Greenhouse Gases

New Mexico Court Refuses to Take Steps to Apply Public Trust Doctrine to the Atmosphere

August 22, 2013 09:13
by J. Wylie Donald

By J. Wylie Donald and Patrick Reilly

Two years ago, we observed a potentially startling development in climate change litigation: “On Monday, May 4, [2011] in state courts across the nation lawyers representing children and young adults filed (and apparently will continue to file) suits seeking to compel State governments to recognize the application of the public trust doctrine to greenhouse gas emissions and to take action to abate those emissions.” These lawsuits were coordinated by two groups, Our Children’s Trust and Kids vs. Global Warming, and sought to apply the Public Trust Doctrine to the atmosphere. At the time, we pointed out that there were a host of issues to be resolved before these lawsuits could be successful. And so far, although the Public Trust Doctrine is now recognized in some jurisdictions as applying to the atmosphere, not one suit has been successfully concluded.  Recently, the New Mexico suit, although it survived a motion to dismiss, joined its unsuccessful brethren when the District Court granted a motion for summary judgment against the plaintiffs. 

In the case, Sanders-Reed v. Martinez, seventeen-year-old Aklilah Sanders-Reed sued New Mexico and Susana Martinez in her official capacity as governor for breaching their duty to uphold the public trust with respect to greenhouse gas emissions into the atmosphere. Asserting that “courts have emphasized the flexibility of the [public trust] doctrine to meet changing societal concerns,” Sanders-Reed and her lawyers argued in their complaint that “Governor Martinez has failed to use her authority for the protection of the atmosphere, a valuable public trust resource that belongs to present and future generations of New Mexico citizens.” Plaintiffs effectively hoped that, by applying the Public Trust Doctrine to the atmosphere, the state judiciary could order stricter greenhouse gas regulations.

In her June 26th, 2013 Order on Summary Judgment (attached), the Honorable Sarah M. Singleton noted the gravity of such a decision: “I think that in applying this Doctrine … the Supreme Court would allow the judicial branch to bypass the political process if there was an indication that the political process had gone astray.”  Citing an earlier case in Hawaii, Judge Singleton went on to conclude that, “the State may compromise public rights in the resource only when the decision is made with a level of openness, diligence, and foresight that is commensurate with the high priorities that the rights command under the laws of the state.”

With these conclusions in mind, the Court opined that even if the Public Trust Doctrine does apply to the atmosphere, invoking it to protect the atmosphere would stand at odds with New Mexico’s record of doing so legislatively.

The question is whether or not the State is ignoring its role in protecting the environment or the atmosphere. The State’s not ignoring it, it just disagrees with what the Plaintiff thinks is needed. So the State, in my opinion, has acted on this.

Now, is there the possibility under the Public Trust Doctrine that the State’s action could be so wrongheaded as to invoke the Public Trust Doctrine? I  suppose that in rare circumstances, it could. But I believe that before a court should jump in to apply a doctrine like the Public Trust Doctrine, there should be some showing that the process was tainted or that the public was foreclosed from pursuing the issue. That is not the case here.

Judge Singleton went on to explain that, by virtue of the state Environmental Impact Board’s public decision-making process, plaintiffs had not been denied their chance to participate in its findings on greenhouse gas emissions. She then asserted that regulation of greenhouse gas emissions is, “a political decision, not a Court decision,” before granting summary judgment.  With that decision, Sanders-Reed’s attempt to curtail New Mexico’s greenhouse gas emissions fell short at the trial court. But an appeal was filed on July 24th so it may not be over yet. (We note that Our Children’s Trust plaintiffs have a busy appellate docket.  Following losses at  the trial or intermediate appellate court, appeals are pending in Alaska, Oregon, and Washington also have pending appeals of litigation.  Losses on appeals in Arizona and Minnesota have not been further appealed.  They have appeals of regulatory petitions pending in TexasIowa, and Pennsylvania.)

As stated in Arizona Center for Law in the Public Interest v. Hassell, and repeated earlier this spring in the Arizona OCT appeal, Butler v. Brewer, "as an attribute of federalism, each state must develop its own jurisprudence for the administration of the lands it holds in public trust."  Our Children’s Trust may have extended that rule to the “administration of the [atmospheric resources held] in public trust”, but so far that has had no effect. 

20130704 Order on Summary Judgment (Sanders-Reed v. Martinez).pdf (410.72 kb)

Carbon Dioxide | Climate Change | Climate Change Litigation | Greenhouse Gases

'Deferral Rule' is Derailed - Biogenic Greenhouse Gas Emitters Stand By to Be Regulated

July 19, 2013 09:27
by J. Wylie Donald

The greenhouse gas rule you’ve never heard of, the Deferral Rule, was shot down (barely) by the D.C. Circuit last week.  See Center for Biological Diversity v. Environmental Protection Agency, No. 11-1101 (D.C. Cir., July 12, 2013).   The opinion offers a wonderful primer on greenhouse gas rulemaking and describes the Timing Rule, the Tailpipe Rule and the Tailoring Rule.  It also explains in great detail numerous doctrines concerning agency rulemaking.  And it balances on the edge of a knife.  There is an opinion (Tatel, J.).  There is a concurring opinion (Kavanaugh, J.) that joins the opinion but goes even further, and which additionally states that “I believe, contrary to this Circuit’s precedent, that the PSD statute does not cover carbon dioxide.”  Opinion at 24.  And last, there is a detailed dissent (Henderson, J.) that addresses the arguments of the opinion to good effect.  If one is looking for definitive guidance this opinion will not suffice.

Even without the Court’s decision, the rule would have died a year from now anyway.  The rule we are talking about is found at 76 Fed. Reg. 43,490, Deferral for CO2 Emissions From Bioenergy and Other Biogenic Sources Under the Prevention of Significant Deterioration (PSD) and Title V Programs.  To those less tied to formality, it is the Deferral Rule.  Under the Deferral Rule, EPA delayed for three years regulation as stationary sources under the Clean Air Act emitters of “biogenic”  carbon dioxide while it further assessed the subject.  Biogenic CO2, is biologically derived CO2, as opposed to CO2 derived from fossil fuels.  It includes emissions from burning landfill methane, combustion of municipal biologically derived solid waste, fermentation processes for ethanol manufacturing and the burning of biomass. 

