Our semi-annual look at the top climate change legal stories is keyed on EPA. You hardly have to have been awake to be aware of the Clean Power Plan and UARG v. EPA, [lexis.com subscribers may access Supreme Court briefs and the opinion for this case]. But other things have stirred the pot as well: three reports – two by the Intergovernmental Panel on Climate Change and the other by Standard & Poor’s, and two climate change lawsuits – one by Illinois Farmers Insurance Company and the other by Biscayne Bay Water Keeper.
1. The Clean Power Plan - On June 6 EPA issued a 600+ page proposal directed at controlling carbon dioxide emissions from operating power plants. By June 2016 States are required to submit plans for such control (there is also an option for extending the due date if more time is needed). EPA’s press release summarizes what is supposed to happen:
The Clean Power Plan will be implemented through a state-federal partnership under which states identify a path forward using either current or new electricity production and pollution control policies to meet the goals of the proposed program. The proposal provides guidelines for states to develop plans to meet state-specific goals to reduce carbon pollution and gives them the flexibility to design a program that makes the most sense for their unique situation. States can choose the right mix of generation using diverse fuels, energy efficiency and demand-side management to meet the goals and their own needs. It allows them to work alone to develop individual plans or to work together with other states to develop multi-state plans.
Thus, the learning that has gone on over the past several years as embodied in RGGI, AB 32, RPSs and other state initiatives is going to have an opportunity to prove itself.
2. UARG v. EPA - The Supreme Court has now weighed in on climate change three times: Massachusetts v. EPA, [enhanced version available to lexis.com subscribers], Connecticut v. American Electric Power, [enhanced version available to lexis.com subscribers] and, now, Utility Air Regulatory Group v. EPA. – Readers will remember the D.C. Circuit’s 2012 ruling in favor of EPA defeating challenges to the Endangerment Finding, the Tailpipe Rule, the Timing Rule and the Tailoring Rule, [enhanced version available to lexis.com subscribers]. UARG was a limited appeal of that decision and accomplished nearly all that EPA required. At the end of June the Supreme Court affirmed EPA’s greenhouse gas regulatory program, with the exception of rules focused on a small group of emitters. How small? Before UARG EPA estimated its rules would reach 86% of GHG emissions. After UARG EPA can reach only 83%. In a nutshell, EPA has authority under the Clean Air Act to impose GHG emission regulations on major emitters already subject to regulation. This bodes ill for those seeking to challenge the Clean Power Plan.
3. Climate Science - The science continues to mount demonstrating the effects of climate change. In two more contributions from the Intergovernmental Panel on Climate Change, Working Group II lays out in Climate Change 2014: Impacts, Adaptation, and Vulnerability “how patterns of risks and potential benefits are shifting due to climate change.” The report also assesses how “impacts and risks related to climate change can be reduced and managed through adaptation and mitigation.” In Climate Change 2014: Mitigation of Climate Change Working Group III “respond[ed] to the request of the world's governments for a comprehensive, objective and policy neutral assessment of the current scientific knowledge on mitigating climate change." The two reports complement Working Group I’s report released last year, which concluded: “It is extremely likely that human influence has been the dominant cause of the observed warming since the mid-20th century.”
4. Climate Risk - It has been a common theme for this blog that acceptance of climate change will occur not because of science, but because of the responses of business entities that recognize that climate change denial is not in their best interest. But it is also a theme that until there is an actual identified business reason to take an action, businesses will not go out on a limb. Standard & Poor’s exemplifies our thinking. In March it issued a short report, Climate Change is a Global Mega-Trend for Sovereign Risk. In the report S&P concludes “the evidence suggests that it is probably safe to expect that for most national economies, other things being equal, climate change will negatively impact national welfare and economic growth potential. Observations corroborating this expectation could lead Standard & Poor’s to lower sovereign ratings on the most affected sovereigns.” That is, “we see a potential problem but we aren’t ready to act just yet.” Notwithstanding S&P's failure to move today, this pronouncement does communicate to the buyers of sovereign debt that they had better pay attention to climate change as it may be material to their investment.
5. Illinois Farmers Insurance Co. v. The Metropolitan Water Reclamation District of Greater Chicago - It didn’t take Illinois Farmers long (less than 60 days) to drop its lawsuits against dozens of municipalities and other government entities alleging negligent management of stormwater. The central feature was the claim that the government entities were on notice of the effects of climate change and did not incorporate them into their stormwater planning. We presume the entities’ sovereign immunity defense persuaded Illinois Farmers to go quietly in the night. But the insurance company has competent lawyers and sovereign immunity surely was no surprise. So, was this the proverbial shot across the bow, putting government, and the entities that serve government – the design and engineering firms – on notice that climate change had better enter into their forecasts or they will be pursued for negligence? Time will tell.
6. U.S. v. Miami-Dade County - Miami-Dade’s sewer insfrastructure is falling apart and EPA compelled the city into a consent order under the Clean Water Act to get things cleaned up. Enter the intervenor, Biscayne Bay Waterkeeper, who insisted that the consent decree was improper as it did not take rising sea levels caused by climate change into effect. Federal district court judge Federico A. Moreno considered the consent decree and rejected it because it lacked sufficient incentive for the county to abide by the decree. The court did not mention BBWK’s concern. Nevertheless, Miami-Dade appears to have gotten the message that it needs to be paying attention. The county has a task force devoted to sea level rise and it is preparing a report with recommendations. This is from the April 28 minutes of the task force:
Chairman Ruvin said that sea level rise was inevitable, and to ensure that the community remained insurable, it was important to begin implementing a plan to address this issue. … Chairman Ruvin noted the Task Force members had heard enough information to understand the necessity of developing a plan to address sea level rise. He said that there were global engineering firms with entire divisions devoted to sea level rise, and suggested that the County conduct a competitive process to retain the services of some of these firms to develop this plan.
It remains to be seen, of course, whether the task force's recommendations will be accepted.
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.
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