The Problem With Using Economic Incentives to Reduce Water Use? People

Earlier this month, I noted that demand side management policies need to take human behavior into account if they are going to be successful.  The same is apparently true for policies to reduce water consumption in drought-stricken areas.  According to the Los Angeles Times, the Metropolitan Water District of Southern California provides economic incentives for certain water conservation measures, including installing water efficient toilets and ripping out grass to install landscaping that does not consume as much water.  Cordelia-detailsAll good, right?

Well, apparently the water savings from installing water-efficient plumbing is about 10 times greater than from removing grass from lawns.  However, having natural landscaping has now become the latest must-have among SoCal landowners, and everyone is applying for the rebate to remove their grass, thus rapidly exhausting the MWD budget for these types of rebates.  According to the Times, MWD General Manager Jeffrey Kightlinger explained the problem as follows:

The toilet is somewhere buried in your house. No one knows if you did the right thing or not.… People want that “Yeah, I did the right thing for the drought, and I want people to see it.”

We were willing to throw a bunch of money, even if it’s not maybe the most cost-effective tool. I think in the long run, changing that mindset is going to pay off.  If it was just saving water, we’d have preferred to put everything, every dollar into devices.

Maybe the MWD should pay some well-known designer to develop a low consumption toilet that everyone in fashion-conscious SoCal will want to buy.

The D.C. Circuit Sends EPA Back to the Drawing Board to Fix Its Transport Rule Emissions Budgets

The Clean Air Act’s good neighbor national_good_neighbor_day_zps2a06b34b (1)provision prohibits upwind states from emitting air pollutants in amounts that will “contribute significantly to nonattainment” of a national ambient air quality standard in a downwind state.  On Wednesday, the D.C. Circuit Court of Appeals held that, while upwind states have to be good neighbors, EPA cannot force them to be extraordinarily super-special neighbors.  Just good enough will have to do.

Following the Supreme Court’s decision affirming EPA’s Transport Rule against facial challenges in EPA v. EME Homer City Generation, the Supreme Court remanded the case to the D.C. Circuit for consideration of as-applied challenges.  Various upwind states argued that the Transport Rule went too far, by requiring emissions reductions that were not necessary to attain compliance with NAAQS in downwind states.  The Court agreed.  As the Court noted, the opinion in EME Homer City stated that:

EPA may not require “an upwind State to reduce emissions by more than the amount necessary to achieve attainment in every downwind State to which it is linked.”

Since EPA did not defend the budgets on the ground that they were the minimum necessary to ensure NAAQS attainment in downwind states, the Court gave EPA short shrift in its policy arguments trying to justify the budgets.  The Court must have repeated the quote from EME Homer City about a half-dozen times.  It viewed EME Homer City as leaving EPA no room to deviate from the minimum necessary formulation.

EPA did win two small victories.  First, with respect to the 2014 emissions budgets, the Court remanded without vacatur, an approach becoming more and more common in these cases.  That leaves the 2014 budgets in effect, but EPA still has very little wiggle room.  It is pretty clear going forward that EPA’s emissions budgets under the Transport Rule are going to have to be the minimum required to result in NAAQS attainment in the downwind states.

The Court also rejected various remaining challenges to the Transport Rule.  This is certainly good news for EPA, but all of those challenges were doomed from the get-go, so EPA can’t be too excited.  This case was all about the emissions budgets on remand, and the loss has to hurt.

EPA Hubris, July 2015 Edition

Anyone who reads this blog must have seen the explosion of reports in the trade press that EPA ignored significant criticism from the Army Corps of Engineers in promulgating its Waters of the United States rule.  I have not seen the memoranda, but, based on the press reports, it appears that EPA ignored criticism both that it was too stringent in some areas and that it was not sufficiently stringent in others.  If EPA’s purpose wasn’t simply to make the rule more – or less – stringent, why did it ignore the Corps and try to bury the disagreement?

How about hubris?