Biogenic CO2 is not discernably different in the atmosphere from that derived from fossil fuels.  Its difference lies in its context.  Biogenic CO2, when considered over time, may have a neutral or even reducing effect on total CO2 emissions because, for example, while the burning of biomass releases CO2, the growing of biomass pulls CO2 out of the atmosphere and sequesters it.  On the whole, facilities burning biomass might actually result in less CO2 emissions.  The purpose of the Deferral Rule was to permit EPA to spend some more time studying biogenic CO2 so as to avoid issuing regulations that accomplished little.

In its rulemaking EPA offered three doctrines as justifications for its rule:  the de minimis, one-step-at-a-time, and administrative necessity doctrines.  The de minimis doctrine allows an administrative agency to grant regulatory exemptions ”when the burdens of regulation yield a gain of trivial or no value.”  Opinion at 13.  The one-step-at-a-time doctrine allows an agency to proceed in a “piecemeal fashion.”  Id.  And the administrative necessity doctrine allows an agency to “avoid implementing a statute by showing that attainment of the statutory objectives is impossible.” Id. at 15-16.  The absurd results rule, which EPA set forth in its brief, rejects the interpretation of a statute that would produce an absurd result.  Id. at 17. 

The Court rejected all four theories.  The de minimis doctrine only applied to permanent exemptions, as the EPA conceded.  Id. at 13. Accordingly, it did not apply.  The dissent disagreed.  It saw the exception as available, particularly when the statute “expressly does not regulate “minor” sources that cause little harm because they release below-threshold levels of pollutants.”  Id. at 35.

Application of the one-step-at-a-time doctrine was found to be arbitrary and capricious because EPA did not set out how it intended to achieve the statutory goal:  “We simply have no idea what EPA believes constitutes ‘full compliance’ with the statute.  In other words, the Deferral Rule is one step towards … what?  Without a clear answer to that question, EPA has no basis for invoking the one-step-at-a-time doctrine.”  Id. at 15.  The dissent was not buying:  “just as EPA proceeded gradually in regulating GHGs under the Tailoring Rule, EPA has delayed its regulation of a specific GHG via the Deferral Rule.  The fact that EPA is required to take action does not preclude it from phasing in the action using the step-at-a-time method.”  Id. at 33.

The Court found fault with the administrative necessity theory because EPA did not explore what the Court referred to as the “middle-ground option,” requiring permitting except where the source took steps to reduce its biogenic CO2 emissions.  Because EPA had an “obligation to adopt the narrowest exemption possible, it should have explained why it rejected an option that would have reduced emissions from sources the Deferral Rule permanently exempts.”  Id. at 16-17. 

Last, there was the absurd results rule, which EPA sought to apply “because ‘emissions of CO2 derived from certain forms of biomass may not only fail to endanger public health and welfare, but in fact may benefit the public by reducing the net emissions of CO2,’ …[and] it would run afoul of congressional intent to regulate them.” Id. at 17-18. The Court found, however, that EPA did not utilize this rule in its rulemaking, notwithstanding passing references.  Simply put, “[t]hese passing references [fell] far short of satisfying EPA’s ‘fundamental’ obligation to ‘set forth the reasons for its actions.’”  Id. at 18.

The concurrence, as noted above, did not believe CO2 was even regulated by the statute.  But that had been previously decided to the contrary and “that’s water over the dam in this Court.”  Id. at 25.  As to the issue before him, that answer was easy:  “EPA simply lacks statutory authority to distinguish biogenic carbon dioxide from other forms of carbon dioxide.”  Id. at 21.  In sum, EPA was required to address emissions of CO2 and there was no part of the statute that allowed “EPA to exempt  … emissions of a covered air pollutant just because the effects of those sources’ emissions on the atmosphere might be offset in some other way.”  Id. at 22. 

The last point raised by the dissent, in our view, sums up the entire case:  what was the point?  The dissent would have dismissed because the case was not ripe.  First, it needed to be fit for review.  The rule was temporary and by July 2014 EPA would either have let the rule expire or issued a new rule, one that the petitioners might like, but certainly one that would have been informed by the additional three years of research.  Id. at 38.  Second, deferring decision would work no real hardship to petitioners.  Only one facility had been identified as being able to avoid permitting as a result of the Deferral Rule.  The dissent pointed out that the facility enjoyed no more than the previous status quo:  “the hardship of which the petitioners complain is hyperbolically overblown.  The Deferral Rule does not deregulate scores of polluters.  Instead, it temporarily maintains the theretofore long-time status quo for a limited number of stationary sources that – until July 1, 2011 – had never been subject to regulation as a major source under PSD.”  Id. at 42.

In our view, substantively, this decision accomplished little.  A rule that was going to expire next year, expires this year.  Parties seeking to rely on a decision by esteemed arbiters of the law find the arbiters completely at odds with one another.  But that may be the true significance of Center for Biological Diversity.  Notwithstanding that “the task of dealing with global warming is urgent and important at the national and international level,” id. at 25, consistency of approach is by no means assured in any arena, including the courts.

Carbon Dioxide | Carbon Emissions | Greenhouse Gases | Regulation

Top 6 at 6: Highlights of the Top Climate Change Stories in the First Half of 2013

July 1, 2013 00:01
by J. Wylie Donald

Another six months have passed and it is time for our semi-annual look at climate change and its intersection with the law.  Here are some highlights of the last six months:

1.  The Administration’s Focus.  After months of silence in the 2012 presidential campaign, President Obama rejuvenated his administration’s commitment to addressing climate change.  We heard in his inaugural address:   “We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations. Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires and crippling drought and more powerful storms.”  He carried this forward in his State of the Union address less than a month later: “I urge this Congress to get together, pursue a bipartisan, market-based solution to climate change, like the one John McCain and Joe Lieberman worked on together a few years ago.  But if Congress won’t act soon to protect future generations, I will.  (Applause.)  I will direct my Cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy.”     And in a speech this past Tuesday the promises took another step toward reality when the President outlined his “climate action plan.” 

Recognizing the logjam in Congress, the Administration's plan is based on authority the executive branch already has. The salient points include:  1) further restrictions on powerplant greenhouse gas emissions (notably addressing coal); 2) promotion of resilience and adaptation with respect to weather-related calamities; 3) additional permitting of renewable energy facilities on public lands; and 4) engagement in the international arena on climate change such as working out a global free trade agreement on clean energy technologies.   The goal is a reduction of U.S. greenhouse gas emissions by 17%.  The Wall Street Journal called these “sweeping climate policies.”  We will see; with no new authority, Gina McCarthy’s nomination to head EPA held up, and the bounty of natural gas unleashed by fracking, greenhouse gas reduction may be achieved by the market, see Leveraging Natural Gas to Reduce Greenhouse Gas Emissions,  not governmental efforts.  

