December 31, 2011 01:01
NOAA reported that 2011 was one for the record books: 12 weather and climate-related disasters each causing over $1 billion in damage. One might expect (or hope) that a national climate change policy would be coming into place to prevent repeating or setting a new record. One would be disappointed. U.S. climate policy is "uncertain," to quote Michael Morris, CEO of American Electric Power, "dysfunctional" is the word applied by Resources for the Future, "hamstrung" is how the chief UN climate change negotiator and Executive Secretary of the UNFCCC, Christiana Figueres, calls it.
We don't disagree with these viewpoints; they are accurate. But if a response to climate change is the goal, it is worse than these commenters are acknowledging because not only has Congress shown that it is incapable of getting anything done, other avenues are not delivering either. As the year expires we thought it might be helpful to sift through the year's detritus and assess the status of attempts to reduce carbon dioxide emissions, distinct from overt attempts like passing laws and adopting regulations.
1. Tax emissions - Some will remember our blog on the federal lawsuit brought by Mirant Corp. against Montgomery County challenging the County's tax on carbon emissions which fell only on Mirant. The County challenged the federal court's jurisdiction and won before the federal district court. In June, however, the Fourth Circuit reversed. With that Montgomery County folded its tent and abandoned its carbon tax.
2. Favor renewable energy - The inexorable scrutiny of the markets has proved the undoing of several former high-flying renewable energy ventures. Most well-known is the debacle with Solyndra LLC, whose well-publicized collapse generated scrutiny by the FBI and Congress. Others that have failed with less limelight in 2011 include numerous solar companies (Solar Millennium, Stirling Energy Systems, Evergreen Solar, Spectrawatt), as well as ventures in wind (Skycon), energy storage (Beacon Power), and biofulels (Range Fuels).
3. Impose liability for emissions of carbon dioxide - The results here are mixed. Everyone points to American Electric Power v Connecticut for the principle that for greenhouse gas liability claims the federal common law of nuisance has been displaced by federal regulation. They could equally point to Connecticut v AEP before the Second Circuit for the principle that the political question doctrine does not bar these types of claims or to the Fifth Circuit panel in Comer v Murphy Oil USA that held similarly. However, even if the cases are permitted to move forward, they face daunting problems in proof of causation.
4. Force state action to regulate carbon dioxide - We blogged last May and just this month about the tidal wave of litigation unleashed by Our Children's Trust, an Oregon environmental group that had orchestrated a dozen suits asserting the defendant States had an obligation under the public trust doctrine to restrain carbon dioxide emissions, as well as regulatory petitions in about 40 jurisdictions.
Time has not been good to OCT. First, its petitions have been denied by at least 23 agencies (Arkansas, Connecticut, Georgia. Hawaii, Idaho, Illinois, Iowa, Louisiana, Maine, Maryland, Michigan, Nevada, New Hampshire, North Dakota, Ohio, Oklahoma, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, and Wyoming). Where OCT filed lawsuits, three states (Arkansas, Minnesota and New Mexico) responded with motions to dismiss. The lawsuit against Montana was dismissed. In the federal lawsuit, the plaintiffs lost a motion to transfer.
5. Reach regional agreements - With great fanfare the Regional Greenhouse Gas Initiative was launched in 2005. Despite a recent study that claims significant economic benefit to the states in RGGI, its future success is unclear. New Jersey pulled out, New Hampshire tried to leave but the governor vetoed the bill. In New York, there is a court challenge.
6. Voluntarily trade carbon dioxide emissions credits - The only carbon exchange in North America came to an end in 2010 when the Chicago Climate Exchange closed its doors. A shadow of its former self, the CCX now registers verified emission reductions based on a comprehensive set of established protocols.
7. Develop carbon capture and storage - The most prominent project in the US came to a halt in July when American Electric Power concluded not to build a full-scale CCS plant at its Mountaineer, West Virginia plant. As noted above, AEP explained its decision as based on the uncertainty of US climate policy. The lack of direction in American climate change response hurts business. AEP walked away from a $300 million Department of Energy match. It didn't help that the Virginia consumer advocate, in successfully arguing against including CCS costs in the rate base, asserted: “Any potential benefit is speculative and outweighed by the enormous cost of the pilot project.”
Some may think no policy is the best policy. We think otherwise. Climate change is happening. There will be a response. All will benefit if that response is choreographed over time, rather than rushed into when political consensus ultimately concludes that something must be done NOW. Maybe in 2012? Happy New Year.
, Carbon Capture
, Chicago Climate Exchange
, Our Children's Trust
, One Beacon
, Range Fuels