A Publication
of the
Climate Change Update
Editors: Gabrielle Sigel and Rachel Loftspring
Federal Legislative Developments
Murkowski Defeat Could Effect
Greenhouse Gas Emission
Legislation
On August 31, 2010, Senator Lisa
Murkowski (R-Alaska) conceded
her Senate seat to “Tea Party” rival
Joe Miller (R) in a close Republican
primary race for the Senate seat.
Senator Murkowski has served
on the Senate since late 2002,
when she was appointed by former
Alaskan Governor Frank Murkowski
(R), who is her father. She then
won election to a six-year term in
November 2004.
Senator Murkowski has been one
of the most prominent critics of
EPA’s efforts to regulate GHG
emissions through the Clean Air
Act (CAA), and her departure could
mean the loss of a vocal opponent
of EPA, according to a director
for Environment America. As
reported in the June 2010 Climate
Change Update, in June Senator
Murkowski had offered a resolution
to block EPA action but failed to
get the necessary votes to allow
the measure to be debated. As
reported in the July 2010 Climate
Change Update, Senator Murkowski
had also pushed for an amendment
to delay EPA regulation of
stationary sources, such as power
plants and large industrial sites,
for two years. That amendment
was not considered before the
August recess.
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Climate and Clean Technology
Greenland’s Melting Ice Sheet
Signals Trouble Ahead
On August 10, 2010, a group of
scientists and experts who study the
Arctic region told Representative
Edward Markey (D-Mass.) and
the Select Committee on Energy
Independence and Global
Warming that the ice sheet
covering Greenland is expected
to disappear more quickly than
scientists previously thought. The
Congressional briefing took place
five days after a 100 square mile
ice sheet broke off of Greenland’s
Peterman Glacier and floated into
the ocean. According to scientists,
the ice sheet is more than four times
the size of Manhattan and is the
largest piece of Arctic ice to break
free in nearly half a century.
It is expected the speed of melting
ice sheets will increase over time.
Factors contributing to this include
rising ocean temperatures and
further breakage of the ice shelf.
When included in calculations
predicting future sea level, melting
ice sheets could contribute to a
sea level rise of a meter or more
by the end of the century, affecting
hundreds of millions of people.
Further, a warming of over two
degrees could eventually lead to the
disappearance of Greenland’s entire
ice sheet, which would result in an
even more dramatic sea level rise.
As one scientist said, “It is easier to
get rid of an ice sheet than it is to
grow it back.” Click here for more
information.
Law Practice
August 2010
Tax Incentives Bill Introduced By
Kerry Prior to Senate Recess
On August 6, 2010, Senator John
Kerry (D-Mass.) unveiled a bill
that would provide tax incentives
for clean energy manufacturing,
renewable energy, and conservation.
The bill, called the Clean Energy
Technology Leadership Act, is
significantly more limited than the
comprehensive energy and climate
bill introduced by Senator Kerry and
Senator Joe Lieberman (I-Conn.)
last May. That bill aimed to reduce
carbon emissions 17% by 2020
through a cap-and-trade system.
Kerry’s new bill would extend
and modify tax incentives for
new energy-efficient homes,
non-business energy property
improvements, and energy-efficient
commercial buildings. It also would
provide incentives for natural-gas
heavy vehicles, which emit fewer
GHGs than standard vehicles,
extend the excise tax credit for
biodiesel and renewable diesel
through 2012, and extend the credit
for domestic manufacturers with
energy appliances.
Federal Regulatory
Developments
EPA Delays Issuance of
Final Ozone Standards Until
October 2010
On August 20, 2010, EPA filed a
status report with the U.S. Court of
Appeals for the District of Columbia
Circuit delaying the finalization of
Climate Change Update
its air quality standards for ozone,
originally scheduled to be finalized by
August 31, 2010. According to EPA,
it now plans to sign a final rule for the
standards, a reconsideration of the
ozone standards issued in 2008, on
or about the end of October 2010,
once its review of comments on the
draft rule is complete.
