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.Continue Reading...
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.Continue Reading...
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.Continue Reading...
After months of CEQA litigation and political lobbying, including an appeal to the California Supreme Court (previous article can be found here), California's landmark climate change bill, the Global Warming Solutions Act of 2006 ("AB 32"), has been modified and appears ready to be implemented starting in January 2012.Continue Reading...
By Randolph Visser, Olivier Theard and Whitney Hodges
This article is the latest in a series chronicling the first litigation challenge to AB 32 (the Global Warming Solutions Act) and the cap-and-trade program in Association of Irritated Residents, et al. v. California Air Resources Board, Case No. CPF-09-509562, ("Ass'n of Irritated Residents v. CARB "). Though environmental justice groups continue to object to cap-and-trade as the primary vehicle to reduce greenhouse ("GHG") emissions to 1990 levels by 2020, the California Supreme Court recently allowed California Air Resources Board's ("ARB") cap-and-trade implementation to move forward, and agency rule development continues.
Environmental Justice Groups Intensify Judicial and Legislative Campaign Against California's Proposed Cap-and-Trade Program
By Olivier Theard
Environmental Justice groups have redoubled their efforts to terminate the California Air Resources Board’s (CARB) proposed cap-and-trade program to reduce greenhouse gas (GHG) emissions to 1990 levels by 2020 under the Global Warming Solutions Act (AB 32). As opposed to a traditional regulatory approach whereby a GHG source would be forced to reduce its on-site emissions, cap-and-trade is a market based approach that allows a GHG source the option to either reduce on-site emissions, or to offset its emissions or pay another source to reduce GHG emissions. Environmental Justice groups have long argued that a market based cap-and-trade program would allow GHG sources to buy their way to compliance and result in disproportionately higher emissions in lower-income communities where large GHG sources reside. These groups have now increased their opposition to cap-and-trade on both the judicial and legislative fronts.
By Whitney Hodges
June was certainly an interesting month for those following the progression of California’s Global Warming Solutions Act ("AB 32"), which requires that California cut greenhouse gas ("GHG") emissions to 1990 levels by 2020. The "linchpin" of AB 32 is a proposed cap-and-trade program, a market-based approach to reducing GHG emissions in which the California Air Resources Board ("ARB") sets a collective cap on GHG emissions and then allows under- and over-polluters to buy and sell credits among themselves. However, recent judicial and agency developments have altered the cap-and-trade landscape. At the very least, the cap-and-trade program, if it survives judicial review, will not begin in earnest until 2013 (instead of the planned January 1, 2012 start date).
By Whitney Hodges
On March 18, 2011, Judge Ernest Goldsmith of the San Francisco County Superior Court suspended implementation of AB 32, California's landmark law to reduce greenhouse gas ("GHG") emissions. In Association of Irritated Residents v. California Air Resource Board, [Statement of Decision] the Court found the California Air Resource Board (the "ARB")'s adoption of AB 32's Climate Change Scoping Plan (the "Scoping Plan") to be in violation of the California Environmental Quality Act ("CEQA"). The ruling determined that the ARB abused its authority by not adequately analyzing potential alternatives to a carbon "cap-and-trade" program aimed at limiting GHG emissions.
By Whitney Hodges
On January 21, a San Francisco Superior Court issued a proposed decision that could significantly delay the implementation of the Global Warming Solutions Act of 2006 ("AB 32"). In Association of Irritated Residents, et al. v. California Air Resources Board, Case No. CPF-09-509562, the Court held that the California Air Resources Board (CARB) failed to comply with the California Environmental Quality Act (CEQA). The Court found the CARB to have neglected to conduct a sufficient environmental impact review prior to adopting the State's AB 32 Scoping Plan (Plan). Specifically, CARB failed to adequately analyze all potential alternatives and prematurely adopted the Plan prior to fully responding to public comment.
Supreme Court To Decide Fate Of Global Warming Litigation In American Electric Power Co. v. Connecticut
By Alona G. Metz and Taraneh Fard
On December 6, 2010, the Supreme Court granted certiorari in American Electric Power Co. v. Connecticut, a federal nuisance case on appeal from the Second Circuit. Plaintiffs -- eight states, the City of New York and three non-profit land trusts -- seek abatement and reduction of greenhouse gas emissions from defendants, who include some of the United States’ largest electric utility companies. The Second Circuit ruled that: (1) the case did not present a non-justiciable political question, (2) the plaintiffs have standing, (3) the plaintiffs stated claims under the federal common law of nuisance, (4) the plaintiffs' claims are not displaced by the Clean Air Act ("CAA"), and, finally, (5) the Tennessee Valley Authority (“TVA”), a quasi-governmental defendant, is not immune from the suit. See Connecticut v. American Electric Power Co., 582 F.3d 309 (2nd Cir. 2009). This article summarizes the Second Circuit's lengthy decision, the implications of such, and the impending Supreme Court review.