2. 400 PPM.  On May 9, Mauna Loa Observatory of NOAA’s Earth System Research Laboratory reported that the average weekly value of atmospheric carbon dioxide at the observatory had reached 400 ppm, a level unsurpassed in 3 million years.  The world collectively ignored the number, treating it more like an insignificant decimal, 0.0004, which it was (a decimal, not insignificant).  We don’t think anyone will dispute that there are three ways to interpret this number:  it’s bad, it’s good, it’s neither.  Climate scientists are unanimous that it’s bad.  There is nothing saying it’s good.  Which means the justification for not taking action on climate change is that the ever increasing levels, and the ever increasing rate of accumulation, of carbon dioxide in the atmosphere (see the graphs by the observatory), are of no consequence.  US Airways will probably side with the climate scientists - it canceled 18 flights as a result of the record-breaking temperatures in the southwest this past weekend. 

As a footnote, we note that Mauna Loa’s number is an average, and is subject to refinement.  As it turned out, the 400 ppm number was refined a few weeks later to 399.89.  

3.  Free Trade.  In 2009 Ontario enacted its Green Energy Act to promote renewable energy in the province.  One approach is the adoption of a feed-in tariff (mandatory above-market rates for electricity derived from renewable resources).  This had successfully been pioneered in Germany.  Ontario legislators also saw the opportunity to spur job growth by giving subsidies to businesses that sourced their wind turbines and solar panels in Ontario (i.e., “domestic content”).

Japan jumped on this protectionism immediately and sought consultations with Canada under the General Agreement on Tariffs and Trade and the World Trade Organization. The consultations were ineffective and Japan requested a panel to hear the dispute concerning Ontario’s “domestic content requirements," with which renewable energy generators were required to comply "in the design and construction of electricity generation facilities in order to qualify for guaranteed prices” under the feed-in tariff program.

Last December the panel ruled in favor of Japan on the domestic content requirements. Canada appealed and this May the appellate panel affirmed. Ontario's energy minister has confirmed that Ontario will abide by the WTO decision and revise its Green Energy Act.   We conclude that free trade remains colorblind.

4. Climate Change Liability Lawsuits.  For seven years now, the first wave of climate change liability lawsuits have roiled the legal waters.  It bears remembering that in October 2009, the plaintiffs in these cases rode the crest of the wave.  The Second Circuit had reversed the trial court’s dismissal in Connecticut v. American Electric Power (AEP), and the Fifth Circuit likewise overturned the Southern District of Mississippi’s dismissal of Comer v. Murphy Oil USA.  Plaintiffs had standing; the political question doctrine did not apply.

Things have gone badly for the plaintiffs since.  All readers of this blog know of the Supreme Court’s decision in AEP, stifling the plaintiffs’ case under the doctrine of displacement.  This year two more decisions confirmed the Judicial Branch’s hostility to these claims.  Comer made it back to the Fifth Circuit, where dismissal was summarily affirmed on the doctrine of res judicata.  And the last of the original quadriga, Native Village of Kivalina v. ExxonMobil Corp., found its petition for certiorari denied in April,  thus leaving the Ninth Circuit’s affirmance of dismissal unchanged.

The only reed left for the plaintiffs is the granting of a petition for certiorari in Comer, a prospect we deem unlikely, if only because the appeal would be based on a purely procedural question of little likelihood of being repeated and of little relevance to the larger climate change issues.

5.  Ursus Maritimus.  On March 1 the D.C. Circuit in In re Polar Bear Endangered Species Act Litigation  affirmed the district court’s dismissal of challenges to the Fish and Wildlife Service’s designation of the polar bear as threatened under the Endangered Species Act because “due to the effects of global climate change, the polar bear is likely to become an endangered species and face the threat of extinction within the foreseeable future.” The polar bear’s friends (environmental groups) sought to have the bear listed as “endangered.”  Ursus maritimus’s less-than-friends (the State of Alaska and hunting groups), urged that no listing was appropriate.  The standard in such reviews is relatively simple:  “Our principal responsibility here is to determine, in light of the record considered by the agency, whether the Listing Rule is a product of reasoned decisionmaking.”  The Court found that it was, holding specifically the the Listing Rule rests on a three-part thesis: the polar bear is dependent upon sea ice for its survival; sea ice is declining; and climatic changes have and will continue to dramatically reduce the extent and quality of Arctic sea ice to a degree sufficiently grave to jeopardize polar bear populations. See Listing Rule, 73 Fed. Reg. at 28,212. No part of this thesis is disputed and we find that FWS’s conclusion – that the polar bear is threatened within the meaning of the ESA – is reasonable and adequately supported by the record.”

As arctic resource development progresses as the ice retreats, the polar bear's Endangered Species Act listing is sure to take on larger significance, both as a model for the preservation of other arctic species, and as a tool to block development.

6.  Compressed Natural Gas (CNG). On June 13 the Fifth Circuit affirmed the district court's decision in Association of Taxicab Operators USA v. City of Dallas. In the case the local taxicab organization challenged a city ordinance that allowed CNG-fueled taxicabs “head-of-the-line” privileges at Love Field in downtown Dallas. Plaintiff's theory was that section 209(a) of the Clean Air Act, which prohibits states and their political subdivisions from adopting emission standards for motor vehicles, preempted the ordinance either directly or by implication. The Fifth Circuit did not agree. Traditional police powers of the state were preserved to the state by section 209(d) of the Clean Air Act. More importantly, an ordinance granting head-of-the-line privileges, on its face did not set an emission standard, as required by the statute.  As to any implied preemption, the ordinance may have influenced taxicab operators to alter their behavior, but it did not compel them to do so. Less than 7% of Dallas's taxicabs served Love Field and the only place CNG cabs had head-of-the-line privileges was at Love Field; there were plenty of other places for gasoline powered cabs to pick up fares. Accordingly implied preemption did not apply either. 

One of our themes in a world beset by climate change is that there will be winners and there will be losers. Little did taxicab operators know they would be both.

Climate Change Legal Theories: The Atmospheric Public Trust Doctrine Moves Another Step Forward

April 29, 2013 08:49
by J. Wylie Donald

One of the shibboleths of those following climate change litigation is the idea that new legal theories will be surfaced, fired in the furnace of litigation and then forged as the vehicle for addressing climate change in the courts.  The public trust doctrine is being hammered out in that direction.

