On October 15, 2013, the United States Supreme Court granted certiorari to review six of the nine submitted petitions stemming from an appellate court ruling upholding Environmental Protection Agency (“EPA”) greenhouse gas (“GHG”) controls at utilities, factories and other facilities around the country. Specifically, the challenged appellate ruling from the Court of Appeals for the District of Columbia Circuit unanimously upheld EPA’s GHG emission endangerment findings, rebuffed challenges to the EPA’s tailpipe rule for automobile emissions and its applicability to stationary sources, and determined the EPA was “unambiguously correct” in using existing federal law to address global warming. However, the Supreme Court’s review will be more limited than some petitioners sought and should not jeopardize the Obama administration’s larger climate-change agenda.
On August 28, 2013 the California Office of Administrative Law (“OAL”) adopted California Department of Toxic Substances Control’s (“DTSC”) Safer Products Regulations. These regulations will go into effect on October 1, 2013. These important regulations, also referred to as “Green Chemical” regulations, establish a process to identify and prioritize consumer products containing chemicals of concern, permit evaluation of safer alternatives and provide for the potential imposition of product or chemical restrictions by DTSC. The legislative purpose of the regulations is to implement California Assembly Bill 1978, or the “Green Chemistry” law, enacted in 2008. (Health and Safety Code §§ 25215-25257.1.) The regulations have been five years in the making, and are the result of several prior drafts and multiple public comment periods. The consequences of these unprecedented regulations are far reaching, and carry the potential to affect a wide range of consumer products placed into the national stream of commerce.
Today the European Parliament approved a proposal to delay the issue of 900 million emissions allowances (each representing the right to emit one metric ton of carbon dioxide or greenhouse gas equivalent, or CO2e). The purpose of the measure is to ease supply pressure in the European Union Emissions Trading System (EU-ETS), which has been trading CO2e allowances at a level that is viewed by most policy makers and traders to be too low to have the intended policy effect, which is to encourage investments in CO2e emissions-abating technologies. Final wording of legislation that will implement the proposal is yet to be agreed on. In April, the European Parliament rejected a similar proposal, and that rejection led many to question the long-term viability of EU-ETS. We observed here that a collapse of the EU-ETS would not bode well for California’s emerging carbon emissions trading market.
Plans announced by the White House today (June 25) show a credible pathway to meet targets pledged by the President pursuant to the Copenhagen Accord (reduction of greenhouse gas emissions 17% below 2005 levels by 2020). Relatedly, last month the Obama administration increased the assumed social cost of greenhouse gas emissions used for cost-benefit analysis of proposed regulatory decisions to 35 cents per ton, up from 21 cents per ton. These developments arguably represent the Obama administration’s most comprehensive and meaningful push for federal regulation of greenhouse gasses.
Last week, the European Parliament rejected a proposal to reduce the quantity of greenhouse gas (GHG) emissions allowances in order to fix a supply-demand imbalance in the European Union Emissions Trading System (EU ETS). Some view this as the beginning of the end of the European Union’s ten-year carbon cap-and-trade experiment. A high profile failure of the EU ETS is likely to provide ammunition to critics California’s cap-and-trade program.
The landmark Global Warming Solutions Act of 2006 (“AB 32”) tasked the California Air Resources Board (“ARB”) with reducing greenhouse gas (“GHG”) emissions to 1990 levels by 2020. In adopting a scoping plan assembling a number of differing, but complementary, GHG reduction strategies, the ARB included a “cap-and-trade” program as one such strategy to help satisfy AB 32’s goals while allowing industry flexibility in choosing emissions reduction options (i.e., facilities could choose to buy pollution credits, or could choose to reduce emissions and sell credits on the market). The “cap-and-trade” program was deemed preferable to other potential options such as a carbon tax.
The California Air Resources Board (“ARB”) recently commenced development of a new regulation targeting emissions from “off-road” agricultural equipment, such as tractors and combines. The “In-Use Self-Propelled Off-Road Mobile Agricultural Equipment Regulation” is intended to help the State attain federal air quality standards. ARB officials claim the rule is a necessary tool in employing the upcoming ozone and particulate matter state implementation plans (“SIPs”), initiated in 2007.
Sheppard Mullin Partner Geoff Willis was a recently a featured panelist before the Global Adaptation Institute on the subject of Overcoming Inertia — Advancing Corporate Leadership in Adaptation.
On June 18, 2012, Governor Brown directed the Bureau of Electronic and Appliance Repair, Home Furnishings and Thermal Insulation (“Bureau”) to recommend changes to California’s four-decade-old flammability standard for upholstered furniture. Specifically, Governor Brown is seeking to reduce toxic flame retardants in furniture while still providing fire safety. Toxic flame retardants are found in a variety of items, such as high chairs and couches. Evidence suggests that toxic flame retardants harm the environment and are linked to liver and thyroid toxicity, neurological problems, and reproductive issues.
Association of Irritated Residents v. California Air Resources Board et al., A132165 (1st Dist. Div. 3, June 19, 2012)
On June 19, 2012, the California First District Court of Appeal upheld the California Air Resources Board’s (“ARB”) Climate Change Scoping Plan (“Scoping Plan”), which charts dozens of climate change control measures. This ruling clears the way for ARB to move forward with its designated plan to combat greenhouse gas (“GhG”) emissions with a market-based cap-and-trade program. The decision also found the Scoping Plan to be in compliance with the 2006 California Global Warming Solutions Act, also known as AB 32, which required ARB to prepare a scoping plan to reduce GhG emissions to 1990 levels by the end of 2020. A ruling against ARB could have forced ARB to revise the Scoping Plan and freeze implementation of its GhG regulations.