Posted on September 29, 2016
When RGGI was first implemented, I heard Ian Bowles, then Secretary of Energy and Environmental Affairs in Massachusetts, say more than once that the purpose of RGGI wasn’t really to reduce greenhouse gas emissions or jump start the clean energy economy. Instead, the goal was much more modest; it was simply to demonstrate that a trading regime could work. The RGGI states were to serve as a model, to be the laboratory of a GHG allowance system. The hope was certainly that RGGI would succeed its way into obsolescence. Surely, by 2016, there would be a federal statutory basis for GHG regulation.
It’s now September 2016 and a federal statutory basis for a GHG trading system remains a seemingly distant hope (this post is definitely not about the Clean Power Plan). We may still be waiting, but we do at least have substantial data from the laboratory that is RGGI. In fact, yesterday, RGGI released its analysis of The Investment of RGGI Proceeds through 2014. Some highlights:
- Power sector GHG emissions have decreased by more than 45% since 2005, while regional GDP has increased by about 8%.
- The total value of RGGI investments reached $1.37 billion through 2014.
- Energy efficiency has taken up 58% of RGGI investment. The report states that the expected return is $3.62 billion in lifetime energy bill savings.
- Clean and renewable energy make up 13% of investments, with an expected return of $836 million in lifetime energy bill savings.
One can quibble with these numbers. They don’t really provide a reliable comparison to what would have happened in the absence of RGGI. Nonetheless, it’s pretty clear that RGGI does work. We can reduce GHG emissions without giving up on economic growth, and we can use the regulatory process to move our energy economy where it needs to be.
Now, if someone could just figure out a way to make RGGI obsolete, that would be true success.
Posted on September 8, 2016
Ever since EPA began considering how BACT analysis would be applied to greenhouse gas emissions, there has been concern that EPA would use its BACT authority to “redefine the source” – with the particular concern that BACT for a coal plant would now be to burn natural gas instead. In Helping Hands Tools v. EPA, the 9th Circuit Court of Appeals this week gave some protection to biomass plants from such redefinition of the source. However, other types of facilities will get no comfort from the decision.
Helping Hands Tools involved a challenge to a PSD permit issued to Sierra Pacific for a cogeneration plant to be located at one of its existing lumber mills. Under EPA’s BACT Guidance, Sierra Pacific stated that the purpose of the CoGen plant was to use wood waste from the mill and nearby facilities to generate electricity and heat. Relying in part on the 7th Circuit decision in Sierra Club v. EPA, which held that it would impermissibly redefine the source to require a mine-mouth coal generating plant to consider different fuels in its BACT analysis, the 9th Circuit found that EPA was reasonable in determining that, because a fundamental purpose of the CoGen plant was to burn wood waste, it would impermissibly redefine the source to require Sierra Pacific to consider solar power as part of its BACT analysis.
Importantly, the Court also rejected the plaintiffs’ request that Sierra Pacific consider greater use of natural gas. The Court concluded that very limited use of natural gas for the purposes of startup, shutdown, and flame stabilization did not undermine the fundamental purpose to burn wood waste. This is critical to source-located biomass facilities, because EPA’s GHG Permitting Guidance specifically says that greater use of an existing fuel should be considered in the BACT analysis:
"unless it can be demonstrated that such an option would disrupt the applicant’s basic business purpose for the proposed facility."
Unfortunately, the language of the decision appears to me to give EPA substantial leeway in future BACT analyses to redefine the source in other cases. It seems to me that, building on the 7th Circuit decision, the Court has simply created an exception to potential source redefinition in circumstances where the location of the facility justifies a very narrow fuel selection. If a coal plant intends to burn coal from the mine next door, ok. If a lumber mill intends to burn its own wood waste, ok. Otherwise, however, all bets are off.
What is particularly troubling was the Court’s acknowledgement that the GHG BACT guidance is vague, and its deference to EPA’s application of its own vague guidance. This is precisely the concern I noted when the Guidance was first issued. Time will tell, but I foresee some fairly extreme BACT determinations being blessed by some very deferential courts.
Posted on August 3, 2016
Back in the early days of the College, then-incoming President Brad Martin had asked interested Members to work with Lexis Nexis in developing some treatises on a range of topics. Indeed, years later you can go to this link to see how you too can join the very few who purchase some of these treatises, see a photo of Brad, and the list of ACOEL authors. New Council of Environmental Quality guidance on treatment of climate change in federal environmental impact analysis suggests these treatises may have some impact.
I agreed to and with the aid of one of Brad’s former associates, in 2010 authored a treatise entitled “Treatment of Greenhouse Gases Under the National Environmental Policy Act” . We addressed the then-recently released (February 2010) White House Council on Environmental Quality’s Draft Guidance on consideration of climate change and greenhouse gases in NEPA environmental reviews. In the conclusion I said:
With the prospects for comprehensive, economy-wide regulations on greenhouse gas emissions uncertain, climate change will continue to be addressed under existing environmental laws, including NEPA and its state-level counterparts. It has become increasingly clear that project proponents and lead agencies will be hard-pressed to avoid evaluating greenhouse gas emissions and other climate-related impacts attributable to public and private development projects. But disparate treatment across federal and state jurisdictions has left agencies and developers struggling with when and how to evaluate such impacts in their environmental review documents. Despite a growing body of regulations, case law, and guidance, substantial uncertainty remains regarding the scope, type, and depth of analyses required of climate change effects under NEPA and state analogues.
Little did I know or even suspect that the “disparate treatment” would continue unabated for another 5-plus years. The Draft Guidance was intended to be finalized in 2011, but the final version would not be released until the waning days of the Obama Administration On August 2, 2016, the CEQ has now issued its 34-page Final Guidance, which expressly requires all Federal agencies to include climate change in their analysis of environmental impacts.
In sum, the Final Guidance (at 4-6):
“[r]ecommends that agencies quantify a proposed agency action’s projected direct and indirect GHG emissions, taking into account available data and GHG quantification tools that are suitable for the proposed agency action; Recommends that agencies use projected GHG emissions (to include, where applicable, carbon sequestration implications associated with the proposed agency action) as a proxy for assessing potential climate change effects when preparing a NEPA analysis for a proposed agency action; Recommends that where agencies do not quantify a proposed agency action’s projected GHG emissions because tools, methodologies, or data inputs are not reasonably available to support calculations for a quantitative analysis, agencies include a qualitative analysis in the NEPA document and explain the basis for determining that quantification is not reasonably available; Discusses methods to appropriately analyze reasonably foreseeable direct, indirect, and cumulative GHG emissions and climate effects; Guides the consideration of reasonable alternatives and recommends agencies consider the short- and long-term effects and benefits in the alternatives and mitigation analysis; Advises agencies to use available information when assessing the potential future state of the affected environment in a NEPA analysis, instead of undertaking new research that is, and provides examples of existing sources of scientific information; Counsels agencies to use the information developed during the NEPA review to consider alternatives that would make the actions and affected communities more resilient to the effects of a changing climate; …and Counsels agencies that the “rule of reason” inherent in NEPA and the CEQ Regulations allows agencies to determine, based on their expertise and experience, how to consider an environmental effect and prepare an analysis based on the available information.”
How many of our LexisNexis recommendations were reflected in the Final Guidance I cannot yet say. But one moral of this tale is that College members may be able to direct a spotlight on needed changes in environmental regulating, even when those wheels of justice grind exceeding slow.
Posted on July 21, 2016
On December 12, 2015, in Paris, France, the parties to the U.N. Framework Convention on Climate Change—a total of 196 countries—unanimously agreed to a goal of net zero greenhouse gas emissions by the second half of this century. For the United States, the technical and logistical challenge of achieving the goal of the Paris Agreement (as it is called) is enormous, but so is the legal challenge.
The U.S. short-term emissions reduction objective, stated in a submission made in the run-up to the Paris conference, is “to achieve an economy-wide target of reducing its greenhouse gas emissions by 26%–28% below its 2005 level in 2025.” This objective, the U.S. says, “is consistent with a straight line emission reduction pathway from 2020 to deep, economy-wide emission reductions of 80% or more by 2050.” Achieving the short-term goal depends on the outcome of the presidential election as well as litigation involving the Clean Power Plan. And there was, until recently, no roadmap for deep U.S. reductions by 2050.
The absence of long-term analysis, in the U.S. and other countries, is being filled by the Deep Decarbonization Pathways Project, which is led by the Sustainable Development Solutions Network and the Institute for Sustainable Development and International Relations. It is based on the work of research teams in 16 countries that are responsible for 74 percent of the world’s greenhouse gas emissions--Australia, Brazil, Canada, China, France, Germany India, Indonesia, Italy, Japan, Mexico, Russia, South Africa, South Korea, the United Kingdom, and the United States. DDPP says in a report synthesizing the findings of the project to date that most of these countries “had never developed pathways consistent with a global 2°C limit, nor were they actively considering this question.” (The purpose of the Climate Change Convention is to keep the increase in global temperatures from human-caused greenhouse gas emissions below a “dangerous” level. That level is widely regarded as 2°C, or 3.6 °F, above pre-industrial levels, although the Paris Agreement seeks to keep the increase “well below” that level. The temperature increase to date is already about 0.9 °C above 1880 levels, when temperatures were first recorded.)
