Actually, the science indicates that adaptation will be necessary regardless of how aggressively we are able to reduce greenhouse gas emissions. It’s only a matter of how much adaptation. A recent report by the U.S. Global Change Research Program found that the average air temperature in the continental U.S. has already risen by more than 2ºF over the last 50 years, a trend that is expected to continue. Impacts will include more frequent heat waves and high-intensity precipitation events, more prolonged droughts, and sea level rise, among other changes. Many sectors of the U.S. economy – and many aspects of the federal government – will be affected. To take just a couple of the most obvious examples, the U.S. Department of Interior owns one-fifth of the land in the country and 35,000 miles of coastline, making adaptation a critical aspect of its long-term management strategies. The Department of Health and Human Services must prepare for new health threats related to heat waves, changes in disease vectors etc.

In order to guide federal agencies in addressing these adaptation needs, the White House Council on Environmental Quality released Implementing Instructions for Federal Agency Climate Change Adaptation Planning on Friday. In short, these instructions require agencies to analyze their vulnerabilities to climate change and to develop an adaptation plan by mid-2012 which address impacts on “Federal services, operations, programs and assets.”  

A key question for many readers of this blog is whether these agency adaptation plans will translate into new federal regulation. While it is too early to tell exactly what form the plans will take, federal adaptation activities already underway mostly involve research, efforts to protect government property (e.g. National Parks), infrastructure (e.g. federal highways, levees), and services (e.g. hydropower generation, disaster relief) or outreach to support local adaptation efforts. A good summary of these ongoing activities is provided in a recent Pew Center report. 

On the other hand, it’s hard to imagine that this planning won’t ultimately result in some regulatory changes. For example, research on changing species distributions (see, for example, the Forest Service “Climate Change Bird Atlas”) is likely to have implications for regulation under the Endangered Species Act. Air and water standards intended to protect human health and ecological criteria can also be expected to shift to take climate change into account. For example, EPA’s water program has already developed a climate change response strategy which includes a mandate to evaluate effluent guidelines “to determine NPDES permitting needs and assess the need for new or revised technology-based performance standards.” Thus, the more adaptation that is required, the more the burden of compliance with this new type of “climate regulation” will fall to property owners, operators of industrial facilities, and others. Especially if the Obama Administration’s efforts to mandate reductions of greenhouse gas emissions at their source continue to be thwarted, it should get interesting when the voices of this new regulated community begin to be heard in Washington.

Certainly, the stakes are high. For example, the paper notes that by 2020, between 75 and 250 million people in Africa are expected to be exposed to increased water stress due to climate change. Other countries will face sea level rise, heat waves, droughts, floods, desertification, invigorated disease vectors. Moreover, actions to reduce GHGs cannot wait. According to the Hadley Center at the UK’s Meteorological Office, for every year that peak GHG emissions are delayed, the world is committed to another 0.5° C of warming.

While the environmental consequences of climate change may be clear, the legal and procedural issues are thorny. After reviewing the literature on international climate change litigation, the authors concluded that

international law is ill-equipped to deal with a complex situation such as global warming. The primary legal rules are vague and the majority of harm is yet to occur.

Some of the questions discussed in the paper are listed below. (To followers of the nuisance based claims being litigated in the U.S. courts, this list may sound awfully familiar.)

• What level of harm must be demonstrated? Is it sufficient to show a risk of significant harm?
• How would a claimant State demonstrate that the environmental harm caused by climate change is attributable to the accused State? Is each State actor responsible only for its share of the damage caused or are all States jointly and severally liable?
• What is the standard of proof for causation, and what is the role of the precautionary principle in lowering the standard of proof?
• The primary legal consequence when an international obligation has been breached is the discontinuation of the wrongful act. In the context of climate change, what quantity of GHG emissions must be reduced? Whose emissions? Under what time frame? What is the likelihood that an international organ such as the International Court of Justice would prescribe a remedy that would answer these questions?
• Does the UN Climate Convention represent a comprehensive scheme that precludes State vs. State litigation under principles of general international law?