I noted earlier this year and as far back as 2010, EPA’s tendency towards self-righteousness.  I also pointed out how counterproductive that self-righteousness is; it makes it more difficult for EPA to achieve its goals.  While I still think that EPA is self-righteous, hubris seems the apt description today.

DOE Releases Draft Environmental Impact Statement for Northern Pass Project

The U.S. Department of Energy (DOE) recently released a Draft Environmental Impact Statement (DEIS) for Northern Pass Transmission, LLC’s proposed 187-mile transmission line across the United States-Canada border in New Hampshire.

If approved, the line would have the ability to deliver 1200 MW of hydroelectric power from Quebec into southern New England—a potentially tantalizing amount of power for policymakers seeking to diversify the region’s generation portfolio and lower its GHG emissions. At the same time, it may have unintended consequences such as causing existing zero-emission nuclear facilities to retire prematurely as market-clearing prices in the region decrease.

More

The Earth Once More Spins Calmly On Its Axis; EPA’s Updated Hex Chrome MACT Rule Is Affirmed

On Tuesday, the D.C. Circuit Court of Appeals affirmed EPA’s update of its hexavalent chromium Hex chromeMACT rule.  Suffice it to say that this was a little easier than review of the power plant MACT rule.

The Court rejected both industry and environmental group challenges, in what was largely a straightforward application of Chevron.  The opinion is nonetheless useful in laying out what EPA must have in the record to justify ratcheting down MACT standards.

The key element was the Court’s rejection of the industry position that EPA must identify how each specific “development” that has occurred since the prior promulgation of the applicable MACT standard is tied to the new standard:

It suffices for EPA to assess and discuss the collective impact of the developments it has identified, and to revise standards appropriately in light thereof. The agency explained that it had examined what emissions levels could be achieved using various add-on control devises and fume suppressants, including developments the agency had previously identified. EPA went on to provide details regarding the costs and emissions reductions identified, and evaluated in the course of arriving at its conclusion that specified, best-available control technologies could cost-effectively meet more stringent emissions standards. The statute does not require EPA to identify a nexus between each distinct development and the revised standards. EPA’s decisionmaking was sufficiently clear and rational.

Game over.

Two Strikes and Oklahoma’s Out (For Now): Another Challenge to the Clean Power Plan Is Rejected

On Friday, Judge Claire Eagan dismissed Oklahoma’s latest challenge to EPA’s Clean Power Plan.  ghg-chartYes, that plan.  The one that hasn’t been promulgated yet.

Following rejection  by the D.C. Circuit Court of Appeals of a prior law suit, Oklahoma tried again, this time on what it presumably hoped would be more friendly ground, the Northern District of Oklahoma.  Not so much.

At this point, Oklahoma was facing a judge who knew that the D.C. Circuit had already concluded that EPA has not yet taken final agency action.  Moreover, district courts have no jurisdiction to hear challenges to EPA Clean Air Act rulemaking.  Oklahoma tried to get around all this by arguing that EPA’s action in proposing the rule was ultra vires, justifying immediate suit in the District Court.  I don’t think so.  Even if EPA’s authority is questionable – an issue that will obviously be litigated when the final rule is promulgated – there’s a big difference between being wrong and acting ultra vires.

As Judge Eagan noted:

Plaintiffs’ claims are exaggerated. The D.C. Circuit noted that the EPA is expected to announce a final rule this summer, and there is no reason to believe that plaintiffs will have to wait for long before renewing proceedings in the D.C. Circuit if they intend to challenge the final rule. Plaintiffs can request a stay of any final rule issued by the EPA to avoid incurring costs while litigation is pending. The Court also finds that plaintiffs’ argument concerning the EPA’s authority to promulgate emission standards for coal-fired power plants pursuant to § 7411(d) simply highlights the complex nature of the CAA’s regulatory and administrative scheme….

I’m sorry, but this case was absurd.  I’m sure EPA wishes that it were possible for the prevailing party to be awarded its fees.  If ever there were a case in which it would be justified, this was it.

