March 1, 2011
 On March 1, 2011, the Environmental Protection Agency (“EPA”) announced its plans to postpone the upcoming deadline for mandatory reporting of greenhouse gas (“GHG”) emissions, which is currently scheduled for the end of this month. EPA has not set a revised deadline, though the agency reported that it “is in the process of finalizing a user friendly online electronic reporting platform,” which it plans to unveil this summer.
EPA’s GHG Reporting Program arose out of a provision in the Consolidated Appropriations Act of 2008, requiring “mandatory reporting of greenhouse gas emissions above appropriate thresholds in all sectors of the economy of the United States.” EPA first proposed reporting requirements in March 2009 and finalized its initial regulations six months later, on October 30, 2009. Since then, the agency has issued a series of regulations expanding and clarifying the scope of reporting for various industries and activities, such as the mandatory disclosure of reporting facilities’ co-generation power units.
The GHG Reporting Program primarily covers GHG-emitting facilities, fossil fuel suppliers, and industrial gas suppliers whose aggregate GHG emissions exceed 25,000 metric tons carbon-dioxide equivalent (CO2e) per year, though facilities in certain emissions intensive source categories (e.g., cement manufacturing and petroleum refining) are universally covered. EPA has projected that the rule would cover approximately 10,000 sources, which are collectively responsible for 85-90 percent of total U.S. GHG emissions.
Covered facilities were required to begin monitoring their GHG emissions on January 1, 2010, and the deadline for their first annual reports was set to be March 31, 2011. EPA plans to make much of the data it collects publicly available, and the reported information is expected to inform recent and forthcoming efforts to regulate stationary source GHG emissions under the Clean Air Act. Earlier this year, EPA began phasing in the first GHG permitting requirements for certain new and modified major stationary sources, and the agency is legally obligated to propose GHG New Source Performance Standards (“NSPS”) for power plants by July 26, 2011.
EPA still plans to publish data submitted under the GHG Reporting Program “later this year,” though it is not clear when facilities will have to report their 2010 emissions. Instead, the agency promised to provide additional information on its deadline changes over the coming weeks.
EPA’s recent announcement comes on the heels of a Congressional vote which cast further uncertainty over the future of the agency’s suite of GHG regulations. On February 18, 2011, the House of Representatives passed a seven-month budget “continuing resolution” that would largely de-fund EPA’s GHG reporting registry and prevent EPA from spending any funds to implement its stationary source GHG regulations. The Senate has not taken up that bill, however, and the House has since passed a two week stop-gap resolution without the GHG provisions.
For more information on EPA’s GHG Reporting Rule and other climate-related initiatives, contact Jeffrey Gracer.
December 13, 2010
EPA can enforce its climate change regulations while litigation challenging those regulations is pending, a federal appeals court ruled last Friday. The denial of a motion to stay the implementation of EPA’s rules removed one of the final barriers to implementation of the Agency’s first-ever stationary source greenhouse gas (“GHG”) limits, which are scheduled to begin phasing in on January 2, 2011.
In the motion for a stay, coalitions of industry, state, and other challengers argued that the climate rules were unlawful and would cause irreparable injury if not enjoined. Without addressing the merits of the regulations themselves, the D.C. Circuit Court of Appeals found that the challengers had not shown that “certain” harm would “directly result” from the rules’ implementation, as required for a stay.
This ruling means that EPA’s rules are likely to take effect as scheduled, as legislation that would delay or freeze funding for EPA’s stationary source GHG regulations is not expected to pass before Congress adjourns this month. The incoming Congress may take up similar legislation next year, either as a stand-alone measure or an amendment to a spending bill. In the meantime, EPA is in the process of finalizing rules to ensure that its forthcoming stationary source GHG controls only affect certain new and modified facilities emitting at least 75,000 tons of GHGs annually. These implementing rules are currently being reviewed by the White House Office of Management and Budget, and are scheduled to take effect before EPA’s January 2 regulatory deadline.
The suits against EPA’s suite of greenhouse gas regulations will be heard by a single three-judge panel on the D.C. Circuit, with briefing scheduled to begin next year. While that litigation is pending, the Supreme Court will hear arguments on whether EPA’s challenged climate rules displace federal common law remedies aimed at addressing global warming.
For more information on climate-related litigation and regulations, contact Jeffrey Gracer.
December 6, 2010
On December 6, the Supreme Court granted review of the climate tort suit Connecticut v. American Electric Power (“AEP”), setting the stage for a major decision on the availability of common law remedies for climate-related harms.
Justice Sonia Sotomayor, who presided over oral arguments in the case while a judge on the Second Circuit, did not participate in the Supreme Court’s consideration of the petition for review. Justice Sotomayor is expected to recuse herself when the case comes before the Court.