Last month in Butler v. Brewer an appellate panel in Arizona considered a claim based on the theory that the atmosphere is subject to the public trust doctrine and that, therefore, the State of Arizona was obligated to take steps to address greehnouse gases and combat climate change.  Although the court affirmed the trial court’s dismissal of the suit, before reaching that conclusion it specifically rejected Arizona’s argument that greenhouse gas issues are non-justiciable under the doctrine.

Butler is one of a slew of cases and regulatory petitions against the federal and state governments orchestrated by Our Children’s Trust, a public interest organization based in Oregon.  We have commented on OCT previously.  Its success has not been overwhelming, or even any.  Not one court has concluded that a state or the federal government can be compelled to do anything. Yet, if the measure of success is whether one’s theory is more well-formed than previously, and whether one can cite more legal precedent supporting it, then OCT is moving its ball forward.  By our count, OCT has positive rulings on its atmospheric trust theory from Texas, New Mexico and now Arizona.

In Butler, the appellant raised only one issue:  "[w]hether the [public trust doctrine] in Arizona includes the atmosphere.”  The State of Arizona engaged that argument head on:  “the Doctrine does not include the atmosphere.”  Arizona also raised defenses of displacement, standing, and political question, among others. 

The court considered prior Arizona and federal precedent to set forth the scope of the doctrine:

First, that the substance of the Doctrine, including what resources are protected by it, is from the inherent nature of Arizona's status as a sovereign state. Second, that based on separation of powers, the legislature can enact laws which might affect the resources protected by the Doctrine, but is it up the to judiciary to determine whether those laws violate the Doctrine and if there is any remedy. Third, that the constitutional dimension of the Doctrine is based on separation of powers and specific constitutional provisions which would preclude the State from violating the Doctrine, such as the gift clause.

From those principles the court had no difficulty responding to Arizona’s argument that the doctrine did not apply to the atmosphere:  “we reject the Defendants' argument that the determinations of what resources are included in the Doctrine and whether the State has violated the Doctrine are non-justiciable.”  Further, “While public trust jurisprudence in Arizona has developed in the context of the state's interest in land under its waters, we reject Defendants' argument that such jurisprudence limits the Doctrine to water-related issues.” (Note, however, Presiding Judge Gemmill concurred separately and stated:  "the atmosphere is not subject to the public trust doctrine.")

Thus, “For purposes of our analysis, we assume without deciding that the atmosphere is a part of the public trust subject to the Doctrine.”  Unfortunately for the appellant, this was as far as the court was willing to go.  Appellant did not point to any violation of the Arizona Constitution or statutory law.  Such a violation was mandatory for the claim to succeed.

 Additionally, in 2010 Arizona’s legislature took strong steps to ensure that the regulation of greenhouse gases remained in its bailiwick, rather than any administrative agency’s.  A.R.S. 49-191 provides:

A. Notwithstanding any other law, a state agency established under this title or title 41 shall not adopt or enforce a state or regional program to regulate the emission of greenhouse gas for the purposes of addressing changes in atmospheric temperature without express legislative authorization.

Absent a ruling that A.R.S. 49-191 was unconstitutional, there was no order the court could issue that would be able to implement the relief appellant sought.  Accordingly, appellant had no standing.

Rome wasn’t built in a day.  The atmospheric public trust doctrine hasn’t been either.  But construction continues. 

Carbon Dioxide | Climate Change Litigation | Greenhouse Gases | Legislation

Native Village of Kivalina Files Its Petition for Certiorari - A Five-Year Climate Change Litigation Marathon That Has Yet to Start

March 15, 2013 08:54
by J. Wylie Donald

One day short of five years since the case was originally filed, on February 25, 2013 the plaintiffs in Native Village of Kivalina v. ExxonMobil Corp. attempt once more to get out of the starting blocks, this time with a petition for certiorari  to the United States Supreme Court.  This follows dismissal by the Northern District of California in 2009, affirmance of the dismissal by the Ninth Circuit last September, and denial of a petition for rehearing en banc in November.   To be trite, it’s a marathon, not a sprint.  The response, if any, is due on April 3.  We can expect a decision on the petition a few weeks after that. 

The substance of the petition was easily predicted.  The tension between Middlesex County Sewerage Authority v. National Sea Clammers Ass’n, 453 U.S. 1 (1981), and Exxon Shipping Co. v. Baker, 554 U.S. 471 (2008), and mentioned by the concurrence (Judge Pro, sitting by designation on the Ninth Circuit) is the center of the argument.  Indeed it is the only issue behind the question presented:  “Whether the Clean Air Act, which provides no damages remedy to persons harmed by greenhouse gas emissions, displaces federal common-law claims for damages.”

According to the petitioners, the starting point for the analysis is the Court’s 1981 decision in Milwaukee v. Illinois, 451 U.S. 304 (1981) (“Milwaukee II”), where Illinois sought to enjoin Milwaukee’s federally permitted Clean Water Act discharges using the federal common law of nuisance.  Petition at 7.   In rejecting Illinois’s claim, the Court “focused carefully on whether the statutory scheme ‘spoke directly’ to the plaintiff’s ‘problem,’ and whether the statute gave the plaintiff a means ‘to protect its interests.’”  Id. at 8. 

The same year, however, the Court also, according to petitioners, issued Middlesex, a decision sharply diverging from Milwaukee II. In Middlesex, fishermen aggrieved by ocean dumping were found to have no federal common law remedy because “’the federal common law of nuisance in the area of water pollution is entirely pre-empted by the more comprehensive scope’ of the [Clean Water Act].” Id. at 10.

These two threads came together 27 years later in Exxon Shipping, where the Court “departed from any broad reading of Middlesex and returned to the more pragmatic and careful analysis of Milwaukee II.”  Id. Or maybe not.  Kivalina in candor also acknowledged:

To be sure, it is possible to read Middlesex narrowly so as to reconcile the decision with Exxon Shipping.  Given Exxon Shipping’s statement that Middlesex is limited to situations where “plaintiffs’ common law nuisance claims amounted to arguments for effluent-discharge standards different from those provided by the CWA,” then it appears that a federal common law damages claim is displaced only where it is so inextricably intertwined with claims for injunctive relief that it amounts to second-guessing of the prospective statutory standards.  Id. at 11-12.

