-Warner bill reaches the Senate floor soon after the Memorial Day recess. But approval may falter if the many amendments Senators are likely to seek come into play. To reach the 60-vote total, the co-sponsors may have to agree to amendments that, while attracting support from fence-sitting senators, may cause others thought safely on board to fall off the fence. Thus, for the US Senate to approve a strong bill this year, the managers will have to walk a fine line from here on out.
Does Senator John McCain support the bill? His support for decisive action on climate is well-documented. But his desire and determination for a role for nuclear power in addressing the climate challenge may place a serious obstacle in the path of approval, because many "climate senators," including the Chair of the Committee on Environment and Public Works that has favorably reported out the Lieberman-Warner bill, Barbara Boxer of California, have expressed opposition to inclusion of incentives for nuclear power. When other ticklish issues are added to the long list of amendment-prone provisions, the prospects for passage this session look decidedly less optimistic.
In the House, Speaker Nancy Pelosi (D-CA) and special climate committee chair Edward Markey (D-MA) were not joking when on April Fools Day they expressed their determination to have climate legislation pass the House by the end of the year. But they have complicated their own task by stressing the importance of including India and China in climate solutions. Strictly speaking, there is no role for addressing these two nations' large GHG emissions totals in domestic US climate legislation; Pelosi and Markey are hoping that India and China will be addressed either through the Kyoto agreement process or through the time-tried pathway of bilateral agreements. But bringing up India and China, the twin Achilles' Heels of climate action, the two members appeared to be drawing attention to their critics' strongest reason for avoiding unilateral US action until the largest global emitters are brought into some sort of accord on joint action.
The issues to be addressed in a domestic climate law are truly daunting, and suggest that next calendar year, after the presidential election, is a more likely time to expect climate legislation for the US. Even then, the challenge cannot be overstated. The issues include negotiating out provisions to cover caps and baselines fairly and effectively, with key decisions to be made about how each plant, company, sector, and state will be expected to comply, not to mention vital assumptions going into a domestic framework regarding the limits to be placed on GHG emissions for the nation and the planet. Baselines need to be set, and the effects of mergers, acquisitions, and corporate reorganizations taken fairly into account. These issues exist even before taking up the much-discussed topic of the role trading/banking/offsets will play, especially vis-a-vis Clean Air Act-California AB 32-style performance standards. One of the very largest and most contentious areas will cover congressional decisions – no doubt after fierce lobbying – of the impact of legislation on different economic sectors (transportation, chemicals, manufacturing, not to mention electrical utilities and fuels production and consumption). In this connection, legislation can be made (or derailed) by proposed provisions regarding phase-in, byes and safety valves, and cost-spreading.
Allocating emissions allowances is about as controversial as the new legislation can possibly become, with major debate about the grandfathering existing sources, whether to auction all or just some of the rights to emit, and allowance retirement. After both creating enormous value in the form of legislative permission to emit GHGs, and auctioning or allocating the newly-minted rights to emit, already it is clear that a large federal direct and indirect subsidy program will be launched, that may favor green technology and conservation and disfavor existing unaltered high-GHG emitting technologies. Early action credits will certainly receive attention, but to what extent and in what form? This has yet to be fully resolved, nor has the point at which allowance purchase may finally be set to occur: upstream/downstream, at the point of energy use or the point of carbon release.
Obtaining GHG Credits Through Managing Water Supply Systems
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. [summary]
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.