DDPP has conducted a technical analysis and policy analysis of pathways to deep decarbonization for the United States. These reports, prepared by E3 (an energy consulting firm), the Lawrence Berkeley National Laboratory, and the Pacific Northwest National Laboratory, appear to be the most detailed studies of how to achieve deep reductions in U.S. greenhouse gas emissions by 2050.
Perhaps the DDPP’s most important finding “is that it is technically feasible for the U.S. to reduce [carbon dioxide] emissions from fossil fuel combustion” by 85% from 1990 levels by 2050, which is “an order of magnitude decrease in per capita emissions compared to 2010.” If the U.S. did that, it could reduce its overall greenhouse gas emissions by 80% below 1990 levels by 2050.
Enormous changes would be required in the U.S. energy system to make those reductions happen. Because it is difficult to decarbonize gasoline and liquid fuels, the researchers said, meeting the 2050 objective would require almost complete decarbonization of electricity and, among other things, switching a “large share” of end uses that require gasoline and liquid fuels over to electricity (such as electric cars). It would also be necessary to produce fuel from electricity itself, they said, citing the production of hydrogen from hydrolysis as an example.
Decarbonizing electricity and producing fuel from electricity itself would double electricity generation but reduce its carbon intensity to 3% to 10% of current levels, requiring a vast increase in either renewable energy (as much as “2,500 gigawatts (GW) of wind and solar generation (30 times present capacity))” or carbon capture and sequestration. The average fuel economy for light duty vehicles such as cars would need to be over 100 miles per gallon, and these vehicles would need to be fueled almost entirely by electricity and hydrogen.
The challenge of translating these technical and policy pathways into a workable legal framework is considerable. Assuming, for example, that the U.S. can achieve 54.5 miles per gallon as a fleet-wide average for new vehicles by 2025, as the current Corporate Average Fuel Economy standard requires, how does the U.S. achieve a fleet-wide average of more than 100 miles per gallon for all vehicles by 2050? As DDPP explains, “[t]his would require the deployment of roughly 300 million alternative fuel vehicles by 2050.” A similar conundrum exists in reliance on renewable energy sources: what legal changes are needed to guide the development of the grid so that it can continue to be reliable while it accommodates a vast increase in intermittent electricity sources such as solar and wind energy?
Michael Gerrard, who directs the Sabin Center for Climate Change Law at Columbia Law School, and I have begun work on an edited volume that will identify and analyze a wide variety of legal pathways to decarbonization in the United States, based on these reports. We have assembled an excellent team of legal scholars and practitioners and are aiming for publication in 2017. We hope to inspire similar efforts in other countries.
An essential part of the decarbonization challenge is proposing, analyzing, and comparing various legal decarbonization pathways in each individual country, including the U.S. In the face of a daunting challenge, there exists a real possibility that lawyers can help improve human quality of life throughout the world by facilitating the creation of a legal framework that accommodates zero-carbon development.
Posted on July 11, 2016
In companion cases, on June 28 the DC Circuit Court of Appeals held that the Federal Energy Regulatory Commission, in its environmental impacts analysis of two Gulf Coast LNG terminals, need not assess the potential for increased natural gas extraction and use, or market effects. The first case deals with the Freeportproject in Texas, and the second the Sabine Passproject in Louisiana; the court considered these cases in parallel with each other, and the Sabine Pass case follows the reasoning in the Freeport case.
The Sierra Club and other national NGOs have attacked LNG facilities (1) for their potential to cause an increase in fracking to extract natural gas and the attendant emission of greenhouse gases, and (2) for increasing the use of U.S.- produced natural gas in world markets, which they assert will drive up the price of natural gas domestically, thus making coal more competitive and its use more prevalent in the U.S. On this basis the Freeport and Sabine Pass plaintiffs argued that FERC’s failure to consider these potential effects violates the National Environmental Policy Act. The court disagreed, finding that these effects are too attenuated for FERC to have to evaluate.
Central to the cases is the fact that the Natural Gas Act confers exclusive authority over the export of natural gason the Department of Energy, whereas FERC is only responsible for the siting of LNG facilities. The court reasoned that FERC’s approval of LNG facilities are not the proximate cause of gas exports, which only DOE can approve. Therefore, FERC need not consider environmental impacts related to market forces that could increase domestic production of gas and the use of gas outside of the United States.
These same projects face challenges brought by the same NGOs against DOE in which the issue is whether DOE complied with NEPA in authorizing exports of LNG. The Freeport and Sabine Pass courts “express no opinion” on the merits of the DOE cases. Still, it seems that the relationship between export approvals and operation of global gas markets is at least as attenuated as FERC’s authorization to construct facilities. My sense is that DOE will likely prevail there as well.
Posted on July 8, 2016
In May 2016, EPA finalized updates to its New Source Performance Standards (NSPS) for the oil and gas industry which amended 40 CFR Part 60, Subpart OOOO and added new requirements (Subpart OOOOa) to those established for Volatile Organic Compounds (VOCs) and sulfur dioxide (SO2) established for this industry sector in 2012. Importantly, the new requirements address reductions of greenhouse gas (GHGs) emissions, specifically methane. In its Executive Summary, EPA discussed the efforts by the agency to “complement” and “improve” the existing rules issued in 2012, stressing the agency’s efforts to engage states and stakeholders and solicit comments prior to its 2015 proposal or the rule. EPA also stressed it worked closely with the Bureau of Land Management to avoid conflicts and evaluated existing state and local programs to attempt to limit conflicts, where possible.
After promulgation of both the 2012 rule and 2013 amendments, the agency received petitions for reconsideration raising numerous issues, including the regulation of GHGs. EPA has addressed some of petitioners’ issues in 2015 amendments addressing storage vessels as well as in this rule, adding standards for methane and addressing storage vessel control device monitoring and testing; initial compliance requirements for bypass devices that divert emissions from control devices; recordkeeping requirements for repair logs for control devices which fail a visible emissions test, clarification of the due date for the initial annual report; emergency flare exemptions from routine compliance tests; leak detection and reporting for open-ended valves or lines; compliance period for leak detection and repair (LDAR) for newly affected process units; exemption to notification requirement for reconstruction of most types of facilities; and disposal of carbon from control devices. However, in a footnote, EPA makes clear it intends to complete its reconsideration process in a subsequent notice.
One interesting aspect of the 2016 rule publication is the extensive discussion of how the 1979 source category listing, “crude oil and natural gas production” is defined. The agency takes great pains to justify its broad authority over the industry to include not only production, but also processing, transmission and storage equipment. The EPA concludes that its category listing need not be revised to support the additions and amendments of this rule (even though it does clarify some wording), and sets out its justification for including the entire sector in its 2009 endangerment finding relating to GHGs.
EPA concluded that the Best System for Emissions Reduction (BSER) is the same for GHGs as it is for VOCs, so there are no changes required for equipment that was covered by the 2012 rule. Newly regulated sources covered by the 2016 rule include: heretofore unregulated hydraulically fractured oil well completions, pneumatic pumps, fugitive emissions from well sites and compressor stations; sources regulated under the 2012 regulation for VOCs for which GHGs are now also regulated (hydraulically fractured gas well completions and equipment leaks at natural gas processing plants); and certain equipment that is used across the source category for which subpart OOOO regulates emissions of VOCs from only a subset (pneumatic controllers, centrifugal compressors and reciprocating compressors), with the exception of compressors located at well sites.
In addition to emission reductions, LDAR utilizing optical gas imaging semi-annually is required for well sites and compressor stations. (Method 21 at a repair threshold of 500 ppm may be used.) Initial monitoring surveys must take place by June 3, 2017 or within 60 days of the startup of production, whichever is later. Repairs must be made within 30 days and a resurvey is required within 30 days of repair. Also, a monitoring plan that covers collection of fugitive emissions components is required to be developed and implemented for well sites and compressor stations. At natural gas processing plants, equipment leaks of methane (GHGs) are subject to the same requirements as those for VOCs. The compliance period begins on November 30, 2016.
And, the rule embraces “next generation” electronic reporting via EPA’s CDX, for enhanced accessibility and transparency to the public, as soon as the forms and systems are available. Professional engineers are required to provide certifications of technical infeasibility of connecting a pneumatic pump to an existing control device and to design closed vent systems.
Finally, there is a complicated discussion of EPA’s interpretation of UARG v. EPA, which merely results in EPA concluding that the rule should not affect applicability of Title V permit or PSD/NSR applicability determinations for “anyway” sources, even though, if not otherwise required to obtain and comply with a Title V permit, emissions of GHGs (methane) alone will not subject a source to Title V permit requirements.
Posted on June 17, 2016
If you needed any further proof that energylaw is very complicated, Wednesday’s decision in North Dakota v. Heydinger should convince you. The judgment is simple – the 8th Circuit Court of Appeals struck down a Minnesota statute which provides in part that:
"no person shall . . . (2) import or commit to import from outside the state power from a new large energy facility that would contribute to statewide power sector carbon dioxide emissions; or (3) enter into a new long-term power purchase agreement that would increase statewide power sector carbon dioxide emissions."