By Robert L. Magielnicki, Benjamin R. Mulcahy and Gina Reif Ilardi
Last week Sun Chips pulled its biodegradable snack bag off the market around the same time that the FTC announced that it wanted to change its so-called "Green Guides." Coincidence? Maybe. Sun Chips explained that the more environmentally-friendly bag that it launched with a nice spot on Earth Day - was "noisier" than its regular bag, raising complaints from consumers who were more interested in having a quiet snack bag than doing something to help save the planet. But complaints about "noisy" bags aside, the changes that the FTC has proposed to the Green Guides will make it harder for marketers like Sun Chips to tout the things that they're doing to help reduce the negative effect that their product manufacturing and distribution pipelines are having on the environment. If the FTC takes away a brand's ability to tout those attributes, then it also takes away a brand's ability to leverage those attributes to increase sales. And if that's taken away, we run the risk that brands will make green initiatives less of a priority, which will hurt us all.
The Supreme Court or Congress: Which Will Decide Whether Large Emitters of Greenhouse Gasses May be Held Liable for the Effects of Global Warming?
By Robyn Christo and Scott Vignos
As climate change litigation proceeds throughout the country, three cases, Comer v. Murphy Oil, Connecticut v. American Electric Power and Native Village of Kivalina v. ExxonMobil, provide indications of the Supreme Court's potential role in shaping the legal landscape of climate change. The Fifth Circuit's May 28, 2010 order dismissing the en banc appeal in Comer has provided renewed interest in this issue.
by Adrienne Lee
In March 2010, the California Jobs Initiative Committee began collecting signatures to place their initiative on the November 2010 ballot that would require California to abandon implementation of AB 32, also known as the Global Warming Solutions Act of 2006, until California's unemployment rate drops to 5.5 percent or less for at least a year.
By Jeralin Cardoso
On February 2, 2010, the Securities and Exchange Commission (the "SEC") issued an interpretive release (the "Release"), previously approved by a 3-2 vote on January 27, 2010, to provide guidance to public companies as to how the SEC's existing disclosure requirements apply to climate change matters. The Release was issued after requests were made over several years by a variety of environmental, investor and business groups. A copy of the Release can be found at http://www.sec.gov/rules/interp/2010/33-9106.pdf.
Council for Environmental Quality Issues Draft NEPA Guidance for Consideration of Climate Change Effects
By Brenna Moorhead
The Council of Environmental Quality issued draft guidance to federal agencies on how to analyze the environmental effects of greenhouse gases ("GHG") and climate change under the National Environmental Policy Act ("NEPA") on February 18, 2010. (Available here.)
California Unveils Preliminary Draft Regulation For A Cap-And-Trade Program As One Of The Main Strategies To Reduce Greenhouse Gas Emissions That Cause Climate Change
by Taraneh Fard & Olivier Theard
On November 24, 2009, the California Air Resources Board unveiled its proposed draft regulation for a greenhouse gas ("GHG") cap-and-trade program in its effort to put California on the path to achieve the mandate imposed by Assembly Bill 32 ("The Global Warming Solutions Act") of reducing GHG emissions to 1990 levels by the year 2020, and ultimately achieving an 80% reduction from 1990 levels by 2050. The cap-and-trade strategy is a proposed solution that is intended to provide the certainty that GHG emission reductions will be achieved by setting emission goals, while offering the needed flexibility in reaching those goals through the creation of tradable permits. In other words, the "cap" is a legal limit on the quantity of greenhouse gases that a particular region can emit each year and the "trade" means that companies may swap among themselves the permission—or permits—to emit greenhouse gases. Release of the preliminary draft regulation marks the beginning of the next phase of the cap-and-trade rulemaking, culminating in the California Air Resources Board's consideration in 2010 of the first broad based cap-and-trade program in the nation. The rule will be in effect by January 1, 2012.