The Baker Administration looks to Hydropower to meet GHG goals

The Baker Administration announced on July 9 that it filed a bill for sourcing long-term hydroelectric power in the Commonwealth.  Hydroelectric power currently provides a small portion of electricity consumed  in Massachusetts. According to the Energy Information Administration, it ranks behind natural-gas, nuclear, coal and other renewable energy sources.

The bill, titled “An Act Relative to energy sector compliance with the Global Warming Solutions Act,” would require the State’s electric distribution companies  to solicit proposals for hydroelectric contracts spanning 15 to 25 years.  Such solicitations would begin no later… More

The 10th Circuit Affirms Colorado’s RPS; The Dormant Commerce Clause Remains Dormant

When Colorado enacted a referendum petition strengthening its renewable portfolio standard, the Energy and Environment Legal Institute sued, arguing that the RPS violates the dormant commerce clause, because it harms out-of-state coal producers. The 10th Circuit Court of Appeals, in an opinion by Neil Gorsuch (son of the EPA former administrator), disagreed.  Pretty much telegraphing the outcome in the first sentence, Judge Gorsuch framed the question as follows:

Can Colorado’s renewable energy mandate survive an encounter with the most dormant doctrine in dormant commerce clause jurisprudence?

The answer, of course, was no.

The opinion includes a readable and reasonably concise explication of the dormant commerce clause.  Judge Gorsuch cogently summarizes the doctrine’s limitations.  As to why it failed here, the essence is that:

To be sure, fossil fuel producers like EELI’s member will be hurt. But as far as we know, all fossil fuel producers in the area served by the grid will be hurt equally and all renewable energy producers in the area will be helped equally. If there’s any disproportionate adverse effect felt by out-of-state producers or any disproportionate advantage enjoyed by in-state producers, it hasn’t been explained to this court. And it’s far from clear how the mandate might hurt out-of-state consumers either.

The decision may be fairly obvious, but that doesn’t mean it is unimportant.  If the Colorado RPS had been struck down, most, if not all, other state RPSs would have been in serious jeopardy.  However, it looks as though we can let sleeping clauses lie.

CERCLA Statute of Limitations Applies To Contribution Claims By A Party to a Private Settlement

Sometimes cases seem to be deciding issues that are so obvious it’s hard to figure out why they get any serious attention from the courts.  One such case is ASARCO, LLC v. Celanese Chemical Company recently decided by the Ninth Circuit.  That decision affirmed the lower court’s unsurprising ruling that, when a private party agrees to perform response actions or pay response costs in a private party settlement under CERCLA, any claims that the settling party can assert against third parties for contribution are subject to CERCLA’s three year statute of limitation.

The Ninth Circuit decision also confirms the equally unsurprising proposition that when the scope and amount of an earlier Superfund settlement is clarified in a subsequent bankruptcy proceeding, that clarification does not re-start the statute of limitations for contribution claims that had already run.   While bankruptcy proceedings may be a means of discharging claims against a debtor, those proceedings are not a fountain of youth that can reinvigorate the debtor’s stale contribution claims.

The Third Installment of Our Paris Climate Change Negotiations Tracker

The third installment of our Paris climate change negotiations logotracker is available.  This may sound like a broken record, but there was not a lot of progress made in the Bonn talks earlier this month and it’s looking more and more as though it’s going to be difficult to reach a major substantive agreement in Paris.

 

 

 

The Problem With Relying on Energy Efficiency to Reduce Emissions? People

The connection between energy use and emissions of air pollutants, including GHGs, is uncontroversial.  It is also widely, if not universally, accepted that there is a lot of low-hanging fruit in energy efficiency.  I agree completely with both propositions.

Nonetheless, a recent article in Energy Research & Social Science (fee required for full article), reported in Tuesday’s Washington Post, provides a useful — and somewhat humorous — note of caution.  The article concerns how people use thermostats.  We’re not even talking smart grid stuff here; just programmable thermostats.

