airca m 04Schwebs

An Overview of What is Happening in
Congress, the States, and the Courts
Monica A. Schwebs
Bingham McCutchen
January 11, 2007
Overview of Presentation
Current Status of Federal Initiatives
Regional Initiatives
State-by-State Initiatives
Possible New Federal Legislation
I. Current Status of Federal Initiatives
1997 Byrd-Hagel Resolution opposing
ratification of Kyoto Protocol
2003 McCain-Lieberman GHG emissions
targets bill defeated
2005 Congressional GHG bills defeated
Current Federal laws
• GHG emissions - only mandatory
requirement is reporting of electric
utility CO2 emissions
• Federal laws that support reduction of
GHG emissions
• Energy efficiency standards
• Conservation and alternative fuel
• Technological development incentives
Photo Source: U.S. Congress
Executive Branch
• 2001 President repudiated Kyoto Protocol
• 2002 President called for voluntary action to
cut GHG intensity (the amount emitted per
unit of economic activity) by 18% by 2012,
leading to formation of voluntary programs
Climate Vision - Public-private partnership
initiative launched by DOE to focus on energyintensive industries
Climate Leaders - Voluntary EPA industrygovernment partnership that works with companies
to develop long-term comprehensive climate
change strategies; Partners set a corporate-wide
GHG reduction goal and inventory their emissions
2005 President formed Asia-Pacific Partnership
on Clean Development and Climate Change Includes Australia, China, India, Japan, Korea,
and the U.S. who together account for 50% of
GHG emissions
Photo Source: The White House
U.S. GHG Emission Trends
Source: Pew Center for Climate Change
What the American Public Thinks
Source: “Americans on Climate Change: 2005,”
Survey by Program on International Policy Attitudes, Univ. of Md.
Constitutional Obstacles for the States
• The Federal government
has authority over foreign
affairs and interstate
• Federal law is “the supreme
law of the land,”meaning it
preempts conflicting state
• States cannot enter into
interstate compacts without
the approval of Congress
The Signing of the Constitution
By Howard Chandler Christy
Photo Source: U.S. Senate
Regional Initiatives
Source: Pew Center on Global Climate Change
The West Coast
Western Governors’ Global Warming Initiative
• California, Washington, Oregon
• In 2003, the Governors announced they
would coordinate their states’ policies to
combat global warming
• Staff collaborated to produce a set of
recommendations on strategies that the
states can pursue cooperatively and
In Dec. 2006, PUC Commissioners from these
states and New Mexico entered into followon regional cooperation agreement
Image Source: California Energy Commission
The Southwest
Southwest Climate Change Initiative
• New Mexico and Arizona
• In 2006 the two states agreed to
collaborate through their
respective Climate Change
Advisory Groups
• The Governors also agreed to
advocate for regional and
national climate policies
Arizona and New Mexico both
released Climate Change Action
Plans in 2006
Governors of both Arizona and New
Mexico have issued Executive
Orders to implement the
recommendations in the Plans
Governor Napolitano, Arizona
Photo Source: Office of the Governor
Photo Source: U. of Arizona
Governor Richardson, New Mexico
Photo Source: Office of the Governor
Western Governors’
Clean and Diversified Energy Initiative
• Western Governors’ Association
covers 17 states
• In 2004, started initiative to get:
• 30,000 megawatts of new clean
and diverse energy generation by
• 20 percent increase in energy
efficiency by 2020
• Have been working together in task
• In June 2006 Governors approved
collective policy resolution that is
intended to enable the West to meet
the goals
Photo Source: City of Sedona, Arizona
Powering the Plains
• Participants from eight states
and one Canadian province
Photo Source:
California Energy Commission
• Public-private partnership of
state officials, industry
participants, agriculture
representatives and renewable
energy advocacy groups
working on energy and
agriculture initiatives that
address climate change
• Developing an integrated
energy strategy, policy
recommendations, and
demonstration projects
Source: Powering the Plains
New England States (and neighbors)
• Climate Change Action Plan of New
England Governors and Eastern
Canadian Premiers (2001)
• The Regional Greenhouse Gas
Initiative (“RGGI”) • 7 states plus MD shortly and
possibly MA
• MOU, 2005; Model Rule 2006;
implementation January 2009
• Will be first mandatory cap-andtrade system for CO2 in U.S
RGGI States
Image Source: RGGI
Cap-and-Trade Basics
Setting Up A Program
1. Set cap
2. Divide cap into
3. Distribute allowances
4. Sources report
5. Reconciliation
6. Penalties
Cost Minimization with Trading
Source: U.S. EPA
Regional Greenhouse Gas Initiative Basics
Important limitations - Only covers CO2 and power plants
Caps set to meet targets: 2009-2015 - stabilize CO2 emissions at
current levels; by 2019 - 10% reduction
Allocation of allowances
• Overall cap allocated among states
• Allocation process within each state has economic, equity, and
political ramifications
• All RGGI states have agreed to propose minimum of 25 % setaside for public benefit or strategic energy purposes
• For each type of power plant, states can take many factors into
account in deciding allowances - e.g. energy output, fuel input, fuel
source, historic emissions, early adoption, etc.