Comer v. Murphy Oil USA, __ F.3d __, No. 07-60756 (5th Cir. 2009); Native Village of Kivalina v. ExxonMobil Corporation, No. 08-1138 (N.D. Cal. Sept. 30, 2009)
by James F. Rusk
In two sharply diverging opinions, the Fifth Circuit Court of Appeals and a northern California district court recently considered the validity of common law tort claims against large emitters of greenhouse gases. The Fifth Circuit, in Comer v. Murphy Oil USA, held that plaintiffs had standing and that their claims did not present a nonjusticeable political question. The district court, in Native Village of Kivalina v. ExxonMobil Corporation, found that plaintiffs lacked standing because their injuries were not traceable to defendants' actions, and that their claims were barred by the political question doctrine.
The United States Fish and Wildlife Service (the "Service") is accepting public comments through November 23, 2009, on its proposed Strategic Plan for Climate Change ("Strategic Plan") and accompanying 5-Year Action Plan ("Action Plan"). Both Plans are part of the Department of the Interior's (the "Department's") commitment to organizing a Department-wide effort to protect the country's water, land, fish and wildlife against the effects of global warming. The Service developed the Plans to provide the basic framework for and specific details of its overall strategy for working with others to "ensure the sustainability of fish, wildlife and habitats in the face of climate change." The Strategic Plan lays out the Service's general climate change goals whereas the Action Plan identifies specific actions the Service will take to accomplish those goals.
The EPA Uses the Clean Air Act to Propose New Rules Intended to Reduce GHG Emissions from Large Emitters
By Kyndra Joy Casper
In a move certain to fuel the debate over climate change legislation in Congress, the U.S. Environmental Protection Agency (the "EPA") recently revealed a new proposal to regulate greenhouse gas ("GHG") emissions from power plants, factories and refineries, which are considered large GHG emitters. The regulations being developed would, for the first time, require the use of best available control technology (“BACT”) to compel large emitting sources to curb GHG emissions whenever a new facility is constructed or a major modification takes place. The proposal would require large industrial facilities that emit at least 25,000 tons of GHGs a year to obtain construction and operating permits. Small businesses such as farms, restaurants, and many other types of small facilities would not be included in these requirements. The EPA’s proposal signals that it will act under the existing authority provided by the Clean Air Act, meaning that if Congress does not pass a climate change bill, the EPA will act on its own to curb emissions.
By Brenna Moorhead
The California Natural Resources Agency (CNRA) led twelve state agencies in preparing the Draft California Climate Adaptation Strategy. The Strategy responds to the mandates of Executive Order S-13-08, which called for development of an adaptation strategy for addressing climate change. Consistent with the Order, the Strategy summarizes the best known science on climate change impacts, assesses the state’s vulnerability to these impacts, and outlines solutions to be implemented by state agencies to promote resiliency.
Legislative Update: Preparing For Battle Over the Federal Climate Change Bill, California and Other States Urge Passage of a Stringent Cap-and Trade Program That Preserves Broad State Regulatory Power
By Olivier Theard
While the health care debate is currently dominating the headlines, the federal climate change bill will be the next major legislative battle. The House of Representative passed climate change legislation in June, the centerpiece of which is a massive federal cap and trade program for greenhouse gas (GHG) emissions. The Senate is expected to consider the issue in the next legislative session. California has been at the forefront of the climate change issue, passing the Global Warming Solutions Act in 2006 which requires aggressive action to reduce GHG emissions to 1990 levels by 2020. True to its form, California has taken the lead in urging the Senate to pass a climate change bill that also preserves state authority to implement programs that complement any federal program.
The successful conclusion of the international climate change negotiations at Copenhagen at the end of 2009 is a key priority for the European Union (“EU”). In January 2009, the European Commission (“EC”) set out its proposals for a comprehensive and ambitious new global agreement to tackle climate change and how it could be financed in a communiqué entitled “Towards a comprehensive climate change agreement in Copenhagen COM(2009) 39” (the “EC Communication”). The EU’s goal is to limit global warming to less than 2°C above the pre-industrial temperature based on strong scientific evidence that climate change will become dangerous beyond this point. The EC Communication addresses some of the key global challenges including targets and actions, financing, and building an effective global carbon market.
California Adopts First Low-Carbon Fuel Standard to Reduce Greenhouse Gas Emissions from Transportation Fuels
On April 23, 2009, the California Air Resources Board (CARB) approved the first low-carbon fuel standard (LCFS) in the nation. Designed to help meet the greenhouse gas emission (GHG) targets established by the Global Warming Solutions Act (AB 32), beginning in 2011, the regulation requires producers and importers of transportation fuel to reduce the average carbon content of fuel sold in California on an annual basis, with a total reduction of at least 10 percent by 2020.
