Jenner & Block

Climate Change Update Resource Center

As a service to Jenner & Block's clients and the greater legal community, the Firm's Climate and Clean Technology Law practice maintains this online resource center that offers the latest case law and other developments in climate change.

Please also visit the Firm's Environmental, Energy and Natural Resources Law practice website for information about our capabilities, and our Corporate Environmental Lawyer Blog for current developments in this area.

Jenner & Block will update this web  page with new developments and items of interest as they become available.  For further information, please contact Partner Gabrielle Sigel.

Federal Litigation Developments

Automakers File Motion to Dismiss Global Warming Nuisance Claim.

On December 15, 2006, attorneys for General Motors Corp., Ford Motor Co., Toyota North America Inc., Honda North America Inc., Chrysler Motors Corp., and Nissan North America, Inc. filed a motion to dismiss the complaint in California v. General Motors Corp., N.D. Cal., No. C06-05755.  California Attorney General, Bill Lockyer, had filed suit against the automakers on September 20, 2006, in the U.S. District Court for the Northern District of California.  According to the complaint, the defendants’ vehicle emissions created a public nuisance because the emissions contributed significantly to global warming, which has harmed California, its environment, its economy and the health and well-being of its citizens.  The state seeks  monetary damages and asserts that the automakers are jointly and severally liable under both federal common law and California law, but did not allege violations of federal statutes, such as the Clean Air Act.  The defendants' motion to dismiss argues that global warming is an important international issue that must be handled by governments acting through treaties and legislation as opposed to litigation in federal courts.  The automakers also argue that the State of California's complaint attempts to interfere with federal laws, such as the Clean Air Act and the Energy Policy and Conservation Act, that regulate new-vehicle fuel economy and emissions.  The defendants assert that the lawsuit is frivolous and meritless and should, therefore, be dismissed.

International, Advocacy Groups, & Business Developments

Airlines Servicing the European Union Face Increasing Fees.

On December 6, 2006, United Kingdom (“UK”) Chancellor of the Exchequer, Gordon Brown, announced that the UK will increase taxes on air travel in an effort to deter air travel and reduce GHG emissions.  Air passenger duties will double across the board for flights departing from the UK.  The duty for flights within the UK and the European Union (“EU”) increased from £10 to £20 for economy tickets and from £20 to £40 for business class tickets.  The duty for flights from the UK to countries outside of the EU will increase from £20 to £40 for economy tickets and from £40 to £80 for business class tickets.  The duty increases will become effective on February 1, 2007. 

In another move that may increase air travel costs, on December 20, 2006, the European Commission proposed an amendment to EU Directive 2003/87/EC that would require any airline flying into or out of EU airports to participate in the EU Emissions Trading Scheme (“ETS”).  The EU ETS is an international carbon dioxide trading system that commenced operations in January 2005.  Under the proposed legislation, airlines would be given carbon allocations and the opportunity to buy additional carbon credits through an auction the year before the legislation would take effect.  Airlines would also be able to trade allowances with other sectors under the ETS.  Airlines would be required to track and report their emissions on a yearly basis.  This proposal applies to all airlines flying in or out of EU nations, regardless of the country of origin.  U.S. airlines and government officials have already voiced criticism of the proposal.  The Air Transport Association, a trade group that represents most U.S. airlines, has stated that it believes the proposal would violate international law.  Likewise, James Connaughton, chairman of the White House Council on Environmental Quality, stated that he believed the proposal would violate international trade rules.  If the proposed amendments are approved, flights between EU nations will be required to participate in the ETS starting in 2011, and flights to or from other countries will have to participate starting in 2012. 

Please click here to access the European Commission's proposed amendment.

EU Trade Commissioner Proposes Zero Tariff Agreement for Green Technologies.

On December 18, 2006, EU Trade Commissioner, Peter Mandelson, made a speech in which he announced plans to establish zero tariffs for technology that promotes the reduction of GHG emissions.  Mandelson stated that one way to reduce GHG emissions is to create an open global market for environmental technologies and maximize exchange and trade in those technologies.  To this end, Mandelson urged the EU and other members of the World Trade Organization (“WTO”) to conduct negotiations designed to establish zero tariffs for key environmental goods and technologies.  Mandelson acknowledged that past WTO negotiations in this area were stalled by arguments over the definition of goods or technologies that would be given the zero tariff.  In response, he encouraged WTO members to continue negotiations and focus on industries and technologies, such as clean power generation or renewable energy, that have a specific link to climate change.

Federal Regulatory Developments

U.S. Fish & Wildlife Service Proposes Listing Polar Bears as a Threatened Species.