Petitioners tied up their arguments with reference to American Electric Power v. Connecticut, 131 S. Ct. 2527 (2011) (“AEP”), the case that established that greenhouse gas claims were displaced by the Clean Air Act.  AEP, it was asserted, “pointedly did not follow Middlesex in concluding that the whole 'federal common law of nuisance is entirely' displaced by a 'comprehensive' regulatory scheme, which would have made for a much shorter, and very different, AEP opinion.” Petition at 12.  Instead, the gravamen of AEP was that the displaced claims were those that would have interfered with EPA’s authority.  Id. at 13.

In sum, “Milwaukee II, Middlesex, Exxon Shipping and AEP cannot all be correctly decided, yet all of them are viewed as good law – a conundrum that Judge Pro acknowledged in his opinion concurring in the result and that ultimately led him, and the other members of the panel, to a result in this case that is at odds with the fundamental rationale for displacement and with basic fairness.”  Id. Stated differently, Exxon Shipping permitted common-law damages even though the Clean Water Act displaced claims for injunctive relief.  This was to be contrasted with Middlesex, which “held that  a federal common-law damages claim was displaced by the Clean Water Act.”   Id. at i.  We expect that the Kivalina defendants will have a different point of view.

The second part of the petition is the analysis of why the case is so important that the Court should hear it.  Kivalina gave four reasons:

1.  Climate change is an extremely important subject.  In a pointed salvo, petitioners cited to the petition for certiorari in AEP, where some of the same defendants stated “’The questions presented by this case are recurring and of exceptional importance to the Nation.’”
2. Displacement presents a fundamental question of boundaries between the legislative and judicial branches.
3. GHG emissions claims are “inherently important because of the extraordinary nature of global warming.” 
4. Kivalina’s very existence is at stake.

Notwithstanding all that, the odds of the petition being granted are long.  The Court only accepts between 100-150 of the more than 7,000 cases it is asked to review each year.  That is less than a 2% chance, all things being equal.   Greenhouse gas emissions were on the Court’s docket in 2007 (Massachusetts v. EPA) and again in 2011 (AEP v. Connecticut).  While we agree that climate change cases are important; we are skeptical that this narrow issue (displacement of damages, when the Court has already ruled on displacement of injunctive relief) justifies a place at the finish line, marathon or no.

Climate Change Litigation | Greenhouse Gases | Sustainability

Even if You Can't Insure the End of Days, You Can Insure Some of the Effects of Climate Change

December 22, 2012 00:04
by J. Wylie Donald

Today is the day the world ended.  But it didn’t.  The spin put by some on the Mayan calendar didn’t pan out and the world continued.  Here in Baltimore we didn’t buy into the predictions, but just in case, we went looking for some end-of-the world insurance policies.  We didn’t come up with anything.  But while we were looking we turned up quite a bit of coverage for the-end-of-the-world-as-we-know-it.  Some call it climate change insurance; most just recognize it as an old friend taking on a few new attributes to meet the needs of the present. 

We found quite a bit of that old friend.  There is the simple stuff.  Farmers grow crops.  If it doesn’t rain, there are no crops.  If it rains too much, there are no crops.  If hail is overwhelming, there are no crops.  If frost comes early, or stays late, there are no crops.  Sounds like extreme and variable weather and also the makings of an insurance policy.  Total Weather Insurance agrees.  The beauty of TWI's product is that the farmer need not prove any loss.  As The Economist reports, he or she just bets on the details of the weather on a 2.5  x 2.5 mile grid across the United States, and with data-processing getting more and more sophisticated, the variations of farming are smoothed substantially.  

At the other extreme are catastrophe bonds.  These investment vehicles offer something very few investments can offer – zero correlation with the stock market.  In a nutshell (and according to Investopedia) a catastrophe bond is a “high-yield debt instrument that is usually insurance linked and meant to raise money in case of a catastrophe such as a hurricane or earthquake. It has a special condition that states that if the issuer (insurance or reinsurance company) suffers a loss from a particular pre-defined catastrophe, then the issuer's obligation to pay interest and/or repay the principal is either deferred or completely forgiven.”  We noted earlier this year that Florida’s Citizen’s Property Insurance Corporation issued the largest catastrophe bond ever at $750 million. That trend has continued with this year’s issuance exceeding last year’s by over $2.5 billion.   

Some might say that the above would exist even if climate change were not occurring.  Possibly.  But what about insurance for renewable energy and for green buildings?

William Gallagher Associates offers its Green Energy Insure product, recognizing that new technologies carry more risk than proven ones.  Green energy purveyors need to address the risks accompanying their technology and seek coverage for the failure of the technology itself, the cost of opening and closing the equipment to get to the problem, and any ensuing damage that may occur. 

Green building insurance was pioneered by Fireman’s Fund, but it is no longer alone in the field.  Other companies such as AIG, Zurich, Travelers, and Chubb now offer products addressed to the issues green buildings face like vegetated roofs, building commissioning, recycling of debris rather than disposal, water and lighting efficiency, and certain certified professionals.

One climate change product that has not made an appearance is greenhouse gas insurance.  So far as we know, no one is offering carbon dioxide coverage, at least by that name.  We have written many times before that such coverage is to be found in general liability policies and D&O policies under the general insuring agreement, because the absolute pollution exclusion doesn’t apply.  The issue has been litigated twice and the policyholder has won on both occasions. See Donaldson v. Urban Land Interests, Inc., 564 N.W.2d 728, 732 (Wis. 1997); Steadfast Ins. Co. v. The AES Corp. 

The Mayan prophecy advocated by some did not come to pass today.  To assuage the disappointment, we will offer another.  Insurance products are wonderful; they are even more wonderful when they pay off.  People being what they are, there will be disputes over these new instruments.  The petitioning policyholder will be more likely to prevail where it has prudently purchased.  

Climate Change | Green Buildings | Greenhouse Gases | Weather

The Top 6 at 6: A Review of the Most Important Climate Change Legal Stories in the First Half of 2012

July 1, 2012 00:01
by J. Wylie Donald

Arbitrary and capricious.  Familiar words to anyone involved in regulatory activity.  But also applicable to calendars, which willy-nilly cut off a series of events and ascribe them to one solar cycle, as if the sun gave two hoots.  As we perused the various "Climate Change: Year in Review" reviews that crossed our desk last January, we concluded 365 days are arbitrary and one year capricious in assessing what is important to resurrect and re-discuss.  We further concluded that a 12-month look-back is too long.  So, for what it is worth, here is one of six months.