Developing country governments may be understandably reluctant to challenge the actions of donor nations, but given the glacial pace of international climate change negotiations, the enormous stakes for certain countries, and the urgency of the issue, the paper suggests that we may see a State vs. State dispute in the not-to-distant future.

On the privacy side, the Smart Grid will greatly expand the amount of data that can be monitored, collected, aggregated and analyzed. For example, information about specific appliances and generators used by consumers can be tracked from the electric information “signatures” they produce. The driver of an electric vehicle will also leave an electrical roadmap of her travels. 

In response to these concerns, the National Institute of Standards and Technology (NIST) released guidance earlier this month entitled Smart Grid Cyber Security Strategy and Requirements. The three-volume guidance document is intended for “Smart Grid stakeholders” including vendors of energy information and management services, equipment manufacturers, utilities, system operators, network specialists and regulators. 

• Volume 1 presents a risk assessment framework and describes high-level security requirements;
• Volume 2 focuses on privacy issues in personal dwellings and recommends how entities that participate in the Smart Grid might address these issues; and
• Volume 3 is a compilation of supporting analyses and references.

Kudos to anyone who can decipher the NIST’s “Logical Reference Model” pictured below. Nevertheless, the guidance provides a useful framework for addressing these complex issues.

In late 2007, after the Cape Cod Commission denied its proposed Development of Regional Impact (DRI), Cape Wind applied to the EFSB for a “certificate of environmental impact and public interest” -- a composite of all of the individual state and local permits required for the construction of the 18.4 miles of transmission lines that will connect the wind farm to the regional power grid. This suit, brought by the Cape Cod Commission, the town of Barnstable, and the Alliance to Protect Nantucket Sound, challenged the EFSB’s May 2009 decision granting the certificate to Cape Wind. In short, the SJC held that the EFSB had the authority to grant the certificate and upheld the Board’s substantive findings, which balance the environmental impacts of the transmission lines with the need for the project. 

A key aspect of the decision is the SJC's rejection of the petitioners' arguments that the EFSB should have reviewed “in-State” impacts of the wind farm, which is permitted exclusively by Federal authorities, rather than focusing solely on the impacts of the transmission lines, which require state and local permits.  Essentially, if the project is built in federal waters, the EFSB can trust the feds to get it right, the majority said.

Chief Justice Marshall (joined by Justice Spina) dissented, issuing a stern warning:

The stakes are high.  As we have recently seen in the Gulf of Mexico, the failure to take into account in-State consequences of federally-authorized energy projects in federal waters can have catastrophic effects on state tidelands and coastal areas, and all who depend on them. 

The decision also includes a lively debate about the implications of the public trust doctrine and the Chapter 91 licensing scheme in this context.

Writing for the majority, Justice Botsford concluded that the statute which authorizes the EFSB to issue certificates of environmental impact and public interest provides

an express legislative directive to the siting board to stand in the shoes of any and all State and local agencies with permitting authority over a proposed "facility"-- that is, a directive to assume all the powers and obligations of such an agency with respect to the decision whether to grant the authorization that is within the agency's jurisdiction, with regulatory enforcement thereafter returned to that agency.

Again, Chief Justice Marshall disagreed.  Reflecting on the SJC’s recent decisions in Moot v. Department of Envtl. Protection, (2007) and Arno v. Commonwealth, (2010), she reasoned that even in this case -- which has to do with the administration rather than the relinquishment of public trust rights -- the Legislature must act expressly. Here, Justice Marshall concluded,

the siting board has purported to act as the protector of the public's long-standing rights under the public trust doctrine without the necessary express legislative authority to do so.

Of course, underlying this debate is the important policy question of which picture of Nantucket Sound is more protective of the public trust?  The state, and now the SJC, have chosen.

The current set of proposed rules complements the Tailoring Rule by addressing the nuts and bolts of state permitting programs.  Like many other environmental statutes, the CAA operates based on a “cooperative federalism” model ¾ if a state does not establish a permitting program that meets federal standards, the U.S. EPA becomes the permitting authority.  In this case, states must modify their State Implementation Plans (SIPs) to incorporate the new GHG requirements. 