On December 27, 2006, the U.S. Fish & Wildlife Service (“FWS”) submitted a proposed rule to list the polar bear as a threatened species under the Endangered Species Act (“ESA”).  FWS expects the proposed rule to be published in the Federal Register on January 11, 2007.  The U.S. polar bear population currently consists of approximately 4,700 polar bears in Alaska and between 20,000 and 25,000 polar bears worldwide.  Interior Secretary Dirk Kempthorne announced that FWS is concerned that polar bear habitat, primarily sea ice in the Artic Sea, is melting as a result of global warming.  According to FWS, polar bears are almost completely dependent on sea ice for their sustenance and any change in sea ice will have an effect on the number of polar bears and their prey.  Based on the best available scientific and commercial evidence, FWS has concluded that protecting the polar bear as a threatened species under the ESA is appropriate.  Once the proposed rule is published in the Federal Register, there will be a 90-day period for the public to submit comments to FWS. 

The proposed rule is the result of a lawsuit filed in the U.S. District Court for the Northern District of California on December 15, 2005, by the Natural Resources Defense Council, Greenpeace, and the Center for Biological Diversity, alleging that polar bears are losing crucial habitat as a direct result of global warming.  The lawsuit resulted in a settlement on June 28, 2006, in which FWS agreed to decide, by December 27, 2006, whether to list the polar bear as a threatened species under the ESA.  The groups want FWS to take action to reduce greenhouse gas (“GHG”) emissions in order to reduce the effects of global warming, which include the melting of polar bear habitat.  The ESA requires FWS to create a recovery plan for threatened or endangered species and gives FWS the power to prohibit actions that harm a listed species or its habitat, which could arguably include regulating GHG emissions.  Although FWS is given the power to regulate under the ESA, it is also given discretion to issue regulations that the Interior Secretary deems necessary and advisable to provide for the conservation of threatened species.  Kempthorne has stated that broad regulations aimed at reducing GHG emissions are beyond the scope of the ESA and the listing of the polar bear.  Therefore, even if the polar bear is listed as a threatened species, given FWS’s current position, it is unlikely to create any new regulatory controls on GHG emissions.

Please click here to access the FWS's proposed rule.

State and Regional Developments

New York Releases Draft Regulations to Implement the Regional Greenhouse Gas Initiative.

On December 5, 2006, the New York Department of Environmental Conservation released draft regulations that would implement the Regional Greenhouse Gas Initiative (“RGGI”).  RGGI includes seven Northeastern states: New York, Vermont, New Hampshire, Maine, Connecticut, New Jersey, and Delaware.  The RGGI is a regional initiative designed to lower carbon dioxide emissions from power plants.  The participating states will cap emissions from power plants beginning January 1, 2009 at then current levels.  That cap will continue until 2015, at which point the states will begin reducing emissions to achieve a 10 percent reduction by 2019.  One significant proposal in New York’s draft regulation involves allocation of emissions allowances to power plants.  When other types of emissions allowances have been allocated in the past, for example in the case of sulfur dioxide emissions, regulators dispense allowances at an amount proportional to current levels of emissions.  The New York regulations would allocate 100 percent of its emissions allowances through an auction.  Proceeds from the auction would be used to promote energy efficiency and clean energy technology.  If the regulations are enacted, it would be the first time in this country that a 100 percent auction of allowances was used in a cap-and-trade program.  The proposed regulations are opposed by New York’s power producers.  The power companies argue that a 100 percent auction is an untested allocation method, which may have unforeseen cost and reliability impacts on electricity supply.  

Please click here to view a copy of the proposed regulations.

California Utility Company will Allow Customers to Offset Energy-Related GHG Emissions.

On December 14, 2006, California state regulators approved Pacific Gas and Electric Co.’s (“PG&E”) voluntary ClimateSmart program.  The ClimateSmart program, which PG&E plans to launch in spring 2007, will offer residential and business customers the opportunity to offset their GHG emissions and make their homes and businesses “climate neutral.”  Under the ClimateSmart program, PG&E customers can choose to pay a monthly fee based on their use of natural gas and electricity.  The fees will be used to fund environmental projects that reduce GHG emissions, such as forest restoration projects.   PG&E plans to enroll itself as the first member of the ClimateSmart program.  It has committed over $1 million of shareholder funding over the next three years to offset the emissions created by energy use at the company’s offices, service centers, maintenance facilities and other company buildings.  The average PG&E customer uses energy, in the form of electricity and natural gas, which creates 5.3 tons of carbon dioxide to be emitted each year.  In order to offset this amount of emissions, the average customer that participates in the ClimateSmart program will pay $4.31 per month.  PG&E estimates that, in the first three years, the ClimateSmart program will create carbon dioxide emissions equivalent to taking 350,000 cars off the road for one year. 

Please click here to view more information about PG&E's ClimateSmart program.