Obama Administration Opposes Use of Nuisance Claims to Address Climate Change

A group of eight states and conservation groups ("Plaintiffs") have been pushing a massive federal nuisance claim against utilities. The Plaintiffs claim that major emitters of carbon dioxide in twenty states have created, contributed to, or maintained a common-law public nuisance by contributing to global warming thereby injuring States and landowners feeling the impacts of climate change. (See prior post discussing 2nd Circuit decision to let nuisance action stand) .

The Plaintiffs claims were dismissed by the district court.  Their suit was reinstated when Plaintiffs won their appeal in the Second Circuit Court of Appeals.  The Appeals Court determined the Plaintiffs had a right to seek relief under federal common law nuisance doctrines.  Now the utilities are requesting the Supreme Court reverse the Appeals Court.

Two critical legal questions at issue throughout the litigation have been:

  1. Political Question- Resolution of the issue is best suited for Congress and not the Court because the relief sought would raise complex issues balancing economic, environmental, foreign policy, and national security.
  2. Whether common law has been displaced by Congressional or Executive Branch actions regulating greenhouse gases.

The 2nd Circuit Court of Appeals determined the claims did not raise a "political question" and were not displaced by the mere presence of regulatory authority in the Clean Air Act. ( Federal common law claims are "displaced" whenever Congress establishes a mechanism to address the problem.)   Now the utilities have petitioned the U.S. Supreme Court to hear their appeal of the lower Appeals Court decision. 

In a surprise to environmentalists, the Department of Justice (DOJ) filed a brief in support of the utilities appeal to the Supreme Court.  In its brief, DOJ argues that EPA, since the 2nd Circuit Court of Appeals decision was rendered, has issued a series of regulatory actions thereby displacing the common law claims of the plaintiffs.  These include:

  • Finalization of the "endangerment finding"
  • Regulation of greenhouse gas emissions (GHGs) from motor vehicles- light duty vehicle standards
  • Issuance of the "Tailoring Rue" which will subject new or expanded major emitters of GHGs to federal permitting requirements
  • U.S. EPA is developing New Source Performance Standards for existing major emitters

While EPA regulatory actions is not completed, there actions may be sufficient for the Supreme Court to ultimately determine common law rights have been displaced.  However, industry has also filed challenges to every regulatory action cited above.  Those challenges may give the Court pause in dismissing the Plaintiffs claims.

DOJ's brief in support of the utilities came as a major surprise to some environmental groups.  This from the Mother Jones website:

This is cold comfort to environmentalists, who are anxious that the administration isn't moving fast enough on those regulations. "It reads like a Bush administration brief," Matt Pawa, an environmental lawyer representing the plaintiffs in this case, told Mother Jones. "It felt like being stabbed in the back. The Obama administration claims to care about global warming, so why is it opposing an effort curtail greenhouse gas emissions from coal-fired power plants?"

Why is the Obama Administration opposing this effort?  Because having the Courts establish climate change regulation would be chaotic.  Here are some good quotes from the DOJ brief:

[Plaintiffs] are but a tiny subset of those who could allege they are injured by carbon-dioxide emissions that have contributed or will contribute to global warming...Moreover, global warming's effect will not be limited to landowner; they will also be felt by governments, individuals, corporations, and interest groups throughout the Nation and around the world.

...Any potential plaintiff could claim to have been injured by any (or all) of the potential defendants.  The medium that transmits injury to potential plaintiffs is literally the Earth's entire atmosphere--making it impossible to consider the sort of focused and more geographically limited effect characteristic of traditional nuisance suits targeted at particular nearby sources of water or air pollution.

The practical reality is that Courts are ill-equipped to address climate change.  How could they possibly be in the best position to address issues such as:

  • What percentage of reductions should be required and over what time period?
  • What sources should be required to reduce emissions?
  • What technologies are viable and should be employed?
  • How does forcing reductions by select emitters balance with similar emitters elsewhere in the country or the world?
  • When are the costs of compliance too significant?
  • How will reductions be monitored and enforced?

While the pace of Congressional action by be slow, turning to the Courts to develop perhaps the most complex, costly and extensive environmental regulatory scheme ever contemplated would not be wise. 

EPA Plays Politics By Delaying Ozone Rule

Back in 2007, U.S. EPA was sued by some States and environmental groups who challenged the legitimacy of the ozone standard -75 parts per billion (ppb)- selected by the Bush Administration.  In 2009, the Obama Administration announced that it was reconsidering the 75 ppb standard.

Ostensibly 75 ppb remains on the table. However, U.S. EPA is likely to revise the standard to somewhere between 60 ppb to 70 ppb.  Back in September 16, 2009, U.S. EPA filed a pleading informing the Court that it would finalize the new standard by August 31, 2010.

As the election looms and the economy's lack of a strong recovery is playing a bigger role, U.S. EPA's revised ozone standard has been sharply criticized as raising costs on industry.  U.S. EPA estimated the cost of compliance at between $19 billion to $90 billion a year by 2020, which will be largely imposed on manufacturers, oil refiners and utilities. 