The draft rule, which was released
last January, proposed lowering
air quality standards for ozone to
between .060 and .070 parts per
million (ppm), the range suggested
by EPA scientific advisors during the
administration of George W. Bush.
The 2008 ozone standards had set
primary and secondary standards
for the pollutant at .075 ppm. The
primary standard is to protect public
health, while the secondary standard
is to protect crops and public welfare.
Seven senators have requested that
EPA retain the 2008 standards for
ozone, arguing in a letter sent to EPA
Administrator Lisa Jackson on August
6, 2010, that a more protective
standard would require industrial
facilities to install expensive pollution
controls that could lead to increased
energy costs and job losses. The
letter also asserted that EPA has not
conducted the necessary additional
research into health effects of ozone
pollution since setting the 2008
standards. Signatories to the letter
include Senators Dick Luger (R-Ind.),
Claire McCaskill (D-Mo.), and
George Voinovich (R-Ohio).
EPA Issues Air Toxics Standard
For Industrial Engines
On August 16, 2010, EPA released
its final national emissions standard
for hazardous air pollutants
(NESHAP) for gas-fired stationary
spark ignition reciprocating internal
combustion engines built before June
12, 2006. Under the standards, the
stationary engines will be required
to control emissions of hazardous
air pollutants, or air toxics, such as
formaldehyde, acetaldehyde, acrolein,
methanol, and benzene. The rule
amends 40 C.F.R. Part 63, Subpart
ZZZZ and will take effect October 19,
2010.
2
This NESHAP sets numeric emission
standards for several classes of
spark ignition engines that are major
sources and area sources of toxic
pollutants. It also requires engine
operators to adhere to certain
required work practices, including
regular oil changes, periodic spark
plug replacement, and hose and
belt inspections. EPA had deferred
issuing these final air toxic standards
after concerns were raised during
the comment period that EPA lacked
adequate emissions data to set the
standards.
EPA Sends White House Draft
Rules Limiting Heavy-Duty
Vehicle Emissions
On August 13, 2010, EPA and
the Department of Transportation
(DOT) released to the White House
regulatory review office draft emission
limits that would limit heavy-duty
vehicle emissions under the CAA.
The rules were in response to a
memorandum signed by President
Obama on May 21, 2010, directing
EPA and DOT to expand their rule-
making program to include medium-
and heavy-duty trucks for model years
2014 through 2018.
In his memorandum, President
Obama wrote, “while the Federal
Government and many States have
now created a harmonized framework
for adjusting the fuel economy of and
greenhouse gas emissions from cars
and light-duty trucks, medium- and
heavy-duty trucks and buses continue
to be a major source of fossil fuel
consumption and greenhouse gas
pollution.” According to President
Obama, large tractor trailers
represent half of all GHG emissions
from the sector and those emissions
can be slashed up to 20%, and
fuel efficiency can be increased by
25%, using existing technologies.
President Obama has urged EPA
and DOT to issue final standards for
trucks and buses by July 30, 2011.
Federal Litigation Developments
Twenty-Five Lawsuits Filed
Against EPA Over Tailoring Rule
On August 2, 2010, the state of
Texas filed a lawsuit against EPA
challenging the agency’s GHG
tailoring rule. Texas v. EPA, D.C. Cir.,
No. 10-1222, 8/2/10. The Texas suit
was the twenty-fifth and final lawsuit
filed by the August 2, 2010, deadline
for lawsuits challenging the rule. The
tailoring rule was designed by EPA
to exempt smaller sources of GHG
emissions, such as small businesses,
schools, and hospitals, from the GHG
emission control requirements that
will take effect on January 2, 2011.
Environmental groups who have
sued EPA over the GHG tailoring
rule include the Center for Biological
Diversity, which challenged EPA’s
decision to delay implementing GHG
emissions limits until January 2,
2011, and the Sierra Club. Center
for Biological Diversity v. EPA, D.C.