·                     The first proposed rule identifies SIPs that do not currently apply PSD requirements to GHG emitting sources and requires them to be modified.  EPA’s “SIP call” is initially addressed to the following 13 states (but the agency has requested that all states review their PSD permitting authority): Alaska, parts of Arizona, Arkansas, parts of California, Connecticut, Florida, Idaho, Kansas, parts of Kentucky, parts of Nebraska, parts of Nevada, Oregon and Texas.  Massachusetts, along with several other states, is not directly affected by the SIP call because EPA is the PSD permitting authority.

·                     In the second rule, EPA is proposing a Federal Implementation Plan (FIP) that will apply in any state that cannot (or does not) revise its SIP by the New Year.  Nevertheless, EPA seems reticent to use the FIP, explaining that “States are best-suited to issue permits to sources of GHG emissions. They have longstanding experience working together with industrial facilities under their jurisdiction to process PSD permit applications.”

·                     The proposed rules, which are expected be finalized by the end of 2010, are summarized in greater detail here.

Just as the Tailoring Rule has been challenged by industry and environmental groups alike, it looks like there may be challenges of one kind or another to the new proposed rules.  A least one state that looks poised to get “FIPped” is Texas, which recently told EPA it would not implement GHG permitting requirements and filed suit to block the Tailoring Rule on August 2.  So much for “cooperative” federalism.

The U.S. Department of Energy announced on August 5 that it will support the redesign the FutureGen project, a public-private partnership formed to construct and operate a low-emission coal-fired power plant in southern Illinois.  Rather than building a new facility, the $1 billion in American Recovery and Reinvestment Act funding will go towards updating an existing 200-megawatt unit at Ameren Energy Resources Company’s Meredosia facility.  The retrofit will use a new technology called oxy-combustion, which generates a “purified” stream of carbon dioxide emissions that are easier to capture than the diluted carbon dioxide stream that results from burning coal with air.  The project will capture 90 percent of the unit’s CO2 emissions and funnel them via a new carbon dioxide pipeline network to a regional carbon storage site in Mattoon Illinois, about 140 miles east of the power plant. 

Meanwhile, the government of Ecuador signed an agreement with the United Nations Development Program on August 3 establishing a framework for a trust fund to protect Yasuní National Park from oil development. As reported by BNA, the Park is home to 20% of Ecuador’s oil reserves, worth about $55 billion at current prices.  Yasuní is also one of the most biologically diverse place on Earth and home to several indigenous groups.  What is this commitment worth?  The Ecuadorian government has set the price tag at $3.6 billion, and plans to appeal to donor governments for contributions to the trust fund.  Ecuador should be encouraged by donor nations’ past investments in debt-for-nature swaps and the $3.5 billion pledge by the governments of Norway, Japan, the U.S., the U.K., France and Australia for Reducing Emissions from Deforestation and Degradation (REDD) at last year’s Copenhagen climate conference.  On the other hand, the concept of paying to stop oil development (rather than deforestation) is new, and donors may question the timeframe for the commitment, especially since postponing the development of the resource might only increase its value and thus the risk of exploitation.  

Clearly, there is much more at stake with both of these projects than the number of tons of CO2 they will rescue from the atmosphere, but it’s interesting to compare the numbers nevertheless.  Ecuador is asking for $3.6 billion to prevent 436 million metric tons in CO2 emissions whereas the U.S. government is spending $1 billion (not to mention the private investment) towards an entire network of projects that, once built, is expected to prevent 1 million tons of CO2 per year from release to the atmosphere.  Assuming these numbers are correct, they suggest that not combusting fossil fuels is a more cost-effective way of limiting CO2 emissions than recovery of CO2 after combustion.