The rules governing regional planning changed dramatically when Governor Schwarzenegger signed Senate Bill 375 (SB 375) into law last year. Whatever the ultimate outcome, interested parties throughout California—from regional transportation agencies to local governmental agencies to land developers—will need to work in this dramatically new world and make the best of it together. This article addresses some of the key elements of SB 375, discusses potential issues, and describes the opportunities presented to interested parties and stakeholders to get involved in the process to protect their interests at an early stage.
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For further information, please contact Judy V. Davidoff at (415) 774-2993 and Daniel P. Bane at (714) 424-8246.
As if legal efforts to address climate change weren’t complicated enough, a recently released study by the Peterson Institute for International Economics warns that U.S. Congressional efforts to reduce climate change could run afoul of international trade rules under the General Agreement on Tariffs and Trade (GATT), leading to years of legal disputes in the World Trade Organization.Continue Reading...
Effects to plant and wildlife species and habitat attributed to global climate change have implications for how the federal government administers and complies with the Endangered Species Act. Two recent administrative actions taken by the U.S. Fish and Wildlife Service and National Marine Fisheries Service present the latest examples of how those agencies grapple with how, or whether, to address anthropogenic greenhouse gas (GHG) emissions and climate change-related effects under the ESA.
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In a budget President Obama described as “a blueprint for our future,” the Administration proposed a cap-and-trade system to reduce greenhouse gas emissions approximately 14 percent below 2005 levels by 2020, and approximately 83 percent below 2005 levels by 2050. These proposals were detailed in the fiscal year 2010 budget outline delivered on February 26, 2008. Cap-and-trade programs have been used in the U.S. to reduce air pollutants like sulfur and nitrogen oxides that cause acid rain and smog, and Europe has a cap-and-trade system for carbon emissions. Under such programs, industries must meet a government-specified cap on total emissions, but individual facilities could trade credits in a new market. For example, a plant that emits less than its allotment can sell credits to others that exceed their allowances.
On January 27, 2009, the California Air Resources Board (“CARB”) will hold a public workshop concerning the AB 32 Administrative Fee Regulation. CARB has invited all stakeholders to provide input into the development of a fee structure that will support the administration of programs pursuant to AB 32, California’s landmark global warming legislation.
In December 2007, the California Air Resources Board passed regulations requiring operators of facilities that emit 25,000 metric tons of CO2 or more in a calendar year to report their greenhouse gas emissions. The regulations became effective January 1, 2009.
The world of chemical regulation is changing dramatically. Recent laws point to a paradigm shift whereby the old model — essentially a “wait and see” approach in which chemical health risks were analyzed after someone complained about an injury allegedly caused by that chemical — is giving way to a new model whereby chemical risks are analyzed in advance of exposure in an effort to minimize future harm. The result will have profound consequences for businesses as regulators compile more “up front” environmental and health risk information about products, potentially resulting in manufacturers shifting the manner in which products are designed. The new laws may also have consequences in products liability litigation, as green chemistry standards may bear on legal causation issues in tort cases.
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For further information, please contact Olivier F. Theard at (213) 617-5427.
Climate change is triggering a paradigm shift in the manner in which we protect our environmental resources, leading to changes in environmental policy, regulations and business and consumer decision-making that benefits society at large.
The following article by Randolph Visser, Olivier Theard and Amy Romaker was originally published in the Los Angeles Daily Journal. To read the article please click here.
In recent years, “global warming” has vaulted into the mainstream, becoming arguably the most significant economic and social issue of our time. Declaring that “global warming poses a serious threat to the economic well-being, public health, natural resources, and environment of California,” the California legislature passed the Global Warming Solutions Act of 2006 (otherwise known as AB 32), which requires that California reduce its emissions of greenhouse gases to 1990 levels by 2020.
The following article by Polly Towill and Olivier Theard was originally published in the California Environmental Insider. To read the article please click here.
An ethanol boom spurred by federal funding, private investment and intense farm lobby support is now quickly fading. And many companies may find themselves bankrupt after the impending shake-up of the ethanol industry, lawyers say.
The following article which features quotes by Edward Schiff and Edward Tillinghast was originally published in EnergyLaw360. To read the article please click here.
Sheppard, Mullin, Richter & Hampton is the latest firm to create a practice group around global climate change, which partners say is bound to affect existing clients — and potential new ones.
“I believe that our climate change practice will impact 80 to 90 percent of existing clients in one way or another,” said Randolph Visser, the co-leader of the new group. “Climate change issues cut across virtually every industry that exists today.”
The following article by Randolph Visser and Elizabeth McDaniel was originally published in The Recorder. To read the article please click here.