Cir., No. 10-1205, 8/2/10; Sierra
Club v. EPA, D.C. Cir., No. 10-
1215, 8/2/10. Prominent industry
groups challenging the tailoring
rule include the U.S. Chamber of
Commerce, which sued EPA on July
29, and the National Association of
Manufacturers. U.S. Chamber of
Commerce v. EPA, D.C. Cir., No.
10-1199, 7/29/10; National Ass’n
of Manufacturers v. EPA, D.C. Cir.,
No. 10-1218, 8/2/10. Alabama
and the Louisiana Department of
Environmental Quality also have
filed separate lawsuits, challenging
EPA’s authority to regulate GHG
emissions under the CAA. Alabama
v. EPA, D.C. Cir., No. 10-1211,
7/30/10; Louisiana Department of
Environmental Quality v. EPA, D.C.
Cir., No. 10-1221, 8/2/10.
Utilities, DOJ Seek U.S. Supreme
Court Ruling
On August 2, 2010, American Electric
Power Company (“AEP”) and other
large utilities companies petitioned
the U.S. Supreme Court for a writ
of certiorari seeking review of the
Second Circuit’s decision finding that
climate change is a public nuisance
Climate Change Update
and permitting plaintiffs to proceed
with a lawsuit seeking to impose
caps on GHG emissions from power
plants. American Electric Power
Company, Inc., et al., v. State of
Connecticut, et al., U.S., No. 10-174,
8/2/10. According to the petition,
the ramifications of the Second
Circuit’s holding are “staggering” and
would permit a single judge to “set
emissions standards for regulated
utilities across the country - or, as
here, for just that subset of utilities
that the plaintiffs have arbitrarily
chosen to sue.” The petition further
argued that the imposition of
GHG emissions caps on individual
enterprises as relief for alleged future
risks of global climate change has no
statutory basis, undermines the CAA,
and implicates fundamental policy
issues more properly reserved for the
political branches.
On August 24, 2010, the Department
of Justice (DOJ), representing quasi
governmental TVA, filed a brief
in support of AEP and the other
petitioners, urging the Supreme
Court to vacate the Second
Circuit’s decision and remand for
consideration of two issues: (1)
whether, independent of Article III
standing requirements, plaintiffs’
suits should be barred as a matter of
prudential standing; and (2) whether,
in light of the multiple actions taken
by EPA since the Second Circuit
issued its decision, any otherwise
cognizable federal common-law
claims at issue have now been
displaced.
The Supreme Court could decide as
early as this fall whether to review the
case.
Fourth Circuit Holds Emissions
Do Not Constitute a Public
Nuisance
On July 26, 2010, the Fourth Circuit
reversed a decision by the Western
District of North Carolina granting an
injunction that required the immediate
installation of emissions controls at
four Tennessee Valley Authority (TVA)
electricity power plants. State of
3
North Carolina v. Tennessee Valley
Authority, 4th Cir., No. 09-1623,
7/26/10. The injunction was based
on the district court’s finding that
the plants’ conventional pollutant
emissions constitute a public
nuisance in North Carolina.
The Fourth Circuit found the district
court’s ruling flawed for several
reasons. First, the court held that,
if permitted to stand, the injunction
would encourage other courts to use
vague public nuisance standards
to “scuttle the nation’s carefully
created system for accommodating”
the need for energy production and
clean air, resulting in a “balkanization
of clean air regulations and a
confused patchwork of standards”
that would hurt both industry and
the environment. Second, the
court found that the injunction
improperly applied home state law
extraterritorially. Third, the court
did not believe that “an activity
expressly permitted and extensively
regulated by both federal and state
government” could constitute a
public nuisance. While the court
noted North Carolina’s “entirely
laudable quest” to protect the health
of its citizens, it held that a public
nuisance injunction was not the
appropriate method by which to do
so.