Global Climate Change Under NEPA
Increasingly, the National Environmental Policy Act (NEPA) is being seen as a vehicle for ensuring that the federal government considers the impact of its actions on global climate change. Relying on a string of judicial decisions that require agency NEPA impact statements specifically to address the climate consequences of agency actions, environmental organizations have petitioned the President’s Council on Environmental Quality to conform its NEPA guidelines to the requirements of these cases. Climate will clearly figure prominently in future federal impact statements, and non-federal stakeholders, who often are the real parties in interest in NEPA compliance, would be wise to address climate early and often when developing their NEPA compliance strategies. [summary]
Increasingly, the National Environmental Policy Act (NEPA) is being seen as a vehicle for ensuring that the federal government considers the impact of its actions on global climate change. Enacted in 1969, NEPA requires federal agencies to prepare environment impact statements for all “major federal actions significantly affecting the quality of the human environment.” Agencies must assess all reasonably foreseeable environmental impacts of a proposed action, including an analysis of direct, indirect, and cumulative effects.
Recently, several NGOs petitioned the White House Council on Environmental Quality (CEQ) to amend its regulations to make clear that NEPA requires that climate change effects be addressed in NEPA compliance documents. The US groups and their allies abroad see the use of NEPA to raise “climate consciousness” and force federal agencies to take climate into account as part of a wider effort to use both the NEPA-like impact assessment law of almost ninety other countries, and the extensive environmental impact assessment requirements of the World Bank Group, to raise climate concerns.
The petition argues that scientific evidence supports the conclusion that climate change results from the build-up of greenhouse gases released into the atmosphere by human activity. Thus climate change is “reasonably foreseeable” within the meaning of NEPA and should be evaluated by agencies when considering the environmental impacts of their actions. The petition relies upon several federal court cases where NGOs have challenged agency failures to consider climate change impacts in a variety of contexts, ranging from the impacts of a proposed project’s greenhouse gas emissions (i.e., federal permit for power plant transmission lines) to climate change impacts on resources also affected by a proposed project (i.e., incidental taking of polar bears and walruses). Courts have not been reluctant to find agency NEPA compliance deficient because climate impacts were not considered.
Yet under NEPA, the courts and the CEQ, should it decide to amend its regulations, can do no more than mandate federal agencies to expand their disclosure of the potential climate impacts of approvals and projects, however indirect and remote they may be. Unlike other environmental statutes, NEPA neither contains particular criteria nor mandates particular results. It is well settled that NEPA is only a “full disclosure law.” In reality, however, energy, transportation, manufacturing, forest, and agricultural projects may be quite vulnerable to delays associated with agency NEPA compliance or an injunction requiring the federal agency to expand its NEPA analysis to cover potential climate impacts. Faced with an adverse court ruling, the decision to proceed with a project may be revisited by one or more agencies, the corporation or its partners, or financial backers.
These realities might be overcome were the real parties in interest – the private companies that rely on federal approvals or funding to go forward – in a position to manage NEPA compliance toward a prompt and successful conclusion. They are not. NEPA climate suits can be brought only against federal agencies, which may not defend the actions with the same zeal as the real parties in interest, or necessarily the same points of view. Industry, therefore, must seek to intervene as defendants, but even if successful will not occupy “first chair” in the litigation. A successful, close working relationship with attorneys in the defendant agency and Department of Justice is not assured. In the end, the fate in court of a federally funded project or federal approval may lie substantially in the hands of government lawyers. Add in the vagaries of the relatively new area of climate change, and companies might well be apprehensive about outcomes before federal agencies and courts.
The problem penetrates even deeper. With growing consciousness of the campaign to bring NEPA cases against federal projects and programs, federal agencies will beef up – and inevitably stretch out – their efforts to comply with NEPA. EAs will become EISes; cumulative impacts analyses will expand in complexity and length. Strategies are available to manage NEPA compliance, e.g., multi-party multi-agency memoranda of understanding on the scope and schedule of NEPA compliance, but few federal incentives exist to chart a definite – much less prompt – course to final NEPA compliance. Again, the real parties in interest will experience project uncertainty, delay, and expense.
Climate Adaptation
As we consider climate legislation, we do not like to be reminded that despite our best efforts, the likelihood is that national and global GHG reductions will not be enough in time to keep regional climate from changing significantly. A new two-year Resources for the Future 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. [summary]
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 7th. 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.
