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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.
On December 5, 2007, the Senate Environment and Public Works Committee voted 11-8 in favor of a cap-and-trade bill for greenhouse gas (“GHG”) emissions, S. 2191. S. 2191 was introduced by Senators Joseph Lieberman (I/D-CT) and John Warner (R-VA) on October 18, 2007, and passed through subcommittee on November 1. S. 2191 would cap GHG emissions at 70 percent of 2005 levels by 2050 in the electric power, natural gas, and industrial sectors. 22.5 percent of emission allowances would be auctioned in 2012, increasing to 70.5 percent in 2031. 42 percent of allowances are freely allocated (i.e., not auctioned) to companies in 2012, decreasing to zero in 2031. If S. 2191 is enacted, fuel suppliers must reduce the carbon per unit of energy in their fuel 5 percent by 2015 and 10 percent by 2020. S. 2191 has not yet been placed on the Senate calendar for consideration by the full Senate.
Senators Ask SEC to Issue Climate Risk Disclosure Guidance
On December 6, 2007, Senators Chris Dodd (D-CT) and Jack Reed (D-RI) wrote a letter to the Securities and Exchange Commission (“SEC”) asking it to issue guidance on how publicly-traded companies should disclose climate change risk in their disclosed financial documents. According to the Senators, the guidance should include: clarification that companies should assess the consequences of climate change or state why such an assessment is unnecessary; criteria for conducting such an assessment; which circumstances would merit disclosure; clarification that disclosure is required for material risk; plans on avoiding or mitigating adverse consequences of climate change.
Please click here to view the letter.
On December 19, 2007, President Bush signed into law the Energy Independence and Security Act of 2007 (“EISA”). EISA requires the National Highway Traffic Safety Administration to raise the corporate average fuel economy (“CAFE”) standard for cars and light trucks to 35 miles per gallon by 2020. CAFE standards had not been raised since their inception in 1975. Refiners will be required to use 9 billion gallons of ethanol in 2008, with 36 billion gallons required by 2022, a five-fold increase from current requirements. EISA includes several efficiency standards, including the phase-out of most incandescent light bulbs by 2012-2014 and requiring residential boilers to achieve 80 percent efficiency. EPA Administrator Stephen Johnson used EISA to justify denying California’s request for a Clean Air Act (“CAA”) waiver on December 19, 2007. See Section II.B. below.
Please click here to view the Energy Independence and Security Act of 2007 (EISA).
On December 5, 2007, Earthjustice (on behalf of Friends of the Earth, Oceana, the Center for Biological Diversity, and the Natural Resources Defense Council), California, Connecticut, the District of Columbia, New Jersey, New Mexico, New York, and Pennsylvania filed separate petitions asking the Environmental Protection Agency (“EPA”) to set GHG emissions standards for aircraft engines and develop measures to meet those standards. The Administrative Procedure Act allows interested persons to petition EPA to make rules. 5 U.S.C. § 553(e). Under the CAA, EPA must issue standards for air pollutants from aircraft engines if it finds that those air pollutants may reasonably be anticipated to endanger public health and welfare. 42 U.S.C. § 7571(a)(2)(A). Earthjustice’s petition also asks EPA to consider requiring airlines to participate in a cap-and-trade program. Both petitions ask EPA to respond within 180 days. If EPA does not respond, the petitioners may sue EPA to compel a response.
Please click here to view the Earthjustice’s petition.
Please click here to view the state's petition.
On December 19, 2007, EPA denied California’s request for a waiver under the CAA to implement GHG emissions regulations for automobiles. To implement any regulation of automotive emissions, California must request a waiver from EPA, which can deny the waiver if it finds that separate California regulations are not needed to “meet compelling and extraordinary conditions” as provided by section 209 of the CAA. California requested the waiver on December 21, 2005. On November 8, 2007, California sued EPA to force it to make a decision on the waiver request. In denying the waiver request, EPA Administrator Stephen Johnson found that California’s GHG emission regulations for automobiles are not needed to meet compelling and extraordinary conditions, noting that the regulations are unnecessary because EISA’s new CAFE standards would be more effective in reducing GHG emissions than individual state standards. On January 2, 2008, California sued EPA in the U.S. Court of Appeals for the Ninth Circuit to overturn EPA’s denial of the waiver request. EPA v. California, No. 08-70011. 15 states have intervened in California’s lawsuit.
Please click here to view California's petition.
On December 11, 2007, the U.S. District Court for the Eastern District of California upheld California’s GHG automobile emissions regulations, finding that they are not preempted by federal law. Central Valley Chrysler-Jeep Inc. v. Goldstene, No. CV F 04-6663 (E.D. Cal. Dec. 11, 2007). Automobile industry plaintiffs argued that California’s GHG regulations are effectively fuel economy standards, and the Energy Policy and Conservation Act (“EPCA”) prohibits states from setting their own fuel economy standards. The court rejected this argument, but California must still obtain a waiver from EPA before it can implement its regulations, which EPA, thus far, has denied. Automobile industry plaintiffs raised the same challenge to Vermont’s version of California’s GHG regulations in Green Mountain Chrysler-Plymouth-Dodge-Jeep v. Crombie, 508 F. Supp.2d 295 (D. Vermont 2007), and the court responded in the same way as the Central Valley court’s ruling. The Central Valley court relied heavily on both Green Mountain and the U.S. Supreme Court’s decision in Massachusetts v. EPA, 549 U.S. 1438 (2007), which held that EPA can regulate GHGs.
