Climate Change

The SEC and Climate Change

The U.S. Securities and Exchange Commission issued interpretive guidance on Wednesday, January 27, to require publicly traded companies to disclose the impact on the company's business of climate change or legal developments related to climate change.  The interpretive guidance is not itself a rule, but rather the Commission's official interpretation of existing disclosure regulations.  (See http://www.sec.gov/news/press/2010/2010-15.htm for the Commission's statement on the interpretive guidance.)

The Intersection of Science and Politics

To the average person, “science” is synonymous with “truth.” To the scientist, however, science is a process of searching for truth.  A scientist will be the first to admit that behind every “scientific fact” there lies more subtlety, more complexity, more elegance and more search for truth.  Even the most well-settled scientific principle is subject to new findings.  One only needs to look at the effect of Einstein’s theory of special relativity on Newtonian physics.  Scientists are also human beings, however, subject to human passions and imperfections.  It is difficult for a scientist to be truly dispassionate about what she/he believes to be the “best science,” and thus will often exhibit the very human propensity to ignore, trivialize or demonize a viewpoint that is different, especially when huge amounts of money, high professional standings, and large egos are at stake.

Appeals Court Reinstates Climate Change Injury Claims

On September 21, 2009, the U.S. Court of Appeals for the Second Circuit handed down a decision reversing a lower court's dismissal of claims brought against several major electric utilities seeking to abate CO2 emissions from power plants owned by the utilities because of alleged injuries from global warming.  State of Connecticut v. American Electric Power Company Inc., 2009 WL 2996729 (2d Cir. Sept. 21, 2009). The case was brought by several states, New York City, and three non-profit conservation organizations.  In 2005, a lower court dismissed the complaints on the basis that the claims were not "justiciable," i.e., that they were not within the province of the judiciary to resolve, but rather were political questions best left to the legislative and executive branches.  Connecticut v. Am. Elec. Power Co., 406 F. Supp.2d 265 (S.D.N.Y. 2005).

EPA Releases Proposed Endangerment Finding on Emission of Greenhouse Gases

EPA released today its much-anticipated proposed endangerment finding for greenhouse gas (“GHG”) emissions from new motor vehicles and engines in response to the U.S. Supreme Court’s April 2, 2007, decision in Massachusetts v. EPA. The proposed finding is issued under Section 202(a)(1) of the Clean Air Act, which requires EPA to determine whether emissions from new vehicles and new vehicle engines “cause or contribute, to air pollution which may reasonably be anticipated to endanger public health or welfare.” In the proposal EPA broadly defines Section 202(a)(1) to mean that the endangerment determination may include an assessment of current and future risks rather than being limited to proof of actual harm.

EPA Publishes Proposed Mandatory Greenhouse Gas Reporting Rule

EPA published today a 285-page proposed rule to require reporting of greenhouse gases (“GHGs”) from all sectors of the economy. The proposed rule will require reporting of GHG emissions from sources representing approximately 85 to 90 percent of the greenhouse gas emissions in the United States. The GHGs covered by the proposed rule are carbon dioxide, methane, nitrous oxides, sulfur hexafluoride, hydrofluorocarbons, perfluorocarbons and certain other fluorinated compounds. The proposed rules are required by the 2008 Consolidated Appropriations Act, signed by President Bush on December 7, 2007.

University of Utah Appoints James Holtkamp to the Board of Institute for Secure and Clean Energy

The University of Utah appointed Holland & Hart attorney James Holtkamp to the Advisory Board for Institute for Secure and Clean Energy. As a member of the Advisory Board, Holtkamp will help guide the ISCE and make suggestions on how best to integrate the results of ISCE activities with efforts in industry, government, national laboratories, and other educational institutions.

Greenhouse Gas Reporting Rules Proposed by EPA

On March 10, 2009, EPA released its long-awaited proposed rule requiring reporting of greenhouse gas (“GHG”) emissions from sources representing approximately 85 to 90 percent of the greenhouse gas emissions in the United States. The proposed rule was, required by the 2008 Consolidated Appropriations Act, signed by President Bush on December 7, 2007. The Act requires EPA to promulgate within 18 months “a final rule . . . to require mandatory reporting of GHG emissions above appropriate thresholds in all sectors of the economy of the United States.” The statute required a proposed rule within nine months, or September 7, 2008, a deadline which EPA obviously missed. The statutory deadline for the final rule is June 7, 2009.

CO2 Controls for Power Plants Now? A Good Idea?

As you may know, one of the immediate issues being discussed and litigated in the area of climate change is the imposition of CO2 controls on the Desert Rock power plant in New Mexico simply by interpreting the existing Clean Air Act to include CO2 as a PSD “regulated pollutant”.  For those of you who may be dealing with this issue now or in the future, I suggest a few considerations. 

First, while increasing the cost of gasoline may be good for the development of renewable energy sources and alternatives like the electric car to power the transportation system, roughly doubling the cost of new electricity by imposing carbon emission controls or carbon capture and sequestration may not be such a good idea right now.  In my view, there are two important considerations.  The first is how much benefit CO2 controls imposed now will have.  Using IPCC models (from one of the IPCC foremost modelers) and data, even full compliance with the Kyoto protocol and then continuing to maintain those reduced, 1990 levels of CO2 over the next 100 years would only lower the temperature increase by 0.1 degree Fahrenheit ("F") by 2050, and by 0.3 degrees F by 2100, out of a total 4.7 degrees F (the IPCC's "standard" predicted increase in temperature by the year 2100). 

The Colorado Carbon Fund - Project C

By Tasha Newland

Project C, or the Colorado Carbon Fund, is a voluntary carbon offset program developed by the Colorado Governor’s Energy Office (“GEO”). Project C was initiated by the GEO in August 2008 and offers high quality, verified carbon offsets to individuals, businesses and government agencies interested in mitigating their carbon footprint as a way to support new energy efficiency and renewable energy projects to reduce greenhouse gas emissions in Colorado.

Proposed Actions Involving GHGs Not Subject to ESA Consultation

On October 3, 2008, the Department of the Interior (“DOI”) issued a Solicitor’s Opinion concluding that proposed actions involving the emission of greenhouse gases (“GHGs”) do not meet the “may affect” threshold set forth in the regulations implementing the Endangered Species Act (“ESA”), and, therefore, these actions do not trigger the consultation requirements under section 7 of the ESA. In a separate action also on October 3, 2008, in a letter (“EPA’s Letter”) addressed to the Fish and Wildlife Service (“FWS”) and the National Marine Fisheries Service (“NMFS”), the Environmental Protection Agency (“EPA”) sought concurrence with its conclusion that issuing permits under the Clean Air Act for activities emitting GHGs in amounts equal to or less than a modeled facility does not require section 7 consultation.