1.  Cap-and-Trade in the U.S. - On January 1 the Western Climate Initiative (WCI) (or what remains of it) initiated its long-anticipated cap-and-trade program for greenhouse gas emissions.  Notwithstanding the lack of support from other WCI members, California and Quebec are moving forward with a cap-and-trade program.  California's and Quebec's mandated reporting rules applied to stationary sources emitting at or above 25,000 metric tons of CO2e per year.  On May 9 coordination between the two programs was announced  initiating the 45-day public comment period.  The first auction will be held in November and then, on January 1, 2013, enforcement begins when covered entities must participate. It is obviously too soon to tell how successful the California program will be, but when the world's eighth largest economy takes an initiative, it is likely to have impact elsewhere, particularly when it is the only program in the nation.

2.  Greenhouse Gas Liabilities and Insurance Coverage - We didn't think there would be anything to say this year about coverage for GHG liabilities.  After all, in the only case in litigation the Virginia Supreme Court issued its opinion in AES Corp. v. Steadfast Insurance Co. in September 2011 and concluded that there was no "occurrence" triggering coverage made in the allegations pleaded by the Native Village of Kivalina against AES Corporation.  But then the Court granted a motion for reconsideration in January and many puzzled as to what was going on.  Apparently nothing as the Court reiterated its previous conclusions in an April 20, 2012 opinion.  The decision will be significant in Virginia because it may have upset coverage in more conventional cases, as the concurring opinion of Justice Mims suggests.  As for the rest of the nation, it is one decision, on one issue, on one set of facts.  The case is important because it is the first, but we will be surprised if it provides guidance anywhere else.
 
As for greenhouse gas liability that is a story unto itself.  Like something out of a Steven King novel, the Comer v. Murphy Oil case refuses to pass quietly into the night.  This is the case that was dismissed by the Southern District of Mississippi, reversed by the 5th Circuit, vacated by the 5th Circuit en banc when it accepted rehearing and then reinstated as dismissed when the 5th Circuit's quorum dissolved.  Following a denial of a request for a writ of mandamus from the U.S. Supreme Court, the Comer plaintiffs re-filed their complaint against over 100 electric utilities, oil companies, chemical companies and coal companies alleging their GHG emissions were responsible for the ferocity of Hurricane Katrina.  And the Southern District of Mississippi dismissed the plaintiffs again on March 20.  And plaintiffs appealed again.  We don't expect the case to be finally at rest until the Supreme Court denies certiorari, or accepts it (perhaps in order to address the Ninth Circuit's much-anticipated decision in Native Village of Kivalina v. ExxonMobil, which has been pending for over six months since oral argument).

3.  Natural Gas:  The Bridge Fuel - With the combining of two technologies, hydraulic fracturing and horizontal drilling, a resource of unprecedented volume is "changing the game" of energy.  "Annual shale gas production in the US increased almost fivefold, from 1.0 to 4.8 trillion cubic feet between 2006 and 2010. The percentage of contribution to the total natural gas supply grew to 23% in 2010; it is expected to increase to 46% by 2035."  Thus reported the Energy Institute at the University of Texas in February in a 400+ page tome entitled Fact-Based Regulation for Environmental Protection in Shale Gas Development.  Momentously, the UT researchers report "there is at present little or no evidence of groundwater contamination from hydraulic fracturing of shales at normal depths."  The reference to "normal depths" acknowledged that in December 2011 the EPA linked contamination in Pavilion, Wyoming to shallow fracking operations. In March 2012, however, EPA agreed to conduct further testing.  And then in May, a personal injury tort case, Strudley v. Antero Resources Corp. et al., No. 2011-CV-2218 (2d Jud. Dist. Ct. Col. May 9, 2012), brought against fracking operators in Colorado was thrown out because plaintiffs could not muster adequate proofs of specific causation. Despite some intense opposition, fracking is moving forward.  What does all of this have to do with climate change?  Natural gas when burned emits half the carbon dioxide of coal.  Accordingly, some argue that natural gas is the bridge to a low-carbon future.  If so, then fracking builds that bridge.

4.  Innovative Climate Change Legal Theories - Last spring the sound and the fury were intense as the environmental organization Our Children's Trust unleashed several dozen regulatory petitions and a dozen lawsuits across the nation.  The goal:  establish the public trust doctrine as applicable to the atmosphere and use it to implement greenhouse gas regulation.  It appears that all of that is signifying nothing. Over two dozen petitions were denied in 2011 and two lawsuits were dismissed (Montana and Colorado).  It did not get any better in 2012.  The first six months of this year delivered only bad news to OCT.  State courts dismissed lawsuits in Alaska, Arizona, Minnesota, Oregon, and Washington.  The federal court in the District of Columbia did the same.   Plaintiffs took a voluntary dismissal in California.  To be sure, OCT has filed appeals (the one in Minnesota is scheduled to be argued on July 18).  Having failed to convince a single court so far, we think we are safe in predicting an uphill battle.

5.  Power Plant Performance Standards - On April 13, 2012, a scant seven months before the presidential election, the EPA published in the Federal Register standards of performance for all new fossil fuel-fired electricity-generating units requiring them to meet an electricity-output-based emission rate of 1,000 lb of carbon dioxide for every megawatt-hour of electricity generated.  The only plants that can meet this standard without implementing costly carbon capture and storage technology are natural gas plants.  Thus, the administration took a strong stand against coal-based generation.  Or it is all smoke and mirrors.  As EPA notes in the proposed rule, because of the glut of natural gas made available by fracking, there is little likelihood of a new coal-powered plant before 2030.  Notwithstanding, industry groups have filed a half-dozen lawsuits seeking to derail the rule.

6.  EPA's Greenhouse Gas Regulatory Program - Less than a week ago USEPA and its GHG program got a firm "thumbs up" from the D.C. Circuit.  Inundated with over two dozen appeals of various USEPA GHG regulations, the Endangerment Finding, the Tailpipe Rule, the Tailoring Rule and the Timing Rule (for citations see The DC Circuit Locks in USEPAs GHG Regulations Sort Of). The court turned away every challenge, sometimes on the merits and sometimes on procedural grounds such as standing.  There is much that deserves comment not the least of which are the differences between the states with California, Connecticut, Delaware, Illinois, Iowa, Maine, Maryland, Massachusetts, New Hampshire, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, and Washington, lining up on one side, and Alabama, Florida, Indiana, Kansas, Kentucky, Louisiana, Nebraska, North Dakota, Oklahoma, South Carolina, South Dakota, Texas, Utah, and Virginia lining up on the other.  To focus more on legal matters, several challenges were turned away on standing.  For example, neither states nor industry groups could challenge the Tailoring Rule as they did not allege the requisite injury.  Because the Tailoring Rule benefits small businesses (who are not required to comply with certain GHG emission requirements), it would appear that the door may remain open for parties who allege competitive injury (i.e., non-regulated entities gain a competitive advantage). In the meantime, do not expect Congress this election year to touch the issue.  

