By J. Wylie Donald, Partner, McCarter & English
Last month Secretary of State Hilary Clinton and other prominent diplomats signed the first ever treaty under the auspices of the Arctic Council; specifically, the member nations addressed Arctic search and rescue, made necessary by the increasing traffic in the formerly ice-locked realm caused by the reality of Arctic warming. Less noticed, perhaps, was the release of a report by the Council's Arctic Monitoring and Assessment Program (AMAP). Among other things, the report, Snow, Water, Ice and Permafrost in the Arctic, forecasts up to a 5-foot rise in sea level by the turn of the century. This is real news because the earlier report in 2007 by the Intergovernmental Panel on Climate Change forecast an increase only one-third as large. We hesitated to report the AMAP conclusions because the last thing a law firm wants to be called is an alarmist, always sounding the air raid siren when a blip appears on the radar. But, by the same token, counsel's fundamental role is to assist clients in addressing risks. That there are extreme views on almost any subject does not mean that the subject should be ignored. And the views here are not extreme. Climate change is occurring. Prudence dictates that the effects be considered and addressed.
The AMAP report is a product of the environmental assessment arm of the Arctic Council, an 8-nation group that considers how to promote sustainable development and environmental protection in the Arctic. The report picks up where the IPCC left off, when it forecast a sea level rise of between 7 and 23 inches by 2100. Left out of the IPCC analysis was the effect of the melting Antarctic and Greenland ice sheets because the science was undeveloped.
Four years later, the Arctic Council has filled in that void and reached a startling result. According to the report's executive summary, the warming of the Arctic is having a dramatic effect. "A nearly ice-free summer is now considered likely for the Arctic Ocean by mid-century." A "Key Finding" was that "global sea level is projected to rise by 0.9-1.6 m by 2100." Translating, that is a sea level rise of between 3 and 5 feet by the end of the century.
Shipping companies are salivating at the prospect of a straight shot over the roof of the world from Europe to Asia. Investors in the Panama Canal are less enthusiastic.
What does all this mean for those considering their waterfront risks far south of the Arctic Circle? Quite a bit actually. The EPA offers some sobering data on its Coastal Zones and Sea Level Rise website.
• A two foot rise in sea level would eliminate almost 10,000 square miles of land (that is, an area exceeding all of Massachusetts).
• Damage from storms in a world with a 3-foot higher sea level would be 2 or 3 times as large.
• The salinization of coastal aquifers from salt water intrusion from rising sea levels threatens water supplies in Florida and south Jersey.
It may seem like there is little that can be done if one is unwilling to abandon the shore. But that would be a very shortsighted view. Investors, lenders, developers and businesses involved with real estate near the shoreline should be considering the following-
1. What interest in land should one acquire - a fee simple or a conventional 30-year lease? The lessee, without a single additional word in its lease, may be protected from rising sea levels by the covenant of quiet enjoyment. The fee owner, on the other hand, bears all of the risk of a rising mean high water mark.
2. How effective are one's contracts' force majeure clauses? Will performance be excused if one's facility is submerged? What about if the local infrastructure goes underwater? Does a condemnation action by governmental authorities trigger the provision?
3. Where exactly is mean high water? Where will it be if the predicted rise occurs even in part? What is the significance of that for the investment expectations of all involved?
4. What is the effect of a state statute that establishes the seaward property line at something other than the sea? If this sounds nonsensical, it is the law in Florida, as confirmed by the U.S. Supreme Court in Stop the Beach Renourishment, Inc. v Florida DEP. Florida's statutory "erosion control line" converted many beachfront properties, into beachview properties. And no, there was no compensable "taking."
There are certainly others. The point is not to run about shouting "The sky is falling!". The point is to consider thoughtfully the possibility that the sky may fall and whether there is anything that can be done about it.
J. Wylie Donald is a partner of McCarter & English LLP counsels and litigates for clients on insurance coverage, environmental and products liability matters. Mr. Donald co-chairs the firm's Climate Change and Renewable Energy Practice. He draws on his substantial environmental experience, his prior non-legal technical work, and his deep involvement in risk management to assist clients in understanding and controlling the coming regulatory and non-regulatory impacts of climate change. He has tried cases and argued appeals in the state courts in New Jersey and Maryland, conducted private arbitrations and mediations, and argued motions in federal courts across the nation.
Read more at Climate Lawyers Blog by McCarter & English, LLP.
The Climate Lawyers Blog is a 2011 LexisNexis Top 50 Blogs for Environmental Law & Climate Change winner.
Additional writings by J. Wylie Donald on the LexisNexis Communities:
Looking Forward and Looking Back - Some Climate Change Response Perspectives and Predictions.
McCarter & English LLP on Insurance Coverage for Greenwashing Claims: It Depends on the Packaging.
J. Wylie Donald and Jocelyn G. Hill of McCarter & English LLP on Covering the Green Roof -- With Insurance.
Lexis.com subscribers can access the Lexis enhanced version of the Stop the Beach Renourishment, Inc. v. Fla. Dep't of Envtl. Prot., 177 L. Ed. 2d 184 (U.S. 2010) decision with summary, headnotes, and Shepard's.
Non subscribers can access the free unenhanced version of the Stop the Beach Renourishment, Inc. v. Fla. Dep't of Envtl. Prot., 177 L. Ed. 2d 184 (U.S. 2010) decision available from lexisONE Free Case law.
Lexis.com subscribers can utilize the following resources:
Professor Michael Allan Wolf on Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection, 2010 U.S. LEXIS 4971 (June 17, 2010) (Emerging Issues Analysis).
Global Climate Change, 3-17C Environmental Law Practice Guide § 17C.05 (Matthew Bender).
Climate Change and Global Warming, Grad, Treatise on Environmental Law (Matthew Bender).
Accretion, Reliction, and Avulsion, 9-66 Powell on Real Property § 66.01 (Matthew Bender).
Access The Store to learn more about Environmental Law Practice Guide.
Access The Store to learn more about Grad, Treatise on Environmental Law.
Access The Store to learn more about Powell on Real Property.
Powell on Real Property: Michael Allan Wolf Desk Edition is available at The Store as an eBook for eReaders including the Amazon® KindleTM and the Apple® iPad® and Sony® Reader.
For more information about LexisNexis products and solutions, connect with us through our corporate site.