Why, you ask?
- The panel opinion, by Judge Loken, stated that the Minnesota statute violates the dormant Commerce Clause, by regulating purely “extraterritorial” economic activity.
- Judge Murphy, in the first concurrence, disagreed with Judge Loken’s conclusion that the statute violates the dormant Commerce Clause, but joined the judgment, because she concluded that the statute is preempted by the Federal Power Act.
- Judge Colloton, in the second concurrence, agreed with Judge Murphy that the statute does not violate the dormant clause, but also concurred in the judgment. Judge Colloton concluded that, to the extent that the “statute bans wholesale sales of electric energy in interstate commerce,” it is preempted by the Federal Power Act. However, Judge Colloton wrote separately, because he at least partially disagrees with Judge Murphy (as well as with Judge Loken) and does not believe that the Minnesota statute constitutes a complete ban on wholesale sales of energy that increase CO2 emissions. However, Judge Colloton concluded that, to the extent that the statute is not preempted by the Federal Power Act, it is preempted by the Clean Air Act.
Is that sufficiently clear?
I do feel compelled to add two final notes. First, I don’t understand why Judge Loken wrote the panel opinion, when his rationale did not command a majority. Indeed, as Judge Colloton pointed out, the Court should not even have reached the constitutional issue, since a panel majority existed that was prepared to strike down the Minnesota statute on statutory grounds. (Preemption is considered a statutory, not a constitutional, rationale.)
Second, don’t analogize the electric energy transmission to the flow of water in a pipe, at least before Judge Murphy. Here’s your electricity and magnetism primer for the day, courtesy of the Judge.
"In the electricity transmission system, individual electrons do not actually “flow” in the same sense as water in a pipe. Rather, the electrons oscillate in place, and it is electric energy which is transmitted through the propagation of an electromagnetic wave.
Certainly brought me back to course 8.02 at MIT. Not one of my favorites.
Posted on June 1, 2016
Since 2010, EPA and other federal agencies have used the Federal Social Cost of Carbon (“FSCC”) to estimate the climate benefits of federal rulemakings. The FSCC is an estimate of the monetized damages associated with an incremental increase in carbon dioxide (“CO2”), conventionally one metric ton, in a given year. The FSCC was developed by a group of federal agency representatives known as the Interagency Working Group on Social Cost of Carbon (“IWG”). In developing the FSCC, the IWG relied on three Integrated Assessments Models – the DICE model (“Dynamic Integrated Climate and Economy”) developed in 1990 by William Nordhaus, the PAGE model (“Policy Analysis of Greenhouse Effect”) developed in 1992 by Chris Hope, and the FUND model (“Climate Framework for Uncertainty, Negotiation and Distribution) developed by Richard Tol in the early 1990s. The primary virtue of the DICE, PAGE, and FUND integrated assessment models is that all contain simplified representations of economic models, climate models, and impact models that allow integration of climate processes, economic growth, and interaction between climate and economy.
The IWG has described the purpose of the FSCC as allowing federal agencies to incorporate the social benefits of reducing CO2 emission into cost-benefit analyses of regulatory actions that have small or marginal impacts on cumulative global emissions. The purpose of the FSCC process is to ensure that federal agencies are using the best available information and to promote consistency in the way agencies quantify the benefits of reducing CO2 emissions, or costs from increasing emissions, in federal regulatory impact analyses. The issue that is now coming up before some regulatory agencies is whether the FSCC can be employed in site-specific policy decision-making, such as state utility integrated resource planning.
In Responses to Comments issued in 2015, the IWG stated that it has not addressed the use of FSCC outside the federal regulatory context, such as in NEPA analysis, state-leveling resource planning, or “pricing” carbon in the marketplace. The IWG itself has acknowledged the large degree of uncertainty and imprecision in the estimates derived from the use of the integrated assessment models, especially as the time horizon for damage estimates reaches out to the year 2300. The IWG has observed that any such assessment will suffer from uncertainty, speculation, and lack of information about (1) future emissions of greenhouse gases, (2) the effects of past and future emissions on the climate system, (3) the impact of changes in climate on the physical and biological environment, and (4) the translation of these environmental impacts into economic damages. As a result, the IWG has stressed that decision makers should be very cautious in their reliance on the integrated assessment models. The proponents of the FSCC do not dispute the uncertainty and imprecision of the integrated assessment model process but they contend that there is no viable alternative.
Regardless of whether the FSCC is appropriate for federal regulatory impact analysis, it is simply too uncertain and speculative to be used in site-specific resource planning, including in NEPA analysis or utility resource planning. The values generated by the FSCC are highly uncertain and have serious weaknesses. These weaknesses are likely to be more significant in site-specific resource planning where the use of damage estimates demands greater precision than in regulatory impact analysis. This issue has been raised before the Minnesota Public Utilities Commission (“MPUC”) in a proceeding to establish environmental cost values for carbon dioxide emissions from electric generating units. As Nicholas F. Martin, environmental policy manager for the public utility Xcel Energy, testified, “whether the ‘correct’ value is $12 or $120 matters a great deal in integrated resource planning[, because] these two values could point to dramatically different resource mixes ….”
The Administrative Law Judge hearing the Minnesota case recently recommended the MPUC adopt a modified version of the FSCC. The two modifications involved (1) re-calculating the FSCC to reflect a shortened time horizon extending to the year 2200 (rather than 2300, as set by the IWG), and (2) excluding the value derived from the 95th percentile at a 3 percent discount rate (a value intended by the IWG to account for the high-end of the potential damage range). Both of these modifications were intended to reduce the level of uncertainty and speculation associated with the FSCC estimates. The MPUC is expected hold a hearing to address the ALJ’s report later this year.
Posted on May 27, 2016
In 1991, Iowa passed a law prohibiting the delivery of yard waste to landfills. It was during a time when there was a general panic that landfills were filling up too fast. Twenty-two states have passed similar laws. They all saw it as a win-win: compost could be created and sold by the city and the landfills would last longer. A couple short decades later, several states have had second thoughts. In 2015, Iowa passed a law that allows certain landfills to start accepting delivery of yard waste. The reasoning is instructive.
Landfills contain a staggering amount of potential energy. The tires, paper products and plastic wastes, when burned for energy recovery, could light up a town. But the cost of getting the BTUs out of the waste doesn’t make economic sense – yet. There are exciting, new processes on the horizon that will have us mining that garbage for the energy sink it actually is, but that is still a ways off. One form of energy recovery that is economically viable, however, is methane recovery. As the garbage breaks down, it gives off methane gas that can be captured and burned. Many landfills across the country do this type of recovery and find it simple and profitable.
To effectively produce methane, however, garbage must degrade. The recycling push of the 80s and 90s took away the really good degradables from the waste stream – boxes, newspapers and yard waste were targeted as prime recyclables. The effect was that the best fuel for garbage degradation (and thus methane creation) was banned. Sure, it went towards the worthy goals of paper recycling and creation of high quality compost, but at what cost?
Iowa decided to look into that question. They considered the cost of producing compost from yard waste and compared it to the cost of recovering additional methane that would be made possible by returning the green gold of yard waste to the landfill degradation process. As it turns out, recycling loses.
The analysis turned on a number of factors:
· The cost of buying, maintaining and fueling the trucks, machinery and facility needed for composting would be eliminated resulting in a yearly savings of $2 million;
· Methane recovery would increase from the equivalent of powering 11,000 homes to powering 18,000 homes;
· According to a study commissioned by the city of Des Moines, annual greenhouse gas emission would be reduced by 11% and the landfilling option would provide more than three times the greenhouse gas benefit presented by composting.
Sierra Club is on record as opposing the trend (Georgia, Arkansas, Florida and Nebraska also now allow landfilling of yard waste) because it will result in landfills reaching capacity sooner. In the case of one Iowa landfill, its estimated life would be reduced from 2054 to 2052. Also, Sierra Club argues that more uncaptured greenhouse gases will be produced, but this seems to ignore the net savings from the other GHG reductions identified in the study.
I don’t have any idea whether returning yard waste to landfills is a net positive for the environment. As counterintuitive as it seems, it appears to hold promise. And if it does, where else might full cost accounting be used to guide environmental legislation? At least some states are asking the question - and I suspect more will follow.
Posted on May 23, 2016
On Tuesday, the Supreme Judicial Court of Massachusetts (SJC) ruled that MassDEP had violated the Global Warming Solutions Act by failing
"To promulgate regulations that address multiple sources or categories of sources of greenhouse gas emissions, impose a limit on emissions that may be released, limit the aggregate emissions released from each group of regulated sources or categories of sources, set emissions limits for each year, and set limits that decline on an annual basis."
The SJC gets the final word, so I won’t spend much time explaining why the SJC got it wrong, though I will note that to suggest that the legislature’s use of the phrase “desired level” of GHG emissions unambiguously requires MassDEP to establish hard targets was at best overenthusiastic.
The bigger question at this point is what the decision means. First, it’s clear that MassDEP must establish hard declining emissions limits for more than one, but less than all, categories of GHG emitting sources.
Second, MassDEP must promulgate regulations that limit total emissions – not emission rates.