The case arises out of a 2004 suit filed by eight states (including New York), three land trusts and New York City against five electric utilities and one of their subsidiaries, alleged to be the “five largest emitters of carbon dioxide in the United States.” The plaintiffs claimed that the power companies’ greenhouse gas (GHG) emissions constituted a public nuisance under federal common law and the common law of 20 states where the defendants operated power plants, and sought an injunction requiring “each defendant to … cap its carbon dioxide emissions and then reduce them by a specified percentage each year ….”
In 2005, United States District Judge Loretta A. Preska dismissed the suit under the political question doctrine, reasoning that the policy determinations required to set and implement a GHG emissions cap were of the type reserved for Congress and the President. Connecticut v. Am. Elec. Power Co., 406 F. Supp. 2d 265, 272 (S.D.N.Y. 2005), vacated and remanded 582 F.3d 309 (2d Cir. 2009). In a footnote, the Court withheld judgment on whether the plaintiffs would have been able to establish standing to bring their suit. Id. at 271, n. 6.
The Second Circuit heard an appeal from the dismissal order in 2006, with then-Circuit Court Sotomayor sitting on the three-judge panel. Following a three-year delay and Sotomayor’s nomination to the Supreme Court, the remaining two judges reversed the District Court and remanded the case for further consideration, ruling that: (a) the suit was not barred by the political question doctrine, (b) the plaintiffs had standing to litigate the dispute, and (c) the common law claims had been not been displaced by EPA’s then-unfinalized proposals to regulate GHGs under the Clean Air Act. Connecticut v. Am. Elec. Power Co., 582 F.3d 309 (2d Cir. 2009).
The defendants petitioned for Supreme Court review of the Second Circuit decision last August. In a move that took many by surprise, the Obama Administration filed a brief in support of the utilities’ petition, arguing that the plaintiffs lacked “prudential standing” and that the finalization of the EPA climate regulations which were pending at the time of the Second Circuit decision had displaced the federal common law relief sought by the states.
The Supreme Court’s decision could set key precedent for other pending climate tort suits and for environmental litigation more broadly. The standing doctrine – which requires litigants to establish a particularized injury caused by the opposing party and redressable by judicial action – is often highly contested in environmental cases, especially those involving harms like global warming which have broad impacts and multiple causes. While the Supreme Court found that a similar set of state plaintiffs met the constitution’s standing requirements in its 2007 climate change decision Massachusetts v. EPA, a rejection of the current suit on “prudential standing” grounds could give lower courts broad discretion to dismiss pending and future climate litigation. If Justice Sotomayor recuses herself, the Court may end up deadlocked between the four Massachusetts v. EPA dissenters and the four remaining justices, a split which would leave the Second Circuit decision on the books but would not set binding precedent for other courts.
The Supreme Court could also conclude that EPA climate regulations finalized since the Second Circuit decision have displaced the common law remedies sought by the plaintiffs. Many of those regulations are currently facing their own legal challenges, however, creating the possibility that the rules central to this displacement argument could themselves be overturned.
Oral arguments and a decision in the Connecticut v. AEP case are expected over the coming year. For more information on pending global warming litigation and EPA’s climate rules, please contact Jeffrey Gracer.
November 24, 2010
Earlier this month, the New York State Sea Level Rise Task Force (“Task Force”) released a draft report assessing the climate-related threat to coastal communities and recommending a series of policy changes (“Draft Report”). The state legislature commissioned the Task Force in 2007, bringing together state agency representatives, county and local government officials, and other public and private stakeholders to “protect[] New York’s remaining coastal ecosystems and natural habitats, and increas[e] coastal community resilience in the face of sea level rise.” The Draft Report is open for public comment until Dec. 12, 2010, and is scheduled to be finalized by Jan. 1, 2011.
The Draft Report contains nine findings concerning the projected impacts of sea level rise and 14 policy recommendations for state legislators and executive agencies to prepare for and protect against those risks. This post focuses on the recommendations related to the State Environmental Quality Review Act (“SEQRA”), the New York law requiring state and local governments to consider the potential significant adverse environmental impacts of their actions.
The SEQRA recommendations primarily relate to actions undertaken within newly-proposed “coastal risk management zones,” which would require an amendment to SEQRA or its implementing regulations. The Task Force suggests that such zones should be established and include those areas that FEMA has already identified as “coastal high hazard areas” or “areas of moderate wave action” on Flood Insurance Rate Maps (Draft Report, at 54).
SEQRA regulations currently categorize actions as Type I (those that presumptively have significant adverse impacts and are more likely to require preparation of a full Environmental Impact Statement), Type II (those determined not to have significant adverse impact or otherwise precluded from SEQRA review) and Unlisted. Under one proposal, the Task Force recommends that all Unlisted Actions undertaken within a coastal risk management zone be added to the Type I list (Draft Report at 61). Alternatively, the Draft Report suggests amending the criteria for environmental significance in the SEQRA regulations to expressly incorporate sea-level rise related impacts (Draft Report at 61; 6 NYCRR 617.7(c)).