Distribution of allowances to be decided by States
• States can distribute at no cost
• States can sell through direct sale or auction - e.g. NY and
Vermont propose to use 100% auction
• Offsets permissible:
• Examples: energy efficiency, landfill and agricultural methane
reduction, sequestration through reforestation, reduction in
sulfur hexafluoride emissions
• Are used as “safety valve” - allowance price will determine
extent to which can be used
• Linkages: system could be linked to states outside region
• Offsets can be from anywhere in U.S. w/agreement of state
• Whole system can be linked with other states
• Problems?
• Economic impact - $3 -$16 per household in 2015, but overall
savings if take into account efficiency gains
• Leakage - i.e. What should be done about imports of out-ofregion power that is not subject to RGGI caps?
• Constitutionality?
III. State-by-State-Initiatives
• Climate Action Plans
• Climate Action Advisory Groups
• Greenhouse Gas Inventories
• Greenhouse Gas Registries and Reporting
• Emission Caps
• Power Plant Limits
States with Climate Action Plans
Source: Pew Center on Global Climate Change
States with Active Climate Legislative
Commissions and Executive Branch
Advisory Groups
Source: Pew Center on Global Climate Change
States with Greenhouse Gas Inventories
Source: Pew Center on Global Climate Change
States with GHG Reporting & Registries
Source: Pew Center on Global Climate Change
States with Greenhouse Gas Emission Targets
Source: Pew Center on Global Climate Change
Comparison of Selected
Emission Targets
Target by 2010
Target by 2020
2000 levels
1990 levels
1990 levels
10% below 1990
5% below 1990
10% below 1990
Note: Kyoto target is 7% from 1990 levels by 2012
States with a Carbon Cap or Offset
Requirement for Power Plants
Source: Pew Center on Global Climate Change
Cities and Other Local Governments
U.S. Mayor’s Climate
Protection Agreement – over
330 U.S. mayors have
committed to strive meet Kyoto
Protocol targets for U.S.
U.S. Conference of Mayors
endorsed U.S. Mayor’s Climate
Protection Agreement in June
2006 and urged all to join
More than 185 local
government members
participate in ICLEI’ s Cities for
Climate Protection program
Seattle, WA
Photo Source: ICLEI, Local Governments for Sustainability
IV. Litigation
A. Types of Cases
1. Clean Air Act
2. NEPA/CEQA Litigation
3. Nuisance Litigation
4. Preemption Litigation
5. Other Litigation
Photo Source: Courts of Minnesota
Clean Air Act Litigation
Massachusetts v. EPA
Pending in U.S. Supreme Court
Challenge by 12 states and others to
EPA decision not to regulate GHGs
as “air pollutants” from motor
Do plaintiffs have standing?
Does EPA have legal authority to
regulate GHGs?
If EPA has legal authority, what is
the scope of EPA’s discretion to
decide not to regulate GHGs?
Photo Source: U.S. Supreme Court
Massachusetts v. EPA - Standing to Sue
Standing is often challenged in GHG cases
Stems from Constitutional requirement that courts
hear only actual “cases and controversies”
Plaintiffs must how:
(1) particularized injury;
(2) causation by defendant’s actions; and
(3) relief will redress the plaintiff’s injury
In Massachusetts v. EPA, will Court find plaintiffs
have standing?
Massachusetts v. EPA
Selected Relevant CAA Provisions
§ 302(g): “The term ‘air pollutant’ means any air pollution agent or combination of
such agents, including any physical, chemical, biological, radioactive (including
source material, special nuclear material, and by product material) substance
or matter which is emitted into or otherwise enters the ambient air.”