This ruling will likely make
conventional pollutant nuisance suits
more difficult to bring. It remains
to be seen whether climate tort
suits over GHG emissions, such as
American Electric Power Company,
Inc., et al., v. State of Connecticut,
et al., discussed below, will also be
impacted by the decision.
State and Regional Developments
Solar Thermal Power Plant Moves
Forward
On August 4, 2010, a proposed
392-megawatt solar thermal power
plant in the Mohave Desert won
preliminary approval from California
state regulators. The plant, which
is being developed by BrightSource
Energy, Inc., would reportedly double
the amount of solar thermal power
produced in the United States. Solar
thermal power works by using mirrors
to heat water or molten salt in a
central tower.
Because of its elevation, heat, aridity,
and proximity to population centers,
the Mohave Dessert, a 22,000 square
mile expanse in California, Nevada,
Arizona, and Utah, is viewed by
many as an ideal venue for building
the next generation of large solar
thermal power plants. According
to BrightSource, the project would
generate 1,000 local union jobs and
displace 400,000 tons of CO2 each
year. Power generated by the plant
is contracted to go to Pacific Gas
& Electric Company and Southern
California Edison Company.
Regional Greenhouse Gas
Initiative, a Year in Review
On August 4, 2010, the Regional
Greenhouse Gas Initiative (RGGI)
released a report reviewing the
first year of the RGGI program.
According to the report, the price of
emissions allowances sold through
RGGI dropped considerably in price
over the first year of the program.
Purchasers of the allowances were
mostly large utilities subject to the
regional cap on CO2 emissions and
needed the allowances to comply
with the law. The report also found
that prices for short-term futures
for 2009-vintage allowances fell
41%, from an average of $3.80 per
allowance in the first quarter to $2.05
in the fourth quarter. Overall, the six
RGGI auctions conducted in 2009
accounted for the sale of 172 million
allowances for $494 million.
On September 13, 2010, RGGI is
sponsoring a stakeholders’ meeting
in New York City to gather input on a
range of issues that could influence
the cap and trade program. Major
topics for the review include cost
and performance of new electricity
generation, power plant additions
and retirements, and the cost of
performance of pollution controls.
Review of the program could lead
Climate Change Update
to a number of changes, including
reduction in the emissions cap
and expansion of the program to
other sectors. RGGI states include
Connecticut, Delaware, Maine,
Maryland, Massachusetts, New
Hampshire, New Jersey, New York,
Rhode Island and Vermont.
International and Business
Developments
Fortaleza Declaration Released
on Dry Lands
On August 20, 2010, the
Second Conference on Climate,
Sustainability, and Development
in Arid and Semi-Arid Regions
concluded in Fortaleza, Brazil.
Two thousand participants from
nearly 100 countries attended the
Conference, the culmination of which
was a document entitled Fortaleza
Declaration: Bringing DryLands
Into The MainStream (Declaration).
Desertification is a process by which
scarcity of rain and excess heat
exhausts the soil, making it inert and
infertile. Brazil’s environment ministry
reports that 34.7% of the world’s
land is threatened by desertification.
According to the Declaration, roughly
1 billion people are estimated to
have their livelihoods threatened by
desertification alone and, without
sustainability of dry land regions, the
entire planet is threatened.
To combat desertification, the
Declaration issues several calls
to action, including: sustainable
development and climate change;
political representation at multiple
scales; synergies among global
environmental and development
initiatives; financing of climate-
sensitive sustainable development;
education for sustainable
development, knowledge and
information exchange; integrated
planning and implementation
of development strategies and
programs; and an urgent response
to the current and emerging climate,
development, and sustainability
challenges and opportunities in dry
land regions.
4
Bonn Talks Result in Draft
Proposal and Disappointment
On August 6, 2010, the Ad-Hoc
Working Group on the Kyoto Protocol
released a draft proposal containing
submissions from delegates
attending a week-long climate
change negotiating session in Bonn,
Germany. The 50-page document
focuses on land use changes and
forestry policies, and also includes
language that would allow carbon
capture, storage technology,
and nuclear power in the clean
development mechanism (CDM).