Third, the regulations must truly control Massachusetts sources. The SJC specifically found that RGGI doesn’t satisfy the GWSA requirement, in part because Massachusetts sources can purchase allowances from out of state facilities.
But where does this leave MassDEP? In a deep hole, for sure. Unless it wants to ditch RGGI, it can’t regulate power generation, because the type of program that the SJC said is required would simply be incompatible with RGGI.
How about mobile sources? They are the largest growing source of GHG emissions. Unfortunately, we come back to the SJC’s injunction that MassDEP must regulate total emissions, not emission rates. You tell me how MassDEP is going to issue regulations setting a cap on mobile source emissions.
The only obvious candidates I see are buildings and industrial sources other than power generation.
I don’t envy MassDEP – and the nature of the task only emphasizes the extent of the SJC’s overreach here – but I said I wouldn’t get into that.
Posted on April 29, 2016
In January TransCanada sued the Obama Administration over its denial of a permit for the Keystone XL pipeline to cross the US-Canada border. In its lawsuit TransCanada asserts that the President exceeded his executive authority and usurped Congress’ constitutional power to regulate commerce.
The lawsuit, filed in federal court in Houston, Texas, comes after TransCanada spent seven years mired in the administrative process. TransCanada’s complaint recounts the key events of those seven years as follows.
In 2008 TransCanada was granted a border crossing permit for Keystone I, so there is already a Keystone pipeline that crosses the US-Canada border in North Dakota. The State Department raised no objections regarding GHG emissions in connection with that permit. In 2009, then Secretary of State Clinton granted a cross-border permit to Enbridge for its Alberta Clipper pipeline, concluding that GHG emissions were not a basis for denying a border crossing permit.
In 2008, seeking to expand capacity, TransCanada applied for a second US-Canada border crossing permit for the Keystone XL project. The permit application covered a 1.2 mile section of pipe that was part of a broader 1,700-mile pipeline project, most of which was to be located in the United States.
Following this application, the State Department issued a series of draft and final environmental impact statements that found minimal GHG impacts. Nevertheless, in November 2011 the State Department announced it could not make a final determination until an alternative route through Nebraska was selected.
In December 2011 Congress passed an act that required the President to grant the permit to TransCanada within 60 days or report to Congress why the President did not believe the pipeline crossing served the national interest. In January 2012 President Obama directed the Secretary of State to deny the permit on the ground that 60 days was insufficient time. Secretary Clinton denied the permit but indicated that a renewed application would be considered. In May 2012 TransCanada submitted a renewed application.
Following this second application the State Department issued another series of EISs which found that the project would not substantially increase GHG emissions. In early 2015, Congress passed the Keystone Pipeline Approval Act, which authorized the Keystone XL project without any further action or approval by the President. President Obama vetoed the Act and Congress was unable to override the veto.
In November 2015, Secretary Kerry denied the renewed application. The Record of Decision found that the pipeline would advance the national interest by providing added energy security and economic benefits, and furthering the United States’ relationship with Canada. The ROD also found that GHG emissions might actually increase without the pipeline because the crude oil would otherwise be transported by rail and tankers. Nevertheless, the Secretary concluded that the pipeline did not serve the national interest because it “would undermine U.S. climate leadership and thereby have an adverse impact on encouraging other States to combat climate change” in advance of the December 2015 Paris climate negotiations.
It is with the backdrop of these events that TransCanada challenged the President’s authority to regulate international pipeline border crossings.
Where does the President derive the authority to regulate international pipeline crossings, and particularly on the basis of the United States’ symbolic leadership role on climate change? The President relies upon Executive Order 13337, under which the President delegated authority to the Secretary of State to deny border crossings that do not “serve the national interest”. But because the Constitution gives Congress the power to regulate commerce, where does the President derive the power to delegate to the Secretary of State in the first place, particularly since Congress has never delegated the authority to regulate such border crossings to the President?
TransCanada’s complaint discusses the various U.S. Supreme Court decisions which address the President’s power to act in areas otherwise reserved to Congress but where Congress has not yet acted. These cases hold that the President does have power to act in such circumstances, but also hold that the President’s authority can be revoked at any time by Congress by simply expressing its contrary will. TransCanada argues that Congress expressed such contrary will when it passed the Keystone Pipeline Approval Act, thereby depriving the President of authority to take further action.
On April 1 the Obama Administration filed a Motion to Dismiss, arguing that the President’s powers over foreign affairs and as Commander-in-Chief provide sufficient independent constitutional authority to regulate pipeline border crossings. In addition, the Administration argues that, because the Keystone Pipeline Approval Act never became law, it provides no basis to challenge the President’s decision. The Natural Resources Defense Council, Friends of the Earth, Texas Environmental Advocacy Services, Community In-Power and Development Association and Center for Biological Diversity recently filed an Amicus Brief.
The outcome of this environmental controversy will depend not on statutory interpretation or common law but on fundamental concepts of separation of powers. The sometimes murky line between Presidential and Congressional authority will be tested here.
Posted on April 28, 2016
In auto racing, the black flag is the ultimate sanction, signaling that a competitor has been disqualified and has to leave the race. That’s what happened to EPA recently, when it withdrew a controversial proposed rule to “clarify” that the Clean Air Act prohibits converting a certified vehicle for racing.
Merits aside, EPA’s start-and-stop performance is an excellent example of notice-and-comment rulemaking gone wrong. The original proposal appeared last July, a brief passage buried in the middle of a 629-page proposed rule on greenhouse gas emissions for medium- and heavy-duty engines and vehicles – hardly the place where one would look for a rule directed at race cars. See 80 Fed.Reg. 40137, 40527, 40552 (July 13, 2016). As should have been expected, EPA’s pronouncement that the Clean Air Act flatly prohibits converting emission-certified vehicles for competition went unnoticed for months. It wasn’t until late December, nearly three months after the close of the comment period, that SEMA (the Specialty Equipment Market Association, the trade group representing the motor vehicle aftermarket industry) discovered the proposed rule.
That’s when the yellow flag came out. SEMA and its members blasted EPA’s interpretation as reversing a decades-old policy that allowed the race-conversion market to flourish, and for hiding the proposal in an inapplicable rule. EPA’s response was to hold to its interpretation and to post SEMA’s comment letter in a “notice of data availability” so that others could comment – not on EPA’s proposal, but on SEMA’s letter. 81 Fed.Reg. 10822 (March 2, 2016).
SEMA stepped up the pressure with a White House petition that quickly garnered more than 150,000 signatures. Then came a letter to EPA from seven state attorneys general, and bills in both the House and Senate (brilliantly named the Recognizing the Protection of Motorsports Act, or “RPM”) to reverse EPA’s interpretation and codify the race exemption in the Clean Air Act.
On April 15, EPA hit the brakes, announcing that it was withdrawing its proposal. www.epa.gov/otaq/climate/regs-heavy-duty.htm. EPA stated that it never meant to change its policy towards “dedicated competition vehicles,” but admitted that its “attempt to clarify led to confusion.” EPA voiced its support for “motorsports and its contributions to the American economy and communities all across the country.
The checkered flag came out, but EPA had already pulled into the pits.
Posted on April 27, 2016
This week, the Federal Highway Administration issued a Noticed of Proposed Rulemaking to promulgate performance measures to be used in evaluating federal funding of transportation projects. The requirement for performance measures stems from the Moving Ahead for Progress in the 21st Century Act, aka MAP-21. MAP-21 requires the FHWA to establish performance standards in 12 categories, one of which is “on-road mobile source emissions.”
The NPRM addresses this criterion, focusing largely on emissions of criteria pollutants. However, buried in the 423-page NPRM is a six-page section labeled “Consideration of a Greenhouse Gas Emissions Measure.”
And thus the FHWA drops a bomb that could revolutionize federal funding of transportation projects. It’s important to note that this may not happen. If the next President is Republican, it certainly won’t. Even if the FHWA goes forward, there would be legal challenges to its authority to use GHG as part of the performance measures.
If it does go forward though, it really would be revolutionary. As the NPRM states, transportation sources are rapidly increasing as a source of GHG emissions:
GHG emissions from on-road sources represent approximately 23 percent of economy-wide GHGs, but have accounted for more than two-thirds of the net increase in total U.S. GHGs since 1990.
The enormity of both the challenges facing the FHWA in attempting to establish a performance measure for GHG emissions and the potential impact implementation of a GHG performance measure would have is reflected in some of the 13 questions that FHWA posed for comment:
- Should the measure be limited to emissions coming from the tailpipe, or should it consider emissions generated upstream in the life cycle of the vehicle operations?
- Should CO2 emissions performance be estimated based on gasoline and diesel fuel sales, system use (vehicle miles traveled), or other surrogates?
- Would a performance measure on CO2 emissions help to improve transparency and to realign incentives such that State DOTs and MPOs are better positioned to meet national climate change goals?
- How long would it take for transportation agencies to implement such a measure?
Welcome to the brave new world of integrated planning to manage GHG emissions in a critical sector of our economy.
