The Debate Is Not Over

The debate is not over, notwithstanding the number of times that reports, lectures and newspaper articles begin with the contrary assertion. Although there is little question that the amount of CO2 in the atmosphere has risen significantly in the two centuries since the beginning of the Industrial Revolution and that the global climate is indeed changing, there is still vigorous discussion over how much change is the result of manmade contribution to CO2 levels and what will be the effects over the next decades and even centuries. In reality, we will only know what the future will bring once the future becomes the present. The debates do raise significant issues regarding how much certainty is enough to prompt the imposition of mandatory climate change requirements.

One thing is certain, however - the pace of legal requirements and policy determinations to deal with climate change will continue to accelerate exponentially. The Bush Administration’s resistance to mandatory federal legal requirements to limit the emissions of carbon dioxide and other greenhouse gases in the United States is wavering in the face of relentless pressure from the international community and state and local governments. Various states and local governments are enacting requirements to restrict greenhouse gas emissions within their borders, and in some cases outside their borders. California is the most notable, with the enactment of the most significant and wide-ranging mandatory controls on greenhouse gases in the US. The northeastern states have rolled out the Regional Greenhouse Gas Initiative, which contemplates a regional carbon market. States throughout the West are in various stages in the development of climate change programs, ranging from stakeholder groups in Utah and Colorado to mandatory goals in New Mexico and Arizona. Pressure from the States, from some energy companies, and from the newly elected Democratic Congress will almost certainly result in a mandatory federal climate change program, if not in this Congress, then likely in the next.

There are increasing demands from major investment groups for corporate disclosure of climate change risks, liabilities and impacts of company operations. Large insurance and reinsurance companies are revising policies and business models to take into account projected increases in claims from catastrophic climactic events. Private and government plaintiffs are seeking damages from energy companies for contributions to climate change allegedly resulting in property damage, drought and other impacts. Coal producers and electric utilities in the West are confronting the challenges of providing “clean” power to meet the voracious electric energy appetite of California. Low-carbon and zero-carbon energy production is coming into its own, with wind, solar, biofuels and even nuclear energy development actively under way. NEPA and Endangered Species Act reviews of planned actions are increasingly required to address climate change impacts on the environment and protected habitats. And, not least of all, various carbon markets, including the Chicago Climate Exchange, the EU Emissions Trading Scheme, and a host of smaller markets and spot transactions allow the monetization of carbon reductions and represent the transfer of significant financial resources from company to company and from country to country.

(Contributed by Jim Holtkamp, Environmental Compliance Attorney in the Salt Lake City Office)