Under CDM, wealthy nations can
earn credits toward their emissions
reduction targets under the Kyoto
Protocol if they invest in projects
that save or reduce GHG emissions
in developing nations. The draft
document will serve as the basis for
the next round of negotiations, which
will take place in Tianjin, China, from
October 4 - 9, 2010. The Tianjin
negotiations are the final set of large-
scale U.N. meetings planned before
the climate change summit slated for
Cancun, Mexico, this winter.
According to reports, delegates
expressed disappointment in the
outcome of the talks, which seem to
be moving away from an agreement
to replace the Kyoto Protocol. The
Kyoto Protocol expires on December
31, 2012. A major issue was the U.S.
Senate’s July decision to table climate
change legislation. According to
one delegate, “there is a perception
[by some] that because there is no
adequate legislation in the United
States . . . nothing can occur, and
nothing will result, because the U.S.
is not legislatively on board and
therefore the pace should be slowed
or the process should really wait on
the U.S.” Jonathan Pershing, the
head of the U.S. delegation in Bonn,
refuted those claims, maintaining that
the United States is committed to its
promise from Copenhagen to reduce
GHG emissions.
Presidential Leadership on
Climate Change More Important
Than Ever, Report Says
On August 5, 2010, the Presidential
Climate Action Project (PCAP),
a consortium of environmental
advocacy groups, released a
report entitled Plan B: Near-Term
Presidential Actions for Energy and
Environmental Leadership. The
report recommends that, particularly
in light of Congress’s failure to pass
legislation that puts a price on carbon
or establishes a national portfolio
standard for renewable energy,
President Obama should use his
executive power to implement strong
climate policies.
The report puts forth “five ideas” it
suggests President Obama should
implement prior to the United
Nations’ climate change summit
scheduled this winter in Cancun,
Mexico: (1) work with states and local
governments to create a national road
map to the clean energy economy;
(2) declare a war on energy waste,
with the goal of making the United
States a world leader in power
conservation by 2035; (3) begin
reinventing national transportation
policy; (4) eliminate fossil energy
subsidies under the administration’s
control; and (5) establish ecosystem
restoration as a climate action
strategy.
Specifically, PCAP’s plan emphasizes
shifting power back to the states.
It recommends that President
Obama seek new “energy transition
partnerships” between state, local,
and federal agencies, and also
intergovernmental collaboration on
migrating and adapting to climate
change. It further recommends
a change in federal law which,
according to the report, currently
offers greater incentives for states
and localities to build roads than to
develop mass transit and other low
carbon mobility options. The report
additionally suggests phasing out
taxpayer subsidies for fossil energy
industries. PCAP plans to offer the
Obama administration a “fresh list of
Climate Change Update
recommendations” in January 2011,
the mid-point of President Obama’s
first term.
Study Supports Wind Turbines in
the Great Lakes, Debate Ensues
On August 5, 2010, Nortech Energy
Enterprise released a study examining
scenarios concerning the use of
wind turbines in Lake Erie in 2030.
The study suggests that turbines
could generate over $580 million in
public revenue and 8,000 local Ohio
jobs. Turbines in the Great Lakes,
For more information, please contact:
Gabrielle Sigel
Partner
Tel: 312 923-2758
Email: gsigel@jenner.com
Or visit www.jenner.com/climatechangeupdate
like the turbines proposed in the
Cape Wind project off the shores
of Cape Cod, Massachusetts, have
both strong support and strong
opposition. Proponents of the Great
Lakes turbines emphasize that,
beyond generating wind energy, the
turbines would be a means to boost
the Midwest economy. Opponents
of the turbines counter that offshore
wind would be costly, run into
permitting issues, and face technical
problems such as ice accumulations
on the blades.
Rachel C. Loftspring
Associate
Tel: 312 840-8617
Email: rloftspring@jenner.com