 

The DC Circuit Locks in USEPA's GHG Regulations - Sort Of

June 26, 2012 23:13
by J. Wylie Donald

It took a little over five years but USEPA's greenhouse gas regulation program is now firmly established - for the moment anyway.  The D.C. Circuit today rejected every challenge by numerous petitioners and intervenors to the whole raft of USEPA rules that followed from the critical Supreme Court decision, Massachusetts v. EPA, in 2007.  In Coalition for Responsible Regulation, Inc. v. Environmental Protection Agency (attached), the D.C. Circuit considered arguments against the validity of

The Endangerment Rule, Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(s) of the Clean Air Act, 74 Fed. Reg. 66,496 (Dec. 15, 2009),

The Tailpipe Rule, Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards, 75 Fed. Reg. 25,324 (May 7, 2010)

The Tailoring Rule, Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule, 75 Fed. Reg. 31, 514 (June 3, 2010), and

The Timing Rule, Reconsideration of Interpretation of Regulations That Determine Pollutants Covered by Clean Air Act Permitting Programs, 75 Fed. Reg. 17,004 (Apr. 2, 2010), 

as well as a general challenge to the USEPA's implementation of the Clean Air Act.  Each argument was rejected.  The Endangerment and Tailpipe Rules are not arbitrary and capricious, no petitioner (whether from industry or a state) had standing to attack the Timing and Tailoring Rules, and the USEPA's interpretation of the relevant Clean Air Act provisions "is unambiguously correct."

The blogosphere is overwhelmed with commentary and analysis.  Rather than repeat what others have already said, we want to focus on just one small segment (pages 45-50) of the 82 page opinion:  standing for the National Association of Home Builders (NAHB) and the National Oilseed Processors Association (NOPA).  The court singled out the NAHB and the NOPA because they were the only industry petitioners that had standing to challenge the "result of the Tailpipe Rule, which had the effect of expanding the [Prevention of Significant Deterioration] PSD program to never-regulated sources." 

A little background is in order.  Massachusetts v. EPA established that greenhouse gases could be regulated as air pollutants (within the meaning of the Clean Air Act) by USEPA.  The Endangerment Finding concluded that six "well-mixed" greenhouse gases emitted from motor vehicles contributed to the "climate change problem" and thus were "reasonably anticipated to endanger public health and welfare."  As a result, USEPA issued the Tailpipe Rule, which set GHG emission standards for cars and light trucks.

Two sections of the Clean Air Act, the PSD program and the state permitting requirements under Title V, are triggered by the emission of "any air pollutant" (which USEPA has interpreted to mean: any regulated air pollutant).  Accordingly, once GHGs were regulated anywhere under the Clean Air Act (such as from tailpipes of motor vehicles), GHGs constituted an "air pollutant" within the meaning of the Act and stationary sources that emitted GHGs became subject to PSD and Title V permitting requirements.  The proverbial camel's nose was in the tent, and the camel followed post-haste. This approach to regulation was long-standing and had been relevant to rules promulgated in 1978, 1980 and 2002.  Since the Act provided for a basis for review only within 60 days of the promulgation of national regulations, challenges to USEPA's approach were very much time-barred, but with one very significant exception: "if such petition is based solely on grounds arising after such sixtieth day, ..." 42 U.S.C. 7607(b)(1).

What this means is that an entity whose claim has recently ripened has standing to challenge the USEPA's approach.  Stated differently, entities that did not have standing in 1978, 1980 or 2002 because "their alleged injuries were only speculative" (such as NAHB and NOPA), may subsequently find they do have standing because their facilities are now regulated.  NOPA asserted that "[prior] to promulgation of the Tailpipe Rule, no member's facility had triggered PSD review by virtue of emissions of a non-criteria pollutant.  Now that greenhouse gases are a regulated non-criteria pollutant, many NOPA members will have to obtain PSD permits as [a] result of their facilities' emissions ..."  NAHB members who likewise were not subject to PSD requirements, were now certain to have to obtain PSD permits sometime in the future.  Accordingly, unlike other industry petitioners, NOPA and NAHB were found to have standing to challenge USEPA's "interpretation of the PSD permitting triggers ..." 

This result is important.  Absent regulations like the Tailoring Rule, GHG regulation will be far-reaching and will bring in entities not previously subject to regulation.  Those entities will be entitled to challenge the regulation, as well as the methods USEPA uses to implement the regulations, even if those methods have been around for decades.  Thus, even though USEPA's GHG program sailed through this set of challenges, the door certainly is not closed to other challenges as GHG regulation expands. 

 

20120626 Coalition for Responsible Regulation, Inc. v EPA (D.C. Cir.).pdf (188.21 kb)

Carbon Dioxide | Climate Change Litigation | Greenhouse Gases | Legislation

Proposed Rule for Power Plant Greenhouse Gas Emissions: Much Ado About Nothing?

March 30, 2012 00:20
by J. Wylie Donald

Wow!  Whether one likes the president or not, one must concede he's not afraid of leading. Just a little over seven months from the election he has drawn a line in the sand and proposed a rule that may fundamentally alter America's energy mix and takes a big step toward addressing carbon dioxide emissions.  Or it does nothing at all.  We are talking of course of Tuesday's announcement of new source performance standards for electricity plants.   In EPA's words:

The EPA is proposing standards of performance that require that all new fossil fuel-fired EGUs meet an electricity-output-based emission rate of 1,000 lb
CO2/MWh of electricity generated on a gross basis. This proposed standard is based on the demonstrated performance of natural gas combined cycle (NGCC) units, which are currently in wide use throughout the country, and are likely to be the predominant fossil fuel-fired technology for new generation in the future.  EPA, Standards of Performance for Greenhouse Gas Emissions for New Stationary Sources: Electric Utility Generating Units (proposed rule) at 13 (Mar. 27, 2012) .

So natural gas is in.  And what about the other fossil fuels?  New plants using coal or oil and even IGCC (integrated gas combined cycle) can be built but EPA expects that they will need to use carbon capture and storage (CCS) to meet the standards.  Id.