Posted on April 18, 2016
As reported by Seth Jaffe in this space, a federal magistrate judge in Oregon has kept alive the dreams of a group of young plaintiffs—aided by environmental advocacy groups—to compel government action against climate change. Like a similar case brought by the same plaintiffs a few years ago in state court, discussed below, the federal case seeks a declaration that government inaction violates the public trust. But in the federal case, plaintiffs added claims that their constitutional rights to life, liberty and property also are being violated.
The judge denied the government’s motion to dismiss on the basis that the matter is a political question better left to Congress. Magistrate Judge Thomas M. Coffin reasoned that the pleadings were adequate on their face and that the substantive issues raised by the defendants should await motions for summary judgment or trial. Still, the judge gave hope to the plaintiffs, which, I think will be short lived. Climate change is simply too big, diffuse and complex an issue for the courts to try to fashion a remedy around.
This same group of plaintiffs has had mixed success in pursuing its objectives at the state level. In June 2014 I posted about the Oregon Court of Appeals reversing and remanding a trial court’s dismissal of a similar claim against the state. The appellate court concluded that the plaintiffs were entitled to a determination whether the atmosphere is a public trust resource and whether Oregon state government had breached its fiduciary responsibility by not adequately protecting it. On remand, Lane County Circuit Court Judge Karsten H. Rasmussen granted the state summary judgment and dismissed the suit with prejudice. The case is now again pending before the Court of Appeals.
In his 19-page opinion, Judge Rasmussen concluded that the public trust does not extend to the atmosphere. The contours of the public trust are a matter of state common law, and Oregon law ties the public trust to title and restraints on alienation. The court concluded that there could be no title in the atmosphere and therefore public trust fiduciary obligations do not exist. The court also noted that traditional public trust resources, such as submerged lands, are exhaustible, which under Oregon law confers a fiduciary responsibility on the state. While the atmosphere may be altered or even damaged, the court found that it is not exhaustible.
The court added the following thought, which I think will guide the U.S. District Court when it hears the current case:
The Plaintiffs effectively ask the Court to do away with the Legislature entirely on the issue of GHG emissions on the theory that the Legislature is not doing enough. If "not doing enough" were the standard for judicial action, individual judges would regularly be asked to substitute their individual judgment for the collective judgment of the Legislature, which strikes this Court as a singularly bad and undemocratic idea.
Watch this space for further developments in Oregon state and federal courts.
Posted on April 13, 2016
Late last week, Magistrate Judge Thomas Coffin concluded that the most recent public trust case, which seeks an injunction requiring the United States to take actions to reduce atmospheric CO2 concentrations to 350 parts per million by 2100, should not be dismissed.
The complaint here is similar to, but broader than, others of its ilk. As we noted previously, at least one federal court has already held that there is no public trust in the atmosphere. Perhaps in response to that case, the plaintiffs here appear to have focused their arguments on the government’s public trust responsibilities with respect to various waters of the United States, though the opinion does not make clear precisely what the complaint alleges to be the subject of the public trust obligation.
The plaintiffs not only allege that the United States has violated its public trust obligations, but that that violation in turn constitutes a violation of the plaintiffs’ substantive due process rights. Magistrate Judge Coffin takes pains to make clear that this is only about a motion to dismiss, but I still think he got it wrong.
Indeed, I think that Magistrate Judge Coffin ignored that well known latin maxim: “Oportet te quasi ludens loqui.” (Which is how the on-line translator I used translated “You must be joking.” I hereby disclaim any warranty that this is even close to correct.)
Call me old-fashioned, but I believe in judicial restraint. And that applies to everyone. Traditionally, conservatives have accused liberals of judicial activism. To my totally objective mind, in recent years at least, it is the conservative judges who could more fairly be called activist. For one case, at least, the shoe seems to be back on its original foot. I just cannot see this decision standing. The District Judge should reject Magistrate Judge Coffin’s Findings and Recommendation. If he or she doesn’t, this case is sufficiently novel and important to warrant interlocutory appeal, and the 9th Circuit should reverse. And if that doesn’t happen, it will be up to the eight (oops, I meant nine) members of the Supreme Court to get it right. One of them surely will.
Posted on February 17, 2016
For us gray hairs, the phrase used to be “Dateline”, now it’s “Tweetline” . . . Flash!. . . President Obama @POTUS “. . . Addressing climate change takes all of us, especially the private sector going all-in on clean energy worldwide."
Apparently “all of us” didn’t include five Supreme Court Justices, led by its Chief Justice, John Roberts. Indeed, it was SCOTUS going “all out” for climate change. As in, going “all out” to frustrate one of the EPA’s and President Obama’s signature efforts to respond to and act upon climate change challenges to the global environment. What EPA and the President got (by a split decision) instead was a stay that some have characterized as the quashing of the biggest environmental regulatory change in United States history.
That body blow to regulatory appropriation of the climate change debate was instigated by the challenge of virtually every major coal power company to the EPA’s issuance of binding emission reduction requirements for existing domestic power plants. The coal, fired power industry argued that EPA’s action was “draconian” and would cause the “shutting down or curtailing generation from existing plants and shifting that generation to new sources”. That, of course, was the precise intent of POTUS and other signatories of the Paris climate change accord last year.
SCOTUS’s stay was unprecedented and terse. Not a word of explanation about why the stay was issued. The proponents of the stay were modestly baffled. In the words of Basin Power’s legislative rep, Dale Niezwaag, the decision came as a surprise . . . "The supreme court has never issued a stay on a rule that hasn't been ruled on by a lower court. So this is precedent, setting from our point. When we put it in, we figured it was going to be a long shot, so we were very surprised that the Supreme Court ruled in our favor”.
There are takeaways galore. However, two are most intriguing to me. Was this unprecedented stay an unwarranted and thinly disguised, reach into the realm of executive branch constitutional authority? Second, did the Supreme Court simply muscle its way into a social and scientific debate that begs any legal or factual question of “irreparable harm” to either the power industry or the citizenry of the republic. In short, was the stay an expression of SCOTUS climate change denial?
The stay makes EPA’s rules unenforceable and will undoubtedly limit their intended goal of achieving emissions cuts to (ostensibly) slow global warming. More importantly, the ruling, in effect, invalidated POTUS’s pledge on climate agreement made in Paris last spring. How should one construe the interjection of the Supreme Court into a case that would have, under normal circumstances, been taken up by the Court of Appeals for the District of Columbia Circuit as soon as early 2017? Was a signal being sent to that court to heed the antipathy some believe certain SCOTUS justices have towards the global warming debate altogether?
In keeping with my “newsflash” metaphor, since I started writing this post, the country mourns the unexpected passing of Justice Antonin Scalia. The lack of a tie breaker justice for the foreseeable future could throw the question of the right of the EPA to forge ahead on the POTUS’s climate change agenda into months or years of limbo. Will the D.C. Circuit’s decision answer the question next spring? Will certain senators relent and vote in a replacement for Justice Scalia this year? Will the eight remaining justices do something other than call things a tie until they have a full complement on the bench?
Stay tuned to this blogspot for more breaking news.
Posted on February 12, 2016
The Supreme Court's unexplained stay of the clean power plan was "one of the most environmentally harmful judicial actions of all time," writes Michael Gerrard of Columbia Law School in a recent, excellent blog. Rather than venting outrage, Gerrard quickly moves on to explain that the Clean Power Plan isn’t the only way to cut carbon pollution.
Ramping up efforts like fuel efficiency standards for cars and trucks, and building efficiency standards, he notes, will also help reduce carbon pollution. Gerrard mentions a couple of points about agriculture, but often, this sector is overlooked when it comes to climate solutions. It’s worth taking a closer look at some of the opportunities to reduce climate pollution from our food system.
Food waste is the second largest component of most landfills. As it rots, it releases methane, a potent greenhouse gas. A recent report by the UN Conference on Trade and Development estimates that 2 percent to 4 percent of all manmade climate pollution arises simply from food rotting in landfills.
Keeping food waste out of landfills can help reduce methane pollution. Massachusetts, California, Connecticut, Rhode Island, Vermont, and some cities have enacted laws to manage organic waste disposal in landfills. The idea is to create incentives to reduce food waste and divert it to other purposes, such as animal feed or composting. Instead of being thrown away and becoming a source of pollution, this “waste” can be put to good use. Landfill gas collection systems can be further incentivized. And the nascent effort to reduce food waste from businesses and households can be significantly ramped up.
Another major source of greenhouse gases is the over application of fertilizer. Excess nitrogen fertilizer causes two big problems. The first is water pollution. Nitrogen that isn’t taken up by crops runs off farms and enters larger waterways, where it stimulates the growth of algae and creates “dead zones” deprived of oxygen. The second, and less frequently discussed issue, is the volatilization of nitrogen into nitrous oxide, a greenhouse gas about 300 times more potent than CO2. The IPCC estimates that 12 percent of all non-CO2 greenhouse gas emissions come from synthetic fertilizer application.
A number of techniques can reduce these emissions while also providing a cost benefit to farmers. Farm policies could encourage practices like cover cropping, which reduces the need for fertilizer by making soils more rich and fertile. Crop rotations can do the same, yet current crop insurance programs actually discourage the use of these practices. Precision application technologies for fertilizers are getting ever better, but their uptake on farms is slow.
