By J. Wylie Donald, Partner, McCarter & English
We hope you don't come to this blog for stock tips but it doesn't take John Bogle to know that the debt ceiling impasse and the budget furor do not bode well for renewable energy stocks. Citing the debt crises and oversupply, here is how one report put it: "One of the biggest losers on the day was the PowerShares WilderHill Clean Energy Portfolio (PBW) which slumped by 1.4% to open up the week."
So where else is the national obsession on the nation's debt going to take a bite out of responses to climate change. We tracked down a few subjects.
Carbon Dioxide Regulation - Efforts by House Republicans to defund USEPA's steps to regulate carbon dioxide resulted most recently in H.R. 2584, the proposed Department of the Interior, Environment, and Related Agencies Appropriations Act of 2012. Section 453 provides, among other things, that "None of the funds made available under this Act shall be used--(1) to prepare, propose, promulgate, finalize, implement, or enforce any regulation pursuant to section 202 of the Clean Air Act (42 U.S.C. 7521) regarding the regulation of any greenhouse gas emissions from new motor vehicles or new motor vehicle engines that are manufactured after model year 2016 to address climate change; ..."
This is not a new tactic. It is probably fair to say that what is in the works now at EPA is not what will be the final word.
Tax Credits - Under § 1603 of the American Recovery and Reinvestment Tax Act renewable energy project developers may take cash payments in lieu of the investment tax credits. The Treasury reports over 7000 projects funded to the tune of $6.4 billion, resulting in total investment of $21.6 billion. Although the credits do not expire until October 2012, some think they are under the gun right now.
Ethanol - The most subsidized part of the renewable energy mix, ethanol producers and corn farmers received a stern message on June 16 when Senator Dianne Feinstein obtained a symbolic vote (73-27) in favor of ending ethanol subsidies on July 1. The White House promised a veto and the proposal has not gone anywhere in the House.
Energy Efficiency - Congress can't figure out the debt ceiling mess but remains expert at creative bill naming. H.R. 2417, the Better Use of Light Bulbs (BULB) Act, passed overwhelmingly, but didn't take effect because of the procedural rule adopted to permit a vote, which required a supermajority. The bill would have repealed certain provisions of the Energy Independence and Security Act of 2007 that prescribed energy efficiency standards for incandescent lamps (among other things).
We are sure there are others. Notwithstanding that the Energy Independence and Security Act of 2007 passed both houses of Congress by wide margins, the winds of change are now blowing hard and furiously. Where all these programs will be when the furor over the debt ceiling subsides is unknown, but no one can dispute that the climate has changed.
J. Wylie Donald, a partner at 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:
Coal Exports to China and Rising Temperatures.
Predicting Sea Level Rise - The Arctic Council Raises the Ante.
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.
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