The U.S. Supreme Court determined in Whitman v American Trucking that U.S. EPA could not consider costs in setting the standard.  The Court held EPA can only consider costs if its expressly granted that authority by Congress:

Section 109(b) [of the Clean Air Act] does not permit the Administrator to consider implementation costs in setting NAAQS. Because the CAA often expressly grants the EPA the authority to consider implementation costs, a provision for costs will not be inferred from its ambiguous provisions. 

The Bush Administration standard of 75 ppb was criticized as not meeting the standard established by the Court because it was inconsistent with recommendations by the EPA's science advisory panel.

While EPA may not be able to consider costs, it apparently can consider politics.  On August 20th, EPA filed a brief with the U.S. Court of Appeals District of Columbia informing the Court that it will take longer to finalize the new standard.

"EPA expects that this process will take approximately two months longer than initially estimate. Thus, EPA's current schedule is to sign a final rule on the reconsideration of the 2008 Ozone standard on or about the end of October 2010."

End of October...or may sometime after November 2, 2010? 

Politics, Litigation and Debate Heats Up Over Climate Change

After this summer's anti-climatic end to federal climate change legislation, some thought that perhaps there would be a temporary end of the discussion of climate change regulation.  However, recent weather events (wildfires in Russia, floods in Pakistan and an ice sheet breaking off Greenland) and extreme heat have reinvigorated the debate. 

Here is some highlights of the recent discussion. 

Is Climate Change Causing Wild Weather? -  I like the National Journal's discussion of controversial topics.  The website features view points from well recognized experts, politicians or interest groups.  The current thread discusses the science (or lack thereof) behind linking climate change to this summer's wild weather. 

GOP Candidates Knock Climate Change-  This article on Politico discusses the number of Republican candidates who are willing to take the stance linking man made emissions to climate change is simply unproven.  With the economy possibly heading to a double dip recession, support for a new "tax" on emissions has become a basis for attack this November.

Chamber Sues EPA Over Endangerment Finding-  In late July, EPA rejected the Chamber's petition for reconsideration of EPA's Endangerment ruling.  The Chamber argued that e-mails released in "climate-gate" justified EPA reconsideration of its finding.  EPA said the e-mails were taken out of context and there is no evidence that undermines its finding. This month, the Chamber pushed its legal finding further by filing suit challenging the basis for EPA's finding that greenhouse gases endanger public health and the environment. 

EPA Marches Forward with Rule Making-  As discussed in my previous post, U.S. EPA is moving forward with regulation of greenhouse gas emission under the Clean Air Act.  Beginning in 2011, without passage of any federal legislation, emissions of GHGs from large sources will trigger new requirements. 

Concluding Comment-  All of this may be a surprise to some of you who thought that the Senate's decision to scuttle federal cap and trade legislative efforts meant the end of the debate.  It is clear that this issue will not go away.  While direct connection to weather events cannot be made, there is no denying the connection between extreme weather events and re-invigoration of our national debate.
 

US EPA Attempts to Ease Transition to Greenhouse Gas Regulation for Large Sources

On August 12th, the U.S .EPA released two proposed rules to address the potential gap that exists while States adopt rules to regulate greenhouse gases (GHGs) from large stationary sources. What U.S. EPA is really doing is making sure all fifty states will be regulating GHGs beginning January 2011.

On May 12, 2010, U.S. EPA finalized its controversial Tailoring Rule, which raised the trigger level for federal permitting associated with GHG emissions.  Unless the U.S. EPA raised the trigger levels from 100/250 tons per year, very small sources would have required federal permits. The Tailoring Rule is U.S. EPA's attempt to phase in GHG, beginning with only very large sources.

Beginning 2011, very large stationary sources of GHGs (like power plants and oil refineries) will need to address GHGs emissions when seeking permits for expansion or new facilities. For the first time, these sources will need to meet Best Available Control Technology (BACT) standards under the Agency's New Source Review Program to control or reduce GHG emissions.

Thirty-Seven (37) states, including Ohio, operate U.S. EPA approved air permitting programs.  State approved programs cannot be "less stringent" than U.S. EPA regulations.  Therefore, when U.S. EPA adopts new standards, States are required to incorporate those standards into their programs. 

However, each State has its own rulemaking process.  U.S. EPA recognized that some states may not be able to complete the rulemaking process to incorporate GHG regulations prior to 2011. Therefore, the August 12th proposal is EPA's attempt to create a backstop rule should states fail to complete their rulemaking process.  The backstop is referred to as a "federal implementation plan" or FIP.  It really means U.S. EPA would temporarily take over permitting functions for sources above the GHG trigger levels in the Tailoring Rule. 

Ohio doesn't like the prospect of U.S. EPA imposing the FIP.  If the FIP is imposed U.S. EPA would temporarily issue PSD permits in Ohio until the State finalizes its rules.  Ohio has released its proposed modifications to incorporate the Tailoring Rule into Ohio EPA's regulations to try and avoid U.S. EPA direct involvement in its permitting program.
 