Manure from animals, and the "enteric emissions" from cattle (more commonly thought of as belching) are two more significant sources of climate pollution. Enteric fermentation alone may account for as much as 40 percent of all non-CO2 greenhouse gas emissions, according to the IPCC. Changes in diet might help with these emissions, but this is an area that needs more research.
Some of the emissions from manure can be captured if manure lagoons were covered and better managed. As it stands, these pits are only slightly regulated and are major sources of water pollution sources as well as odor nuisances. An even better practice is to raise cows on rotating pastures, where their waste can enhance soils and help store carbon. And, of course, if Americans did shift to a diet lower in red meat, as per the recommendation of the Dietary Guidelines Advisory Committee, we could further reduce climate pollution from cattle.
Agriculture is one of our nation's most important economic sectors, and is especially vulnerable to the extreme weather impacts of climate change. Its product -- food -- is critical not only for our economy, but is an integral and uniquely personal part of our everyday lives. When we think about how to address climate change, it makes sense to think about food and agriculture. The food we choose to produce, and how we produce it, use it, and dispose of it, all have an impact on climate pollution—and therefore have the potential to become climate solutions.
Posted on February 11, 2016
I am a terrible predictor of what cases the Supreme Court will hear and what the Court will decide on those matters it chooses to hear. For example, I wrongly predicted that the Supreme Court would never consider reviewing the D.C. Circuit’s decisions in cases involving other recent EPA regulations, but the Supreme Court chose to hear those cases, which led to its decisions in Utility Air Regulatory Group v. EPA and Michigan v. EPA. And if asked to guess whether the Court would issue a stay of EPA’s Clean Power Plan under section 111(d) of the Clean Air Act, I might well have said that the odds were greatly against that happening – despite the merits of the arguments being raised by those seeking the stay.
Perhaps, though, my poor predictive abilities are the result of my looking at each case in isolation instead of looking at them in combination and considering whether the Supreme Court’s February 9, 2016 stay decision is an outgrowth of the combined knowledge gained by the Court in its recent reviews of those other Clean Air Act cases. Specifically, as pointed out by State Petitioners in their briefs in support of a stay of the Clean Power Plan (see here and here,) EPA has touted its Plan as being one that will completely transform the way energy is created and delivered in this country even though – argued State Petitioners – the plain statutory language (of Clean Air Act section 111(d)) does not authorize such Agency action, and the approach of the Clean Power Plan is at odds with EPA’s 45-year history of implementing section 111(d). Maybe such claims struck a chord with the Court, which – in UARG – told EPA that the Agency cannot make “decisions of vast ‘economic and political significance’” under a long-extant statute, like the Clean Air Act, without “clear congressional authorization.”
And then there was Michigan, where the Court determined that EPA had proceeded unlawfully in adopting another extensive and expensive Clean Air Act regulatory program. State Petitioners in the Clean Power Plan litigation made sure that the Court was aware that by the time the Court issued its decision in Michigan – a case where the underlying rule was not stayed during the pendency of litigation – the affected parties had spent billions of dollars to meet the terms of the underlying, un-stayed rule. In other words, justice delayed in Michigan was justice denied.
None of this is to say what the Court will or will not do if and when it reviews arguments on the lawfulness of the Clean Power Plan. I make no predictions on that. But I believe the Court acted appropriately in calling for the completion of litigation before requiring affected parties to make the massive, unprecedented, costly, and transformative changes to the energy industry that the Clean Power Plan demands.
Posted on February 10, 2016
The Supreme Court’s unprecedented, unexpected and unexplained action yesterday staying implementation of the Clean Power Plan is one of the most environmentally harmful judicial actions of all time. However, the damage it does to the United States’ ability to meet its Paris pledge is less than it might seem. But that is not because the Clean Power Plan wasn’t important; it is because the Plan didn’t do nearly enough.
The Intended Nationally Determined Contribution (INDC) that the U.S. submitted in advance of COP21 reiterated the prior goal of achieving a 17% reduction below 2005 levels in 2020, and conveyed a new pledge of a 26% to 28% reduction by 2025. The INDC cited the Clean Power Plan as one of the actions being taken to meet those pledges, but did not present any numbers on what actions would lead to what reductions.
More detail was presented in the Second Biennial Report of the United States under the Framework Convention on Climate Change, submitted by the Department of State in January 2016. As the report makes clear, the Clean Power Plan’s actual emissions reductions do not begin until 2022, and thus have no bearing on achievement of the 2020 goal. From 2020 to 2025, the Report expects carbon dioxide emissions to fall from 5,409 to 5,305 MtCO2e (Table 4) with implementation of the Clean Power Plan, energy efficiency standards, fuel economy standards, and numerous other measures that are already on the books, and down to 5,094 in 2030. (The report does not separately specify how much of this is due to the Clean Power Plan alone; the numbers result from a complex modeling exercise that included numerous interrelated actions.)
That is not nearly enough of a reduction to meet the 26% target (much less the 28% aspiration) for 2025. Instead, a host of additional measures are also needed. The Biennial Report lists these as possibilities to reduce carbon dioxide emissions:
- Full implementation of Phase II heavy-duty vehicle fuel economy standards.
- Finalization of proposed, new, or updated appliance and equipment efficiency standards.
- Increased efficiency of new and existing residential and commercial buildings.
- Reduction in industrial energy demand in several subsectors.
- Additional state actions in the electricity sector.
- Enhanced federal programs that lead to greater efficiencies in industry and transportation, including greater biofuel deployment and commercial aviation efficiency.
To address other greenhouse gases, the Biennial Report lists these possible added measures:
- An amendment (already in the works) to the Montreal Protocol on Substances that Deplete the Ozone Layer to phase down production and consumption of hydrofluorocarbons.
- Measures to reduce methane emissions from landfills, coalmining, agriculture, and oil and gas systems.
- More efficient nutrient application techniques that reduce nitrous oxide emissions
Even all of the above is not enough to meet the 2025 goals. The Biennial Report puts heavy reliance on the land-use sink – on the ability of forests and other vegetated areas to absorb a considerable amount of the greenhouse gases that are emitted. And even with an “optimistic sink” scenario and a number of other favorable assumptions, the key summary graph in the Biennial Report (Figure 6) shows a reduction of about 27% in 2025.
In sum, while the Clean Power Plan is the biggest game in town in terms of achieving the Paris goals, it is by no means the only game in town. While we express our justifiable fury over the Supreme Court’s action, we need to bear in mind that there are many other things that the U.S. must do in the next several years to control greenhouse gas emissions.
Posted on February 10, 2016
Yesterday, the Supreme Court stayed EPA’s Clean Power Plan rule. No matter how much EPA and DOJ proclaim that this says nothing about the ultimate results on the merits, the CPP is on very shaky ground at this point.
Everyone, supporters and opponents alike (and yours truly), thought that there was no possibility that the Court would grant a stay. And it is precisely because a Supreme Court stay of a rule pending judicial review is such an “extraordinary” – to use DOJ’s own word – form of relief that one has to conclude that five justices have decided that the rule must go.
This isn’t just a preliminary injunction; it’s a preliminary injunction on steroids. First, everyone seems to acknowledge that it’s unprecedented for the Supreme Court to stay a rule pending judicial review. Second, the standards in DOJ’s own brief make pretty clear that a stay will only issue if the Court is pretty convinced on the merits. Finally, it’s worth noting that the Court implied that it does not even trust the Court of Appeals, because the stay will remain in force, even if the D.C. Circuit affirms the rule. The stay will only terminate either: (1) if the Court of Appeals upholds the CPP and the Supreme Court denies certiorari or (2) if the order is upheld and the Supreme Court also upholds it.
Back to the drawing board for EPA. Perhaps § 115 of the Clean Air provides a way out!
Posted on February 1, 2016
New York participates in the cap-and-trade system operated by 9 northeastern and mid-atlantic states known as the Regional Greenhouse Gas Initiative that limits carbon dioxide (CO2) emissions from fossil-fuel burning power plants. These plants must purchase allowances at auction for each ton of CO2 they emit. An efficient gas-fired plant that produces 225 MWs of electricity emits approximately 1.2 million tons of CO2 a year.
During the adoption process for New York’s final RGGI rule in 2008, power generators predicted serious adverse consequences. These included increased electricity costs for consumers, added operating costs for generators who would never recoup all CO2 allowance costs from the sale of electricity, and concerns about longer term energy transactions due to the uncertainty of allowance prices.
In comments on a draft RGGI rule, generators requested the State to establish a price cap of $0.75 on the cost of a CO2 allowance to protect consumers from significant price increases and a sunset provision in the event a federal cap-and-trade program were established. The generators also expressed concern about the lack of available control technology for CO2 emissions.
Fast forward: at the last allowance auction in December 2015, the cost of a CO2 allowance was $7.50. New York generators purchased almost 6 million allowances reaping revenue of more than $44 million for the New York RGGI fund. At the previous auction in September, almost 10 million allowances were purchased at a cost of $59 million. Despite these high allowance costs, the lights are still on in New York. According to data published by the New York State Energy Research and Development Authority, updated as of January 16, the monthly average retail prices of electricity in the residential, commercial and industrial sectors have decreased between 2008 and 2015, attributable to the success of energy conservation and efficiency programs, the availability of more renewable energy, and the low price of natural gas and oil.