According to the article, 40% of programmable thermostat owners don’t actually program them, and 33% have overridden the programming features.  And here’s my favorite, from the Post story:  approximately one-third of those studied

believed in the myth that “turning down the thermostat at night or when people are not at home used more energy than keeping the house at the same temperature all the time.”

Energy efficiency is obviously an important element of an overall program to reduce emissions of GHGs and other pollutants from power generation.  However, designers of energy efficiency programs probably should spend some time studying human behavior if they want to design programs that actually work.

The Ninth Circuit Reminds Us — Again — Just How Powerful the Endangered Species Act Is

On Tuesday, the 9th Circuit Court of Appeals affirmed the Commerce Department’s designation of critical habitat for the southern distinct population segment of green sturgeon, green sturgeon aggfsfgsdfgsgonce again reminding us just how difficult it is to fight city hall – or the capital – where the ESA is concerned.

Section 4 of the EPA provides that

The Secretary shall designate critical habitat . . . on the basis of the best scientific data available and after taking into consideration the economic impact, the impact on national security, and any other relevant impact of specifying any particular area as critical habitat. The Secretary may exclude any area from critical habitat if he determines that  the benefits of exclusion outweigh the benefits of specifying such area as part of critical habitat, unless he determines, based on the best scientific and commercial data available, that the failure to designate such area as critical habitat will result in the extinction of the species concerned.

The court concluded that, while the Secretary must take “into consideration the economic impact” of a potential designation, this obligation is separate from the completely discretionary choice whether to exclude an area from designation based on a cost-benefit analysis.  The Court further concluded that the record supported the Department’s assertion that it did take “into consideration” the costs of a designating habitat.  Thus, the appellants could get no relief under the first sentence of Section 4.

In addition, the use of the word “may” in the second sentence means that the decision whether to exclude areas from designation is “committed to agency discretion by law” – and is thus unreviewable.

It’s easier to fight City Hall than ESA critical habitat designations.

Easy Cases Make Good Law: The Third Circuit Affirms EPA’s Chesapeake Bay TMDL

On Monday, the Third Circuit Court of Appeals affirmed EPA’s TMDL for the Chesapeake Bay.  chesapeake-bayThis should not be news.  Although Judge Ambro comprehensively disposed of the appellants’ arguments in a thoughtful opinion, I think that the opinion probably could have been six pages rather than sixty.

The crux of the challengers’ arguments was that a TMDL must consist of a single number specifying the amount of a pollutant that a water body can accommodate without adverse impact.  The Court agreed with EPA that such is not the case.  The main points include:

  • The TMDL review is governed by Chevron and this is particularly so “where an agency is charged with administering a complex statutory scheme requiring technical or scientific sophistication” – as was certainly the case here.
  • Because the very point of TMDLs is to address water bodies where point source controls are not sufficient to attain water quality criteria, EPA had authority to allocate the TMDL among point sources and non-point sources.
  • EPA also had authority to impose deadlines for attaining water quality standards. As the court stated:

it is more consistent with the purpose of the Clean Water Act to express the deadline that the EPA relied on in calculating the TMDL than to make states and the public guess what it is.

  • It was appropriate for EPA to require states to provide “reasonable assurance” that their Watershed Improvement Plans will meet their goals.
  • The TMDL does not unconstitutionally infringe on local land use regulatory authority. This argument was borderline silly.  “Regulation of the channels of interstate commerce lies at the very core of Congress’s commerce power.”  The Chesapeake Bay TMDL is not the regulation of a man-made ditch; it’s the largest estuary in North America and is certainly, as the court noted “navigable in fact.”

As I noted last year, the most perplexing – and disturbing – element of this litigation is that 21 states filed amicus briefs on behalf of the American Farm Bureau Federation, the lead plaintiff, arguing that the TMDL was inconsistent with the notion of cooperative federalism and improperly infringed upon states’ authority over local land use.  How could that challenge even make sense, let alone succeed, when EPA developed the TMDL in conjunction with the states directly affected by it?