Ohio- Center of Debate Over Biomass

There is a very good article in the Akron Beacon Journal discussing the debate over the use of biomass as a replacement for coal.  Here is an excerpt from the beginning of the article (click here for full biomass article):

Burning Ohio trees at Burger sets fire to debate
Opponents are hot that FirstEnergy will get credits, question if state can produce enough fuel for power plant

By Bob Downing
Beacon Journal staff writer

Switching from dirty coal to clean wood at FirstEnergy Corp.'s R.E. Burger Power Plant will require millions of trees — year after year.  Where those trees will come from and new questions about whether the switch helps the environment have triggered objections from Ohio environmental and consumer-advocacy groups.

The dispute has brought Akron-based FirstEnergy's application for renewable energy credits — a financial incentive to make the conversion — to a standstill at the Public Utilities Commission of Ohio.

While the article does a great job discussing the different view points, it does not cover one important aspect- Ohio desperately needs to diversify if energy generation.  Right now it relies almost 90% on coal. 

Coal is facing more and more stringent regulation.  These include:

  • Tighter caps on Nox and SO2 emissions in U.S. EPA's proposed Transport Rule
  • Multi-pollutant legislative proposals in Congress
  • MACT standards for mercury reduction
  • Legislation and/or regulation of greenhouse gas emissions
  • Tighter waste disposal requirements

All of this new and potential regulation means the cost of energy production in Ohio will be escalating.  In addition, the prospects for significant added regulatory cost are great.  The challenge for Ohio is great given that it is a highly energy intensive State due to its population and manufacturing base. 

Similar to diversification in your stock portfolio, Ohio needs energy diversification.  The reality is there are not many sources of energy that can provide baseload power.  While wind farms and solar are clean and good investments, they do not produce significant power.  

Nuclear, biomass and natural gas are the current alternatives to coal for baseload power generation.  New nuclear capacity will take years to construct.  Natural gas has its own wild price fluctuations.  Which leaves biomass. 

Outside of greenhouse gas emissions, biomass is a cleaner fuel.  In addition, while  the need for large supplies of biomass fuel may leave wood as the only immediate option, that will change.  Once demand is created, the market will develop other alternatives. 

Energy policy means hard choices.  For those groups strongly opposing biomass, they must answer- if not coal, biomass or nuclear, then what is left as an option given the realities of current technology?

EPA Releases Interim Guidance on Environmental Justice

In my tenure at Ohio EPA, no issue was as vexing as Environmental Justice (EJ).  In a nutshell, there is a legitimate issue behind the concept of EJ- low income and minorities are exposed to more pollution.  Here is how EPA presents the EJ issues:

Fair Treatment means that no group of people should bear a disproportionate burden of environmental harms and risks, including those resulting from the negative environmental consequences of industrial, governmental, and commercial operations or programs and policies.

The root causes of disproportionate impacts can be traced to the history of how our country developed and expanded. Lower income housing can typically be found near areas zoned industrial.  In our past, this occurred for easy access to plant and factories.  However, this history has carried forward and people living in these communities are disproportionately impacted by pollution. 

However, the difficulty was trying to address this social problem through EPA rulemaking or decision making on permits for new industrial facilities.  EJ issues come into conflict with concepts of urban redevelopment, brownfield redevelopment and creating jobs in low income communities. 

Are we really prepared to declare an industrial area off limits to new factories or manufacturing because the pollution burden is too great?  How would someone establish a standard for what is deemed too great an exposure?

How does EPA "regulate away" this social issue?  EPA struggled with answer to these questions for so long that is has released and than retracted EJ policies over time.  For long stretches the Agency simply put EJ issues on the back burner. 

Now, EPA has released its first new Environmental Justice guidance document in a long time.

EPA is required to develop procedures to evaluate EJ issues in its decision making process as a result of Executive Order 12898 which directs agencies such as EPA to do the following:

 “[t]o the greatest extent practicable and permitted by law,” to “identify[…] and address[…], as appropriate, disproportionately high and adverse human health or environmental effects” of agency programs, policies, and actions on minority populations and low-income populations.

EPA's new fifty page guidance document walks through a complex process for evaluating EJ issues in EPA decision making.  I think the chart below says it all.   Is this really helpful in addressing a complex social issue?

Reading the document, the EJ document is strinkingly similar to past efforts by EPA.  It really seems to boil down to two requirements that fall onto EPA staff.

1.  Ensure participation by low income and minority groups in the EPA decision making process-  the guidance offers suggestions for how to reach out to communities and make sure they are informed regarding EPA actions.

2.  Document that EJ issues were considered in the decision making process-  When EPA issues is response to public comments, it must include a description of the EJ issues that were identified and how those impacted the decision making process.

What the guidance document doesn't address- When EPA is required to take alternative action as a direct result of EJ considerations?  The reason EPA avoids setting such standards is that a uniform "regulation" would be nearly impossible to develop.  Therefore, the new guidance appears to be very similar to past EPA approaches to incorporate EJ considerations in its decision making-

  1. Inform;
  2. Consider the alternatives; and
  3. Document how EJ issues were considered in the decision making process