CO2 emissions from the power sector have decreased by more than 40% in the RGGI states since 2009 due to reductions in the regional CO2 cap. New York has been a significant contributor to those reductions. Revenue from the program of over $1 billion has been invested by the RGGI states in energy conservation and efficiency efforts, clean and renewable energy, direct bill assistance to households and greenhouse gas abatement. Importantly, RGGI also has the potential to assist states in meeting the CO2 reduction goals in EPA’s Climate Action Plan.
However, a report issued on January 20, 2016 by Synapse Energy Economics and the Sierra Club, entitled The RGGI Opportunity, states that RGGI's current requirements are not enough to get the RGGI states to their climate goals in 2030 and beyond (40% reduction in carbon pollution from 1990 levels) and it encourages more energy efficiency programs, increased levels of wind and solar projects, and adding 10 million battery electric vehicles, all of which will result in job creation.
The RGGI program has been a clear revenue and greenhouse gas reduction success, but there is potential in New York for RGGI funds to be diverted to the general fund. This last occurred in 2015 when the legislature approved a budget that moved $41 million of RGGI revenue to the general fund to be used for other environmental programs. Environmentalists considered this action a threat to the program. Since RGGI was adopted by executive action, not by statute as was the case in the other RGGI states, the environmentalists’ view is that RGGI funds can only be used for program purposes. The 2015 transfer of RGGI funds to the general fund could subject the program to challenge as a tax on electricity levied without the legislature’s approval. In contrast, the State’s 2016 budget does not include a raid on RGGI funds.
Would similar cap-and-trade programs work as well in other regions of the country? Yes, but the political will to establish such programs will depend in part on a region’s fuel mix. Since coal-fired power plants emit almost twice as much CO2 as gas-fired plants, the allowance costs for coal plants will be higher, thereby increasing the cost of the electricity they produce and making such facilities less competitive in regions that also have more efficient facilities. That said, if the programs’ revenues are pumped into energy conservation and efficiency programs, consumers could use and pay for less electricity.
Posted on January 28, 2016
Our friend Seth Jaffe wrote a very interesting blog on January 20, “Does the Paris Agreement Provide EPA With Authority Under the CAA to Impose Economy-Wide GHG Controls? Count Me Skeptical.” It took issue with a paper that I co-authored with several other colleagues in academia in which we argue that Section 115 of the Clean Air Act provides the EPA with broad authority to implement a multi-state, multi-source, multi-gas regulatory system to reduce greenhouse gases.
The blog post agreed with our paper that it would be great if Section 115 provided this authority because it means EPA could implement an efficient, flexible, cross-sectoral approach to reducing greenhouse gases (GHGs).
However, Seth questioned our conclusion that Section 115 provides such authority because, in his view, courts are likely to conclude the “reciprocity” requirement in Section 115 could not be satisfied by the nonbinding emissions reduction commitments countries made in the Intended Nationally Determined Contributions (INDCs) they submitted for the Paris agreement concluded at the United Nations climate conference in December. In the words of blog post, “I think most judges would interpret the word ‘reciprocity’ in a statute to mean something that is legally-binding; otherwise, it doesn’t mean anything.” For several reasons, we disagree.
First, a reviewing court does not need to interpret what the word “reciprocity” means in Section 115, because Congress has explicitly defined it. Reciprocity is the title of Section 115(c), which provides:
"This section shall apply only to a foreign country which the Administrator determines has given the United States essentially the same rights with respect to the prevention or control of air pollution occurring in that country as is given that country by this section."
The only right given to a foreign country by Section 115 is a provision in Section 115(b) that states a foreign country affected by air pollution originating in the U.S. “shall be invited to appear at any public hearing” associated with the revision of a relevant portion of the state implementation plan to address the pollutant. In short, Section 115 specifies that reciprocity means the foreign countries in question need to have given the U.S. “essentially the same rights” as are given by Section 115, and the only right provided in Section 115 is the procedural right to appear at a hearing.
Understanding the legislative history helps explain why the focus of the reciprocity requirement is on a procedural right. As we explain in detail in the paper, Section 115 was a procedural provision when it was first enacted in 1965: if pollution from the U.S. was endangering other countries, the other countries had a right to participate in abatement conferences where potential responses would be discussed, not a right to insist on actual emission reductions. Although Congress amended the provision in the 1977 Clean Air Amendments to replace the abatement conference with federal and state action through the Section 110 state implementation plan process, the reciprocity language in Section 115(c) was not changed, leaving it with its procedural test.
Second, we note in our paper that the Paris agreement contains a new set of procedures through which countries that join the agreement will be able to review and provide input on each other’s respective emissions reductions plans. To the extent a court might conclude that such procedural rights must be "legally binding," then the Paris agreement satisfies that test because although the emission reduction targets themselves that were submitted in the INDCs will not be legally enforceable by other countries, the procedural elements of the Paris agreement will be binding international law.
We note in the paper that although Paris provides a strong basis to satisfy Section 115 reciprocity, that reciprocity could also be satisfied by other international arrangements that the United States has with a variety of countries, particularly Mexico and Canada, the EU, and China.
Third, the blog post does not engage the issue of procedural reciprocity; rather it focuses on a substantive view of reciprocity (i.e. that reciprocity requires that other countries are actually reducing emissions of GHGs) and asserts that substantive reciprocity requirement could not be met by the internationally non-binding commitments made in the INDCs. Although we believe that the correct reading of Section 115 is that it only requires procedural reciprocity, we recognize that a court could conclude that Section 115 also implicitly includes a substantive reciprocity requirement. In the first instance, we noted that this requirement might be met by the international law principle sic utere tuo ut alienum non laedus, which directs nations to avoid causing significant injuries to the environment of other nations, most recently explained in the International Court of Justice’s Pulp Mills case.
The author skips over this element to focus his skepticism that the reciprocity requirement could be satisfied by non-binding commitments in the INDCs. But actually the U.S. and other countries have made reciprocally non-binding commitments in their INDCs. That is, the U.S. has made an international political commitment to reduce emissions a certain amount, and has received essentially the same rights in the non-binding international commitments from other countries to reduce emissions.
Someone could argue that the U.S. INDC may be non-binding, but Section 115 is domestic law in the U.S. and substantive reciprocity cannot exist unless other countries also have domestic laws requiring emission reductions. If this is the test, however, it can also be met. In fact, the INDCs submitted by other countries identified the binding domestic laws through which the INDCs would be implemented. We did not focus on this aspect in our paper, but some examples are: (1) the United States identified the Clean Air Act and other laws and regulations “relevant to implementation” of the U.S. commitment; (2) China identified the measures that had been incorporated into domestic law and regulation through previous five-year plans, and outlined a variety of policies and strategies that would be incorporated into subsequent five-year plans to implement their emissions commitment; and (3) the EU noted that the necessary legislation to implement its target was being introduced to the EU parliament in 2015 and 2016. Therefore, if “legally binding” domestic laws are required to find reciprocity under Section 115, EPA could reasonably examine the legally binding provisions in other countries’ domestic systems to find that reciprocity.
To summarize, our view is that Section 115 likely requires only procedural reciprocity. If a court concluded Section 115 required substantive reciprocity, then EPA could reasonably find that requirement met through the reciprocal political commitments that the U.S. and other countries made in Paris as well as through the binding domestic laws and regulations in the U.S. and other countries that will implement the commitments.
We look forward to further dialog on this topic, which we think is an important part of unlocking this powerful, untapped tool that the EPA possesses to design an efficient and flexible system to reduce GHGs.
Posted on January 20, 2016
In a very interesting article, Michael Burger of the Sabin Center and his co-authors suggest that, following the Paris climate agreement, § 115 of the Clean Air Act provides authority for EPA to develop economy-wide GHG emissions reduction regulations that would be more comprehensive and efficient than EPA’s current industry-specific approach. And what, you may ask, is § 115? Even the most dedicated “airhead” has probably never worked with it.
Section 115 provides that, where EPA determines that emissions from the US are endangering public health or welfare in a foreign country, it may require SIP revisions sufficient to eliminate the endangerment – but only so long as there is “reciprocity”, i.e., the foreign country:
"has given the United States essentially the same rights with respect to the prevention or control of air pollution occurring in that country as is given that country by this section."
I love the idea. An economy-wide regime would be much more efficient. I wish that the argument made sense to me, but it does not.
The authors state that a global treaty could provide reciprocity, but then argue that “less binding commitments, including political commitments, should also suffice.” Thus, they conclude, the “Intended Nationally Determined Contributions”, or INDCs, which are the basis of the Paris Agreement, can provide reciprocity. Can you say “ipse dixit“?
They provide no precedent for this, because, as they acknowledge, § 115 has never been used. EPA started to use it once, and the authors provide two letters from then-Administrator Costle, suggesting that legally binding reciprocity is not required. However, EPA dropped the plan and the two letters were not finally agency action and were never subject to judicial review. Otherwise, the arguments simply seems to be that EPA can cloak itself in Chevron deference and that that is the end of the story.