§ 202(a): “[EPA] shall by regulation prescribe (and from time to time revise) in
accordance with the provisions of this section, standards applicable to the
emission of any pollutants from any class or classes of new motor vehicles or
new motor vehicle engines, which in [its] judgment cause, or contribute to, air
pollution which may reasonably be anticipated to endanger public health or
§ 302(h): “All language referring to effects on welfare includes, but is not limited to,
effects on soils, water, crops, vegetation, manmade materials, animals, wildlife,
weather, visibility and climate, damage to and deterioration of property, and
hazards to transportation, as well as on economic values and on personal
comfort and well-being, whether caused by transformation, conversion, or
combination with other air pollutants.”
1. Clean Air Act Litigation (cont.)
• Coke Oven Environmental Task Force v. EPA - pending in D.C.
• Challenge by 10 states and others to EPA failure to take into
account GHG emissions in setting New Source Performance
Standards for certain power plants
• Stayed pending decision by U.S. Supreme Ct. in Massachusetts v.
• Northwest Environmental Defense Ctr. v. Owens Corning, D.
Or. 2006
• Challenge to failure to obtain PSD permit for facility that would
emit hydrochloroflurocarbon, which is both ozone-depleting and a
greenhouse gas
• Court granted standing, in part, because plant would increase
GHG emissions and cause injury to plaintiffs
2. NEPA/CEQA Litigation
NEPA decisions holding climate change has to be taken into
Border Power Plant Working Group v. Department of Energy - S.D. CA
Mid States Coalition for Progress v. Surface Transportation Board - 8th Cir.
2003 (second round regarding sufficiency of SEIS - Maho Foundation v.
Surface Transportation Board, pending 8th Cir.)
Pending NEPA Cases
Center for Biological Diversity v. National Highway Traffic Safety Admin. pending in 9th Cir.
• Challenge by 10 states and others to failure to prepare EIS for new Corporate
Average Fuel Economy (“CAFE”) standards for light trucks in order to assess
global warming implications
Friends of the Earth v. Mosbacher - pending in N.D. CA
• In 2005 court granted standing to plaintiffs to argue that NEPA requires the
Export-Import Bank and Overseas Private Investment Corporation, that provide
financial assistance for energy projects abroad, to assess the global warming
implications of their actions
Pending CEQA Cases
• Natural Resources Defense Council v. Reclamation Board - pending in
Sacramento Superior Ct.
• Challenge by several environmental groups to approval of development plan for
island in San Joaquin Delta. Plaintiffs allege EIR is inadequate because it
assesses the Project’s impact on Delta in its current condition without
considering the impact of global warming on the Delta ecosystem in the future
• Center for Biological Diversity v. City of Banning - pending in Riverside
Superior Court
• Challenge to City approval of new housing development remote from City core
on the basis of EIR that does not address impact on global warming
What should you tell your clients about NEPA/CEQA review and
climate change?
The Judges of the California Supreme Court
Photo Source: CA Supreme Court
Nuisance Litigation
• Connecticut v. American Electric Power - appeal pending, 2nd Cir.
• Suit brought by 8 states and others against 5 largest emitters of CO2 in
the country - all of which are electric utilities
• Suit alleges nuisance and requests abatement order
• District Court dismissed invoking the “political question” doctrine which
authorizes courts to decline to decide cases best resolved by the
political branches; appeal pending
• California v. General Motors - pending N.D. CA
• New suit by California Attorney General against 6 manufacturers of
motor vehicles contributing to global warming
• Suit alleges nuisance and seeks damages
• Class Actions? E.g. class action suit filed against oil and coal industry in
S.D. Mississippi
4. Preemption Litigation
Automobile Cases
Central Valley Chrysler-Jeep v. Witherspoon - pending E.D. CA
• Auto industry challenge to California “Pavley” legislation which requires CARB to
regulate GHG emissions from motor vehicles - Now adopted by 10 other states
• Case going forward on three preemption claims:
Under EPCA - federal government sets CAFE standards
Under CAA - CA required to get waiver for “standard related to control of emissions”
(and EPA has not waived);
Under Constitution - federal government controls foreign policy
Green Mountain Chrysler-Plymouth-Dodge v. Torti - pending D. Vt.
Lincoln Dodge, Inc. v. Sullivan - pending D. R.I.
CA Power Plant GHG Performance Standard Cases
SB 1368 requires CPUC, CEC to set GHG performance standard for
electric utility purchases
Constitutional claims have been raised - e.g. interference with interstate
commerce and foreign policy
5. Other Litigation
Endangered Species Act •
Center for Biological Diversity v.
