Proposed Reporting Regulations

The proposed reporting regulations make interesting reading. You can review the ARB staff's Initial Statement of Reasons and draft regulations here.

Interestingly, the ARB staff estimates a fairly low cost of compliance for the reporting obligations that the new regulations will impose -- on the order of $3,000 to $300,000 per facility, with the higher costs imposed on the larger more complicated facilities (see pages 82-85 of the PDF). The economic impact of AB 32 will not result from reporting GHG emissions, but from reducing them.

- Morgan

Will the IPCC and the Nobel Committee decide the next US Presidential election?

Today, two related news stories broke that could decide the next US Presidential election.

First, greenhouse gases, which were not expected to cross the critical 450 ppm threshold for another decade, in fact are already at 455. The Intergovernmental Panel on Climate Change (IPCC) will report next month that earth passed the 450 threshold in mid-2005, according to Tim Flannery, an award-winning climate scientist who has reportedly seen the report's underlying data. Dr. Flannery was quoted by Reuters and the Christian Science Monitor as saying, "What the report establishes is that the amount of greenhouse gas in the atmosphere is already above the threshold that could potentially cause dangerous climate change." See http://www.csmonitor.com/2007/1011/p11s01-wogi.html for the Monitor's story.

Second, the Norwegian Nobel Committee announced that the Nobel Peace Prize for 2007 has been awarded jointly to the IPCC and Al Gore "for their efforts to build up and disseminate greater knowledge about man-made climate change, and to lay the foundations for the measures that are needed to counteract such change." See http://nobelpeaceprize.org/. The Committee went on to say:

"Al Gore has for a long time been one of the world's leading environmentalist politicians. He became aware at an early stage of the climatic challenges the world is facing. His strong commitment, reflected in political activity, lectures, films and books, has strengthened the struggle against climate change. He is probably the single individual who has done most to create greater worldwide understanding of the measures that need to be adopted.

"By awarding the Nobel Peace Prize for 2007 to the IPCC and Al Gore, the Norwegian Nobel Committee is seeking to contribute to a sharper focus on the processes and decisions that appear to be necessary to protect the world’s future climate, and thereby to reduce the threat to the security of mankind. Action is necessary now, before climate change moves beyond man’s control."

The Peace Prize is awarded by an Oslo-based committee of five, coincidentally the same number of (Washington-D.C.-based) people who decided the 2000 US Presidential election against Mr. Gore.

-Brian

Everything you know about carbon markets and taxes is wrong.

Here's a thesis that's getting some attention:  the growing focus on de-carbon-izing the atmosphere is distracting the world from its only hope of averting climate change disaster.  That hope, according to Alan Carlin, a Senior Economist at USEPA, is solar radiation management, or SRM.  Essentially a form of global climate engineering, SRM involves the introduction of particulate matter into the stratosphere to block incoming radiation and, thereby, turn down the planet's thermostat.  As proof of the approach's efficacy, Mr. Carlin cites evidence that volcanic eruptions have caused measureable, sustained reductions in average world temperature.

Mr. Carlin's article, which appeared in the September/October 2007 issue of The Enviromental Forum (a publication of the Environmental Law Institute), can be found here:  http://carlineconomics.googlepages.com/CarlinEnvForum.pdf.

Federal Judge Affirms State Regulation of Greenhouse Gas Emissions from Motor Vehicles

Chalk up another victory to the states in their ongoing battle with the federal government over regulation of GHG emissions from motor vehicles. On Wednesday, District Court Judge William Sessions determined that the GHG regulations first enacted by California and later adopted by Vermont are not preempted by federal law.

In a massive, 240-page opinion following trial, the Court roundly rejected the automobile industry's challenges under various preemption theories. In particular, the Court held that: (1) California's regulations were not expressly preempted by either Section 209(b) of the federal Clean Air Act or the fuel economy standards of the Environmental Policy and Conservation Act; (2) federal law does not "occupy the field" of regulation of carbon dioxide emissions from motor vehicles; (3) the regulations do not sufficiently "conflict" with federal laws to warrant preemption; and (4) the regulations do not intrude upon or conflict with national foreign policy.

Conflict preemption was the primary focus of both the trial and the opinion. At trial, the automobile industry attempted to prove that the state regulations stood as an obstacle to EPCA's objectives and purposes by demonstrating that the regulations were technologically and economically infeasible. The Court was not persuaded: "In light of the the public statements of industry representatives, history of compliance with previous technological challenges, and the state of the record, the Court remains unconvinced automakers cannot meet the challenges of Vermont and California's GHG regulations."

The opinion can be found here: http://www.vtd.uscourts.gov/Cases/05cv302.html

____________________________
Brett S. Henrikson, Esq.
Barg Coffin Lewis & Trapp, LLP
One Market
Steuart Tower, Suite 2700
San Francisco, CA 94105
tel: 415.228.5400
fax: 415.228.5450
email: bh2@bcltlaw.com

Air District Regulations and Preemption

On August 20, 2007, the Ninth Circuit held that South Coast Air Quality Management District requirements that California government agencies purchase low-emission vehicles for their fleets are not preempted by the federal Clean Air Act. The decision is based on California's right, under the "market participant doctrine," to choose the type of vehicles that the state will purchase for its own use. The Ninth Circuit did not reach the issue whether the same type of rules, as applied to private fleets, would be preempted, but instead remanded the case to the district court for a determination whether the "fleet rules" would be preempted. Although the decision's impact is limited, it is nevertheless an important precedent in the continuing tug of war between the federal government and California over emissions limitations.

-Morgan

Climate Change and Land Use

Land use promises to be one of the hottest areas of controversy in the development of climate change policy. We have already seen efforts by California AG Jerry Brown to require local governments to incorporate climate change evaluations into the CEQA review process. Here's a blog entry describing an ABA discussion on the topic. The court decisions thus far have all focused on challenges brought after a project has already been approved. We're still waiting for the first decision to address a challenge brought pre-approval.

Morgan

Falling Prices For Emissions Credits

One of the interesting phenomena of this early stage of the development of carbon trading markets is the long-term price trend. On the European market, there are forecasts that carbon offsets for the 2007-2012 period will fall to 8 Euros per ton from about 21 Euros per ton today. See article here. On the Chicago Climate Exchange, prices have fallen from over $4.50 last year to under $3.50 this year. While falling prices may be bad for the carbon trading markets, on a global level they are encouraging. These prices apparently reflect the ease with which industries are finding low cost methods of reducing and/or offsetting CO2 emissions. This price signal, together with the large flow of investment dollars into "green" climate change projects (see BBC article), will likely encourage further and more vigorous government action to reduce GHG emissions. As mandatory reductions take hold in California and elsewhere in the U.S., it will be interesting to watch the price signal, whether rising or falling, and to see whether and how government reacts to it.