Earlier this month the three regional U.S. greenhouse gas programs released a white paper which sets out their answers. In Ensuring Offset Quality: Design and Implementation Criteria for a High-Quality Offset Program, representatives of the Regional Greenhouse Gas Initiative, the Western Climate Initiative, and the Midwestern Greenhouse Gas Reduction Accord provided their consensus view on key offset policy design and implementation components.  They concluded that offsets provide an important compliance flexibility that reduces the cost of cap-and-trade programs, allows for more varied emissions reduction opportunities, and ultimately enables the pursuit of more aggressive emissions reduction targets. This all comes with a stern warning: if offset projects do not achieve the five tenets listed above, the one-to-one relationship between substituting emissions reductions outside the cap for those under the cap is destroyed, and environmental benefits of the cap-and-trade program are undermined. The paper emphasizes additionality as the most important criterion ¾ offset programs must guarantee that the project “would not have happened anyway in the absence of the economic incentive created by the compliance obligation created by the cap-and-trade program.

The paper favors an approach where the validity of offsets is determined through standardized requirements rather than project-by-project determinations of which offsets can be used for compliance. Both the Kyoto Protocol’s Clean Development Mechanism and the European Union’s original offset program relied on a project-by-project system, while the climate change bill recently released by Senators Kerry and Lieberman and the ACES bill passed by the House last year are more reliant on standardized requirements.

The principles advanced in the white paper are useful, but they are still theoretical.The challenge remains to develop standardized guidelines that will address tricky issues such as guaranteeing the permanence of an afforestation offset, where there is always the chance of a forest fire, or ensuring the additionality of a landfill methane capture project, when regulations or the market may have demanded it anyway. Perhaps that is why we have the states as laboratories ¾ including the very states that drafted this paper ¾ as we wait for federal climate legislation to become a reality. The consensus announced in the white paper could certainly form the basis for a federal offsets scheme, but the regional programs don’t seem to be holding their breath.

The questionnaires request detailed information about real estate improvements during the last five years as well as the financial characteristics of development companies and their projects. There are two versions of the Owner/Developer questionnaire, but only the longer version -- which will be sent to “selected recipients” -- seems to address the types of stormwater controls actually used, or the cost of those controls, in any detail. Thus, while the longer questionnaire will present an additional burden for its recipients, it will also allow developers to report key information for the regulated community, including the cost-effectiveness and context of stormwater controls (e.g. soil types, urban vs. rural settings). 

Among other stakeholder groups, EPA will also send questionnaires to owners and operators of municipal separate storm sewer systems (MS4s) and to National Pollutant Discharge Elimination System (NPDES) permitting authorities. That means that one party that apparently won’t have to fill out a questionnaire is the Massachusetts DEP, which, along with 4 other states and the District of Columbia, does not have NPDES permitting authority. Particularly in light of MA DEP’s own recent stormwater proposal, EPA might consider asking all state environmental authorities about the scope of their current and planned regulatory efforts with respect to stormwater, so as to better coordinate state and federal programs. 

We’re pleased that EPA is making an effort to base its regulatory proposal on good information. Nevertheless, developers should watch the rulemaking process carefully between now and 2012. The 30 day public comment period on the draft questionnaires ends June 9, 2010.

The full set of materials can be found on the EPA’s website, but here are a few highlights: 

2-acre threshold: “Designated Discharges” covered by the permit consist of two or more acres of privately-owned impervious surfaces. (Many publicly-owned properties located in the Charles River basin will be subject to the Massachusetts North Coastal Small MS4 General Permit, released in draft by EPA Region 1 earlier this year.)

Aggregation: As those of you following stormwater issues in Massachusetts are aware, the first draft of the RDA was linked to the proposed state stormwater regulations, which included an “aggregation rule” with a number of onerous consequences. The amended RDA and the draft General permit are no longer connected to the stalled state regulations, but they still include the concept of requiring a single permit for contiguous but separately owned properties that share stormwater controls. Fortunately, unlike the state proposal, each co-permittee will only be responsible for ensuring compliance for “all terms and conditions of this permit applicable to the activities that it controls or has the right to control.”

Permit requirements: The draft permit includes a series of stormwater control requirements including a 65% phosphorus load reduction target (derived from the Lower Charles River TMDL) that permittees can implement on-site through structural or non-structural controls or through a “Certified Municipal Phosphorus Program.”

Comments are due June 30. We expect EPA to take a lot less time to finalize these documents than MassDEP has taken to finalize its own stormwater program.