Gale Norton, pending N.D. CA led to recent proposed listing of
polar bear as endangered
species due to impact of global
climate change (Dec. 2006)
Polar Bears
Photo Source: USFWS
In response to petition, NMFS
listed elkhorn and staghorn
coral as endangered in part
because of high atmospheric
CO2 levels (May 2006)
Elkhorn Coral
Photo Source: NOAA
5. Other Litigation (cont.)
• Center for Biological Diversity v. Brennan, pending N.D. CA
• New suit alleges that federal government has missed
mandatory deadline for issuance of updated national
assessment of climate change impacts
• Energy facilities
• Environmental licensing proceedings - e.g. power plants,
refineries, LNG terminals
• Utility procurement prudence proceedings - esp. purchase
of electricity produced from coal
V. Possible New Federal Legislation
• Selected Congressional
Climate Change
Legislation to Date
• GHG Regulatory
Issues Before
• Other Climate Change
Agenda Items
Photo Source: Public Broadcasting System
Selected Congressional Legislation to Date
Senate - McCain-Lieberman
• Climate Stewardship Act - 2003
• Would have used cap-and-trade mechanism to get to target of
2000 levels by 2010 and 1990 levels by 2020
• Would have regulated six GHGs and included electricity,
transportation, industry and commercial sectors
• Would have allowed for 15% to be met through offsets
• In 2003, floor vote failed 43-55
• Climate Stewardship and Innovation Act - 2005
• Similar, but added incentives for low carbon technologies,
including nuclear power
• In 2005, floor vote failed 38-60
Senate - Bingaman Proposal and Resolution
Proposal - Draft “Climate and Economy Insurance Act” - 2005
• Product of bipartisan National Commission on Energy Policy
• Featured an emissions intensity reduction goal of 2.4% per year
from 2010 to 2019 that would be translated into annual caps
• Provided for pollution credit trading with a safety valve cost cap
• Did not have enough votes to be attached to Energy Policy Act of
Resolution - 2005
• Non-binding sense of the Senate resolution
• Calls for mandatory action to slow, stop, and reverse GHG
emissions without harming the economy and for encouraging
action by other nations that are trading partners
• Passed Senate in 2005 by vote of 53-44
GHG Regulatory Issues before Congress
1. Who will be regulated and where?
Sectoral v. economy-wide approaches
Upstream v. downstream
Greenhouse Gas Emissions Flow, 2004
(million metric tons of carbon-dioxide equivalent)
GHG Regulatory Issues Before Congress (cont.)
Cost Distribution: Should the costs of regulation be mitigated for
any sector of the economy, through the allocation of allowances
without cost? Or, should allowances be distributed by means of an
auction? If allowances are allocated, what is the criteria for and
method of such allocation?
Technology R&D and incentives
Adaptation assistance
Consumer protection
Set-asides for early movers
Special considerations for fossil-fuel producers
Allocations for downstream electric generators
Allocations for energy-intensive industries
GHG Regulatory Issues Before Congress (cont.)
3. International Trading? Should a U.S. system be designed to
eventually allow for trading with other greenhouse gas capand-trade systems being put in place around the world?
4. International collective action? How should the U.S.
encourage comparable action by other nations that are major
trading partners and key contributors to global emissions?
How long will it take to resolve these difficult issues?
Other Climate Action Agenda Items
• Invest in science and technology research
• Drive the energy system toward greater efficiency, lower-carbon fuels
and carbon capture technologies
Energy Efficiency - Production, distribution, and usage
Lower Carbon Fuels - Natural gas, renewables, and nuclear
Coal - Advanced generation coal plants, separation and capture, and carbon
• Stimulate innovation across key economic sectors
Transportation: Change CAFE program and support low-GHG fuel alternatives
Manufacturing: Improve industrial efficiency and low-GHG technologies
Agriculture: Raise the priority and funding levels on carbon sequestration
• Begin now to adapt to the consequences of climate change
• Negotiate to strengthen the international climate effort
• The States have done a great deal to
address global warming
• To the extent to which the States’
efforts run up against Constitutional
limits to thinking globally, acting
locally, the federal government must
become engaged
• In the next few years we will be
making, as a nation, the difficult
choices required of us to address
global warming
• Questions? Contact me at
[email protected]
Picture Source: BLM