What brought about this groundbreaking new rule?  We set forth the legal foundation in a companion post.  Suffice to say here that EPA has moved a long way from the days before Massachusetts v. EPA, 549 U.S. 497 (2007), when greenhouse gases were not Clean Air Act "pollutants."  But the non-regulatory drivers were perhaps even more significant.  All are aware of "fracking".  The use of horizontal drilling with hydraulic fracturing in shales a mile beneath the surface has unleashed a torrent of natural gas.  As Forbes reports this month natural gas prices are half of what they were just a few years ago.  And the glut is not seen to be abating.  EPA has seized on this surfeit:  "technological developments and discoveries of abundant natural gas reserves have caused natural gas prices to decline precipitously in recent years and have secured those relatively low prices for the near-future."  Proposed Rule at 15.  As a result, "energy industry modeling forecasts uniformly predict that few, if any, new coal-fired power plants will be built in the foreseeable future."  Id. 

In other words, the proposed regulation will have hardly any effect (even none) on coal-fired generation because no one was going to build those plants anyway.  "Our IPM modeling, using Energy Information Administration (EIA) reference case assumptions, projects that there will be no construction of new coal-fired generation without CCS by 2030. Under these assumptions, the proposed rule will not impose costs by 2030."  Id. at 17.

We have read the commentary that this is the death of coal.  The cost of capturing and storing carbon dioxide, which will be the only way for a new coal plant to meet the new standard, is prohibitive. Accordingly, no coal plants will be built. According to EPA, however, coal-fired production was dead anyway because of the glut of natural gas. 

Crystal balls are notoriously unreliable.  Some may remember that nuclear power was to make electricity too cheap to meter. But that didn't happen.  America built the largest man-made construction the world has ever seen (the interstate highway system) on the assumption that gasoline would always be abundant.  That was in error.  An oil embargo introduced Americans to long lines at the fuel pump and locking gas caps. Most forget that natural gas production peaked in the early 1970s, not to be exceeded again until over twenty years had passed.  The point is:  smart people took their best science and made plans.  But reality somehow did not get the message. 

For what it is worth, here is our crystal ball on the demise of coal.  First, CCS technology is pertinent not only to coal. Combustion of natural gas emits carbon dioxide as well. The regulatory imperative will push natural gas plants to address their CO2, and coal will be able to take advantage of improvements in CCS technology. Second, the United States has been called the Saudi Arabia of coal. To expect that industry to dry up and blow away is naïve. Shale gas went from a vanishingly small fraction of the US energy mix to over 20% in five years or less. Innovation made this possible.  Just as ten years ago we could not imagine today's natural gas industry, we may not be able to recognize our coal resource in another ten years. Third, we thought it was fundamental that energy security depends on a mix of energy sources. It would be foolhardy to rely completely on natural gas.  It will only take one cold winter and a natural gas pipeline calamity to make coal seem like a sensible alternative. 

Whether the proposed rule will actually have an impact depends on numerous factors.  All can agree, however, that climate change has been thrust back on the national agenda. 

Carbon Dioxide | Carbon Emissions | Greenhouse Gases | Regulation

Soldiering On: The Western Climate Initiative and RGGI in 2012 and Beyond

January 8, 2012 23:47
by J. Wylie Donald


Last week a big step forward was taken by the Western Climate Initiative (WCI). Or what remains of it. On January 1, 2012 members were to establish binding caps on emissions of carbon dioxide from electricity generators and certain industrial sources, issue allowances for those emissions and then permit the trading of those allowances.  At least that was the plan back in September 2008 when  Design Recommendations for the WCI Regional Cap-and-Trade Program was released and when climate change response was popular and states had money in their budgets.  Since then Arizona, Montana New Mexico, Oregon, Washington and Utah have withdrawn from the WCI leaving only California and four Canadian provinces.  As the WCI puts it:  "British Columbia, California, Ontario, Quebec and Manitoba are continuing to work together through the Western Climate Initiative to develop and harmonize their emissions trading program policies."  And of those remaining only two (California and Quebec) are moving forward with a cap-and-trade program.

So is this the end of regional greenhouse gas initiatives?  After all, on the East Coast New Jersey has bolted from the Regional Greenhouse Gas Initiative, while New Hampshire attempted to bolt and New York faces a lawsuit (attached) aimed at ejecting New York.

We think not.  Our reasoning is three fold. 

First, climate change is not going away.  We are going to have to do something.  The theory behind regional initiatives -- that they act as a laboratory for experimenting with greenhouse gas regulation -- remains valid.  And until federal legislation takes over (certainly not in 2012), regional initiatives are going to be the only game in town. 

Second, organizations exist around the globe to develop manufacturing or construction or laboratory or telecommunications or you-name-it standards.   Companies ignore these organizations at their peril and often join so they can influence the result and at a minimum have inside knowledge of what the standard is and how it came to be.  Regional initiatives operate in a similar manner where the development of the rules and the issues behind them are  critical in effectively implementing the rules.  States and provinces that are out in front on climate change issues are going to have two advantages going forward.  They will have a program in place when federal rules ultimately come along; that primacy will undoubtedly influence the federal program.  And they will have experience implementing the program which likely will translate into a more effective program when compared with newly minted greenhouse gas regulators.

And third they are reported to add economic benefit.  In November RGGI released a report by The Analysis Group that analyzed  the effect of RGGI:   "The Economic Impacts of the Regional Greenhouse Gas Initiative on Ten Northeast and Mid-Atlantic States."   

To quote the report's authors:

Key findings include:

■The regional economy gains more than $1.6 billion in economic value added (reflecting the difference between total revenues in the overall economy, less the cost to produce goods and services)
■Customers save nearly $1.1 billion on electricity bills, and an additional $174 million on natural gas and heating oil bills, for a total of $1.3 billion in savings over the next decade through installation of energy efficiency measures using funding from RGGI auction proceeds to date
■16,000 jobs are created region wide
■Reduced demand for fossil fuels keeps more than $765 million in the local economy
■Power plant owners experience $1.6 billion in lower revenue over time, although they overall had higher revenues than costs as a result of RGGI during the 2009-2011 period

This is not a surprise.  By limiting the emission of carbon dioxide, RGGI drove up, at least initially, the cost of electricity production.  This had the effect of promoting more efficient use of electricity. 

So practitioners would do well to pay attention to California's efforts.  It is likely to be the source of what ultimately happens in Washington.

Thrun v. Cuomo (RGGI Complaint).pdf (1.34 mb)

Carbon Dioxide | Carbon Emissions | Greenhouse Gases | Regulation


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