Can the Majority and the Dissent Both Be Wrong? The Supreme Court Remands the MATS Rule

The short answer is, yes, though the majority is more wrong.

In fact, the issue in Michigan v. EPA seems so simple that the MATS rule could have been affirmed in a two-page opinion.  Judge Scalia notes that the word “appropriate” – on which the entire 44 pages of the majority, concurring, and dissenting opinions focus – is “capacious”.  capaciousI agree.  If so, and if Chevron means anything, “appropriate” is surely capacious enough to allow for an interpretation that does not include cost considerations.  That should have been the end of the case.

I do feel compelled to note, however, that Justice Kagan’s dissent also got it wrong, in at least three ways:

  • I think she’s flat wrong to suggest that, because the MATS “floor” is based on the top 12% of facilities already in operation, that means that establishment of the floor already takes cost into account. As Justice Scalia cogently notes, those existing facilities may well have been under their own regulatory duress – a duress that may not have considered cost.
  • Justice Kagan confuses cost-benefit analysis and cost-effectiveness analysis. For any given goal sought by EPA, the various options provided by the MATS rule may allow power generators to attain the goal in the most cost-effective means possible, but if even the most cost-effective approach were to yield $10B in costs and $10M in benefits, that would fail the cost-benefit test for most people.
  • Finally, and most importantly, Justice Kagan got the consequences wrong. Instead of suggesting, as she did, that the majority decision

deprives the American public of the pollution control measures that the responsible Agency, acting well within its delegated authority, found would save many, many lives,

she should have made the point that the majority decision will have no impact on EPA or the MATS rule.  The Supreme Court did not vacate the rule; it merely remanded the rule to the Court of Appeals.  Justice Kagan’s position should have been that EPA still has sufficient discretion, even on the existing record, to defend the MATS rule within the confines of the majority opinion.  Instead, Justice Kagan gave ammunition to those who oppose the rule, by suggesting that it cannot be saved.

A pox on both their houses.

Do Climate Change and Same-Sex Marriage Have Anything in Common?

Recent events have me pondering this question.

Most notably, in two court decisions last week, courts ordered the State of Washington and the government of the Netherlands to take more aggressive action against climate change.  In the Washington case, in response to a complaint from eight teenagers, a trial court judge has ordered the Washington Department of Ecology to reconsider a petition filed by the teenagers requesting reductions in GHG emissions.  Similarly, in the Netherlands, a court ordered the government to reduce GHG emissions by 25% within five years.  The Dutch case was brought under human rights and tort law, not under existing Dutch environmental laws.

I have been very skeptical of the use of nuisance-type litigation to require more aggressive government regulatory efforts.  I still think comprehensive market-based regulation is the best approach.  However, in the absence of aggressive action in the United States and world-wide, these suits are going to increase in number.

So, how are they similar to the same-sex marriage issue?  First, as noted in Obergefell, courts were initially – and for some time – not just unfriendly to litigation efforts in support of same-sex marriage, they were positively dismissive.  Second, there is the gradual increase over time in the litigation.

Next, there is also the change over time in the scientific understanding of the issues.  While same-sex marriage has always been, on both sides, primarily a moral issue, it would be wrong to ignore the role that an increasing understanding of the genetics of sexual preference has played in the debate.  Similarly, the move towards an overwhelming weight of evidence, not just that climate change is occurring, but that it is anthropogenic, has obviously been important to the climate change debate.

Finally, while the moral issues in same sex marriage may seem to distinguish it from the climate issue, the recent papal encyclical makes clear that there are moral aspects to the climate change debate as well.

I have no crystal ball.  I do not know whether we are going to see a groundswell, and then, perhaps, a tidal wave that will somehow overcome the gridlock in United States and world politics on climate change.  There are differences in the two issues, most obviously in the short-run economic costs of addressing climate change.  Nonetheless, I do know that it wouldn’t surprise me if the tidal wave comes, and relatively soon.

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