Neither of these recommendations, however, addresses the technical issues of how the environmental significance of sea level rise on a proposed project should be measured. Moreover, the classification of all actions occurring within a coastal risk management zone as Type 1 may be inconsistent with existing SEQRA guidance which anticipates that the significance of sea level rise and other global warming impacts on a project would be assessed “on a case-by-case basis” — with no bright line test imposed based on project location.[1] This recommendation could also sweep in minor discretionary actions, such as wetland permits for single lots, that are not the type or scale of government action typically considered Type I.
Finally, the Task Force makes a commonsense recommendation that DEC’s short and long Environmental Assessment Forms (“EAF”) – used to determine the potential significance of an action’s environmental impacts – be revised to “require[e] an evaluation of risks to and from the project based on the risk of sea level rise and coastal hazards … and other related effects of sea level rise” (Draft Report at 61). The long EAF currently asks, “Is [the proposed] project or any portion of project located in a 100 year flood plain,” though sea level rise is projected to expand the areas of New York traditionally considered at risk of serious flooding.
For additional information on the consideration of climate-related impacts under SEQRA or the National Environmental Policy Act (“NEPA”), contact Steven Russo.
[1] DEC, Assessing Energy Use and Greenhouse Gas Emissions in Environmental Impact Statements, July 15, 2009, at 4, 5.
November 12, 2010
In anticipation of new greenhouse gas (“GHG”) restrictions set to take effect on January 2, 2011, the Environmental Protection Agency (“EPA”) released guidance on the GHG permitting determinations for new and modified power plants, industrial facilities, and other stationary sources.
The guidance is directed at regulated entities and state agencies, which have been delegated authority to implement the permitting provisions of the Clean Air Act. Next year, New York and most other states will begin to phase in GHG regulations for certain new and modified stationary sources. The EPA plans to take over GHG permitting in those states that refuse to adopt the GHG rules or are not prepared to do so.
A “tailoring” regulation finalized by EPA last June raised the emissions threshold for the new GHG limits. From January 2 through June 30, 2011, the regulations only cover stationary sources whose construction or modification would increase annual GHG emissions by at least 75,000 tons of carbon-dioxide equivalent and would also trigger the Clean Air Act’s Prevention of Significant Deterioration provisions for other pollutants. Starting in July, construction or modification that increases annual GHG emissions by at least 100,000 tons of carbon-dioxide equivalent could also trigger GHG control requirements.
EPA’s new guidance adopts a flexible interpretation of the “best available control technology” requirements for GHGs. While supporting the consideration of add-on technologies like carbon capture and sequestration systems, the agency acknowledges that such technologies present “significant logistical hurdles” that may render them inappropriate at the present time (GHG Guidance, p. 38). Control technologies are also most commonly selected based on the permit applicant’s primary purpose or objective, so the Clean Air Act would typically not require an applicant for a coal-fired power plant to switch to a less carbon-intensive fuel (e.g. natural gas or renewable energy) (id. at 29).
Instead, sources that trigger the GHG permitting requirements are more likely to be required to implement energy efficiency improvements, which are promoted throughout EPA’s guidance. For instance, EPA notes that “an applicant proposing to build a new facility that will generate its own energy with a boiler could also consider ways to optimize the thermal efficiency of a new heat exchanger that uses the steam from the new boiler” (id. at 32). Other options for GHG reductions include the use of certain types of biomass or implementation of a source-wide Environmental Management System.
The new guidance may impact sources not directly covered by the new GHG controls. With respect to permitting decisions for other pollutants, EPA instructs applicants and authorities to “consider how the control strategies under consideration may affect GHG emissions,” and certain control technologies may be rejected in part based on their projected contribution to climate change (id. at 42).
As implementation of its GHG regulations draws closer, however, EPA’s efforts are facing serious legal and legislative challenges. Suits pending in the D.C. Circuit seek to overturn several EPA rules regulating GHGs under the Clean Air Act, including the tailoring rule. In the Senate, meanwhile, a legislative proposal would delay EPA’s stationary source regulations for another two years.
September 22, 2010
With the U.S. Senate unlikely to take up global warming legislation before the mid-term elections, national attention is shifting back to the states, where efforts to curb greenhouse gas (“GHG”) emissions are already underway. States and regional partnerships were some of the earliest architects of domestic climate programs, prodding the federal government and offering a model for national policy. Today, however, many of these state programs are facing new threats of their own.