Please click here to view the opinion.
On December 21, 2007, the U.S. District Court for the District of Rhode Island rejected a motion to dismiss a suit by the automobile industry challenging Rhode Island’s GHG emissions regulations for automobiles, adopted from California. Lincoln-Dodge, Inc. v. Sullivan, No. 1:06-CV-00070. The automobile industry filed suit against Rhode Island on February 13, 2006. Rhode Island moved to dismiss the case on the ground that it was unripe for review, as EPA had not granted California its waiver request under the CAA (and consequently Rhode Island could not yet implement its own GHG emissions regulations). The court held that the suit was ripe, despite EPA’s December 19 denial of California’s waiver request, because California might still obtain that waiver through litigation, which would then allow Rhode Island to proceed with implementation of its regulations. The court has not yet addressed the automobile industry’s main argument on the merits that Rhode Island is preempted from adopting GHG emissions regulations.
On December 15, 2007, delegates to the 13th Conference of the Parties to the U.N. Framework Convention on Climate Change in Bali, Indonesia, agreed to the Bali Action Plan (“the Plan”), which sets 2009 as a deadline for creating a climate change strategy to succeed the Kyoto Protocol, which ends in 2012. The Plan does not include any specific emissions targets, but those targets, once developed, would apply to all countries, unlike the Kyoto Protocol, which had previously exempted large GHG emitters like India and China. The Plan had originally included a worldwide reduction goal of 25 to 40 percent below 1990 levels by 2020, but this language was removed on December 10. The parties will meet again in Poznañ, Poland, on December 1-12, 2008.
Please click here to view the Bali Action Plan.
On December 10, 2007, the U.S. announced that the next two Meetings of Major Economies on Energy Security and Climate will be held on January 30-31, 2008, in Honolulu, Hawaii, and in February, 2008, in Paris, France. Previously, on September 27-28, 2007, the U.S. hosted 17 major economies in an effort to develop a global GHG emissions reduction goal.
On December 19, 2007, the European Commission (“the EC”) published plans that would impose fines on automakers if their vehicles exceed an average emissions limit of 130 grams of CO2 per kilometer. The fine would begin in 2012 at 20 Euros ($28.80) per car per gram/kilometer over the limit, increasing to 95 Euros ($136.70) in 2015. The fine would affect all automobiles sold in the European Union, whether made by European companies or not. The EC had published a strategy document calling for a reduction of 120 grams of CO2 per kilometer by 2012. The plan to include a fine is a follow-up to the strategy document.
Please click here to view the European Commission's plans.
On December 17, 2007, the Iowa Climate Change Advisory Council (“the Council”) set 2005 as the baseline for measuring GHG emissions for Iowa. The Council will establish ways of reducing GHG emissions by both 50 and 90 percent below 2005 levels by 2050. It will also recommend interim GHG emissions reduction targets for 2012, 2020, and 2040. The Council comprises 23 governor-appointed voting members and four non-voting, ex-officio members from the Iowa General Assembly. The Council was established by SF 485 on April 27, 2007. The Council will meet again on February 8, April 11, and June 12, 2008.
Please click here to view The Council's Report.
On December 4, 2007, the Maryland Climate Change Commission (“the Commission”) released a report recommending that Maryland reduce economy-wide GHG emissions 90 percent below 2006 levels by 2050. The report set interim targets of 10 percent below 2006 levels by 2012, 15 percent by 2015, and at least 25 percent by 2020. The Commission comprises 18 executive members and 3 legislative members. The Commission was established by Executive Order on April 20, 2007. The Commission will meet again on January 17 and March 20, 2008, with the goal of completing an action plan by April 2008.
Please click here to view The Commission's Report.
On December 21, 2007, the Washington Climate Advisory Team released a draft report titled A Comprehensive Climate Approach for Washington (“the Report”). On May 3, 2007, Washington passed S. 6001, which set GHG emissions reduction targets for the state’s electric utilities. The Report provides 12 recommendations for meeting the targets, including creating a cap-and-trade program with binding GHG emissions limits. Governor Christine Gregoire (D) ordered the creation of the Report on February 7, 2007. Comments may be made by email, fax, or surface mail until January 22, 2008, at 5:00 pm. A final draft of the Report is due by February 7, 2008.
Please click here to view The Washington Climate Advisory Team's Report.
Please click here to make comments on The Washington Climate Advisory Team's Report.
On December 18, 2007, the FutureGen Industrial Alliance chose Mattoon, Illinois, as the site for the first power plant in the United States that can capture and store carbon dioxide (“CO2”)emissions. As planned, the power plant, a project funded by the Department of Energy, will use an integrated gasification combined cycle to produce power with near-zero CO2 emissions and will capture and store those emissions. The plant’s cost is currently estimated at $1.5 billion. The FutureGen Industrial Alliance is a non-profit consortium of 12 electricity and coal companies that will provide $400 million towards the cost of the power plant.