Sorry, I don’t buy it. We’re talking about the law here. I think most judges would interpret the word “reciprocity” in a statute to mean something that is legally-binding; otherwise, it doesn’t mean anything. I don’t think it’s even a close enough question that Chevron deference will get EPA over the finish line.
The illogic of the authors’ argument seems to me to be demonstrated by their own words, when they argue reciprocity can’t mean a legally binding agreement, because that would mean that the foreign nations would be able to go to court to ensure that the US also meets its commitments under the Paris agreement, and the US would never allow that. But that’s precisely the point! Because there is no treaty, and the US would not let other nations try to enforce the US commitments under Paris, we cannot enforce theirs, and there is no reciprocity.
I wish it were otherwise.
Posted on January 7, 2016
The Paris Agreement on climate change reached on December 12, 2015 has a heavily negotiated sentence that, when closely read, seems to call for the virtual end of fossil fuel use in this century unless there are major advances in carbon sequestration or air capture technology. That, in turn, has important legal implications.
Article 4 Par. 1 says, “In order to achieve the long-term temperature goal … Parties aim to reach global peaking of greenhouse gas emissions as soon as possible … and to achieve rapid reductions thereafter in accordance with best available science, so as to achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century.”
In other words, what goes up should be taken back down: for every ton of greenhouse gases (GHGs) emitted from a smokestack, tailpipe or chopped tree, a ton should be removed.
According to the Intergovernmental Panel on Climate Change’s Fifth Assessment Report (2014), fossil fuel use emits about 32 gigatons of carbon dioxide per year. Other sources, such as methane leakage, cement manufacture, and other industrial processes add another 5-7 gigatons carbon dioxide equivalent. Deforestation and other agriculture, forestry and other land use changes (but subtracting emissions sequestered by forest growth) add yet another 10-12 gigatons a year. This all adds up to about 49 gigatons. However, global carbon sinks remove only about 18 gigatons per year (8.8 to the oceans, 9.2 to land, not including land use changes).
Thus the sinks take up about the equivalent of the non-fossil sources. In order to achieve a “balance” between emissions and sinks, we need to just about end the release of GHGs from fossil fuels, though a radical increase in sinks or reduction on non-fossil fuel emissions would provide some slack.
Assuming that some kind of balance between emissions and sinks can be achieved, would we actually have until 2099 to decarbonize the economy, as these numbers imply is needed? Not really. Kelly Levin, Jennifer Morgan and Jiawei Song at the World Resources Institute provide here an illuminating overview of what is required to achieve the long-term temperature goal in Article 2 of the Paris Agreement (“holding the increase in global average temperature to well below 2° C above pre-industrial levels and to pursue efforts to limit temperature increase to 1.5° C”). As the WRI post notes, a recent paper in Nature Climate Change suggests that carbon dioxide from electricity would have to be brought close to zero by 2050, and by then around 25 per cent of energy required for transportation would also need to come from electricity (up from less than one per cent now).
There seem to be only three ways to continue to use fossil fuels for electricity in the second half of the century (and for transport by the end of the century) and still meet the temperature goal:
- Capture the carbon before it escapes into the air, and sequester it
- Devise, and deploy on a massive scale, technologies to remove the carbon from the air, and sequester it
- Create new sinks, such as through the immediate halt to deforestation and a worldwide program of tree planting
All three of these raise a question of how long the carbon will be stored; we do not know how long carbon will stay in reservoirs, and we do know that trees do not live forever, and when they burn or die they release their carbon. Moreover, the technologies of carbon capture and sequestration, and of removing carbon from the ambient air, are developing slowly and are nowhere near large scale deployment. (A price on carbon would create an economic incentive to develop and use these technologies, but politicians in most places are unwilling to impose such a price. A large-scale government-funded research effort, such as the ones that put human beings on the moon, could also produce the necessary innovation, but there has been little visible support for such an effort.) Most of the industrial carbon sequestration that now occurs goes toward “enhanced oil recovery” – squeezing oil out of depleted reservoirs – but extracting more oil is not compatible with stopping fossil fuel use.
Finding the land for large scale tree planting would face its own challenges in a world where sea level rise, persistent drought, and extreme heat will be rendering much land unsuitable for growing food.
So meeting the demands of society for energy means a combination of aggressive energy efficiency and conservation programs, the installation of renewable energy (and, perhaps, nuclear), and the substitution of electric or hydrogen vehicles for those using petroleum at an unprecedented pace. The Deep Decarbonization Pathways Project has set forth the colossal amount of new facility construction that would be required worldwide to achieve this.
The Paris Agreement calls on all countries to strengthen their pledges to reduce GHG emissions, and to monitor their progress and report it to the world. It also says that “all parties should strive to formulate and communicate long-term low greenhouse gas emission development strategies.” (Article 4 Par. 19) That looks like strategies under which every country must show how it is controlling its fossil fuel use.
These provisions are not legally enforceable. However, many domestic laws are, and they will become a powerful tool to force early planning, or at least disclosures. One key example is the securities disclosure requirements for publicly traded companies. On January 27, 2010, the U.S. Securities and Exchange Commission issued guidance for the disclosure of climate-related risks. It specifically calls on companies to “consider, and disclose when material, the impact on their business of treaties or international accords relating to climate change.” The Paris Agreement is clearly such an accord, and (if it is vigorously implemented) it will have material impact on many companies in the business of extracting, processing and using fossil fuels, or making things that rely on fossil fuels (such as motor vehicles, ships and airplanes). The SEC’s guidance makes clear that management’s discussion and analysis should explore known trends and uncertainties concerning climate regulation. This includes regulation outside the U.S. that can affect the operations abroad of U.S. companies. Therefore, disclosure can be expected of the effect of severe restrictions here or in other countries on fossil fuel use, including the possibility that most fossil fuel reserves will need to stay in the ground.
Climate disclosures have received increased attention since it was reported in November that New York Attorney General Eric Schneiderman is investigating ExxonMobil under the New York securities law, the Martin Act, over its statements about climate change, and had reached a settlement with Peabody Energy.
This is not necessarily limited to U.S.-registered companies. For example, in April 2015 the G20 finance ministers and central bank governors asked the U.K. Financial Stability Board for advice on the financial stability implications of climate change. In November 2015 this Board proposed the establishment of a disclosure task force to develop voluntary disclosures for several climate-related risks, including “the financial risks which could result from the process of adjustment towards a low-carbon economy.”
Going forward, impact review of energy projects under the National Environmental Policy Act and its counterparts in many states and most other developed countries should consider the phase-out of fossil fuels that is inherent in the Paris Agreement. For example, a proposal to build or finance a coal mine, a coal-fired power plant, or a coal port should consider whether the facility would need to be closed before the end of its otherwise useful life, and whether the project would be inconsistent with the Agreement.
Systematic analysis and disclosure of these risks will lead responsible boards of directors to undertake serious planning to effect an orderly transition to the low-carbon world that 188 countries agreed to in Paris. These disclosures will also help investors decide what companies will thrive in such a world (such as developers of technologies for renewable energy and efficiency), and what companies are failing to prepare for the transition and thus will themselves become fossils.
Posted on January 5, 2016
The Paris Agreement resulting from the COP21 Climate Conference was extraordinary, far better than any of the pundit “experts” expected (indeed most were predicting gloom and doom until the very last minute). That the conference organizers could get 190 countries that had been quarreling with each other through 20 prior unsuccessful conferences, and many of which have little mutual respect, to come together to unanimously support an agreement of substance on a subject as complex, huge, costly and politically difficult as tackling climate change, is nothing less than a miracle.
Christiana Figuerez and the French negotiating team were brilliant in asking only that countries submit voluntary Independently Nationally Determine Contributions (INDCs) rather than a repeat of conference mandated so-called “binding” carbon reductions as required in the unsuccessful Kyoto Protocol, binding only on developed countries that ratified (and even then signatory Canada simply withdrew). Their pre-conference preparatory work and skillful conference conduct was critical to its success.
The momentum that was built up as virtually all the countries, large and small, rich and poor, made meaningful submissions was such that it would have been very difficult for any of one nation to spoil the broth.
Indeed, the momentum was so great that even previously very reluctant China, India, S. Africa and Brazil agreed to mandatory verification provisions, extremely important to the effectiveness of the Agreement.
That the INDCs were not sufficient to meet the IPCC scientists’ assessment of need to reduce global temperature increases to no more than below a 2.5 Celsius degrees above pre-industrial revolution levels was to be expected. But that the parties agreed to meet every 5 years to make further contribution pledges, again despite powerful country reluctance, was a vital success.
One little touted success was a provision to have the Agreement recognize the climate mitigation contributions of non-national organizations, states, provinces, cities, businesses and NGOs, a provision on which I and a group from Yale dubbed The Yale Dialogue, worked very hard to get included. Their inclusion is very important since many of them have already achieved much more than their national governments have been able to pledge. Perhaps most importantly, it is they that ordinarily are the key actors in establishing energy efficiency standards and often renewable energy incentives. The Paris Agreement doesn’t call for ratification until 2020, and progress before then will fall largely on their shoulders.
While the task before all the countries of the world to achieve the goals sought through the Agreement is daunting, the Paris Agreement has gotten the world off to a wonderfully good start.