As described in a September 16 New York Times article, a proposal on the ballot in California this November would suspend implementation of the state’s 2006 Global Warming Act (“AB 32”), which requires the reduction of state-wide GHG emissions to 1990 levels by 2020. In 2008, California outlined a series of policies that would achieve that goal – including existing vehicle greenhouse gas controls, a strengthened renewable electricity mandate and a new cap-and-trade program. But the pending ballot initiative (“Proposition 23”) would suspend the climate law until California’s unemployment rate falls to or below 5.5% for four consecutive quarters, a far cry from the state’s current rate of over 12% unemployment.
The suspension of AB32 could threaten the progress of the Western Climate Initiative (“WCI”), collaboration between seven Western states and four Canadian provinces to reduce their collective greenhouse gas emissions to 15 percent below 2005 levels by 2020. While WCI members planned to launch a regional GHG trading program by 2012, its success rests heavily on California; a recent analysis from Barclays PLC warned that the regional program’s future “will fully depend on the outcome of … Proposition 23.” Over the last year, two members of the WCI (Utah and Arizona) have announced their plans not to participate in the trading scheme.
The New York State Assembly has twice passed a bill to cap and reduce statewide GHG emissions, though the State Senate has yet to take up the legislation. New York remains an active participant in the Regional Greenhouse Gas Initiative (“RGGI”), which recently celebrated its second anniversary with its ninth auction of GHG emissions allowances. A fully functional carbon dioxide trading program covering power plants in 10 Northeastern and Mid-Atlantic states, RGGI has been held up as a model for national legislation, and market monitors have praised its “fair and transparent” auction process.
RGGI’s latest clearing price for a ton of carbon dioxide was just $1.76, however, roughly 1/10 of the price of GHG permits in European trading. The low price is due to a combination of lower than expected energy demand and RGGI’s modest emissions reduction targets. Moreover, in response to growing budget deficits, New York and New Jersey both diverted RGGI auction proceeds that had been earmarked for clean energy projects to fund general budgetary purposes.
While RGGI moves forward, supporters and opponents of global warming legislation are looking to the California ballot initiative as a bellwether for state climate programs nationwide, and perhaps federal policy as well.
August 26, 2010
In a significant and surprising development, on August 24 the Solicitor General of the United States filed a brief in the Supreme Court asserting that a groundbreaking climate change decision by the Second Circuit Court of Appeals should be vacated and remanded for further consideration.
The brief, submitted on behalf of the Tennessee Valley Authority (“TVA”), a defendant in the Second Circuit case, Connecticut v. American Electric Power Co., 582 F.3d 309 (2d Cir. 2009), forcefully asserts that:
- as a matter of judicial self-restraint (under non-constitutional prudential standing doctrine), federal courts should decline to hear cases alleging that global warming creates a common law nuisance because “courts – when no statute is in place to provide guidance – are simply not well-suited to balance the various interests of, and the burdens to be borne by, the many entities, groups and sectors of the economy that, although not parties to the litigation, would be affected by a grievance that spans the globe,” and
- the predicate for the Second Circuit’s decision, that common law nuisance claims had not been displaced by EPA action, is “no longer true” because “EPA has now taken final action that, as of January 2, 2011, makes carbon dioxide subject to regulation under the [Clean Air] Act.”
In his brief, the Solicitor General requests that the Supreme Court grant the writ of certiorari, vacate the judgment of the Second Circuit, and remand the case for further proceedings to consider these issues.
The Solicitor General’s brief parts ways to a certain extent from arguments advanced by power companies in their petition for Supreme Court review, but nonetheless forcefully advances a number of arguments against using common law nuisance actions to reduce greenhouse gas emissions through case-by-case adjudication. The brief will likely take many in the climate law community by surprise, because the federal government has been perceived recently as an advocate for stronger climate regulation, and the threat of nuisance litigation may help spur legislative and/or regulatory action. One advocate reacted to the filing by stating that he felt like he’d been stabbed in the back. Some of the more powerful statements in the Solicitor General’s brief include:
- The medium that transmits injury to potential plaintiffs is literally the Earth’s atmosphere – making it impossible to consider the sort of focused and more geographically limited effects characteristic of traditional nuisance suits targeted at particular nearby sources of water or air pollution.
- Courts should not “sit as arbiters of scientific and technology-related disputes” and as “de facto regulators of power plants and other sources of pollution.”
- Public nuisance cases involving climate change are ill-suited to judicial resolution because they “present a unique confluence of a vast category of potential plaintiffs who may sue any among a vast category of potential defendants by alleging that their actions affected the entire Earth.”
The state, municipal and land trust plaintiffs can be expected to mount significant arguments against Supreme Court review and in favor of the Second Circuit’s decision. We will provide an update after those filings have been lodged.
- A copy of the brief may be accessed here (pdf)
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