Law and the Environment : Environmental Lawyer & Attorney : Foley Hoag Law Firm : Boston, Washington D.C.

Now that the initial euphoria following the introduction of the Waxman-Markey climate change bill  has passed, this past week may have reminded supporters of climate change legislation just how difficult it will be and what sort of compromises may be necessary to get it done. First, Greenwire reported again on the difficulty that senators and representatives from coal states will have supporting climate legislation that would increase electricity rates. This was consistent with the recent Senate action that seemingly put the final nail in the coffin on the idea of using the budget process as a vehicle for climate legislation in the Senate (in order to avoid the threat of a filibuster).

Last Thursday, the Obama Administration seemed to acknowledge this reality. White House spokesman Benjamin LaBolt, while stating that the Administration’s goal remains a cap-and-trade program in which all allowances are auctioned, rather than simply allocated to existing emitters, noted that Congress was looking at a number of options and stated that the Administration “will be flexible” in order to get a bill passed. Another White House aide, Joseph Aldy also did not rule compromise on the auction issue.

Part of the Administration’s concern has to be placating the so-called Gang of 16, a group of moderate Senators. It is difficult to imagine climate change legislation being enacted without the support of this group, which includes several senators most people would think of as reliable votes for the Democratic leadership.

The Administration faces a difficult balancing act on this issue. If it signals too early and too strongly a willingness to compromise, that could be perceived as a sign of weakness and the debate could shift too far—from the Administration’s perspective—toward allocating allowances, rather than auctioning them. On the other hand, if the Administration sticks too firmly to the auction approach, it risks losing credibility and influence, as Congress may simply develop legislation without regard to the White House. If I were a betting man, I’d still assume that climate legislation will include an auction, but the percentages may start out relatively low (perhaps with a mechanism to increase that percentage over time).

This post also appeared on the Environmental Protection website, an organization that provides pollution and waste treatment solutions for environmental professionals.

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I previously noted that some of my friends in the development community were concerned that I seemed to be too welcoming of certain moves by the Patrick administration related to energy efficiency and climate change.  If, as is often the case, developments in California are a harbinger of things to come in Massachusetts, now I am in a position to really give Massachusetts developers something to worry about.

San Diego Congresswoman Lori Saldana, who is part of the Democratic leadership in the California Assembly, has introduced legislation that would require all new residential construction in California to be energy neutral by 2020.

In case anyone has any doubts, this is a heads up, not a statement of support.  As noted by Tim Coyle of the California Building Industry Association, the problem is with existing homes; new home construction is, of course, already much more energy efficient than existing homes. That is only one of many good reasons to oppose such legislation.  However, given our track record in Massachusetts, who would bet against introduction of a similar bill here? 

And I'd give better odds of it passing in Massachusetts than in California. 

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 As we have already noted, Representatives Waxman and Markey released a 648-page discussion draft energy bill last week that provides the first comprehensive look at how Congress may approach the nexus of energy, job creation, and the environment. Although this bill is only being released in discussion draft form, as the first major energy volley by Congressional Democrats, it will undoubtedly have a major influence on the debate in Washington. 

In addition to the global warming provisions that we posted about last week, clean and renewable energy occupies a significant place in the draft bill.  The first 157 pages are dedicated to energy, with additional provisions scattered throughout. 

Title I, the clean energy section, addresses four broad policy areas: (1) creation of a national renewable energy standard, (2) carbon capture and geologic sequestration (“CCS”), (3) low-carbon vehicles and transportation fuels, and (4) electricity transmission including smart grid technologies. In addition, the draft creates a State Energy and Environment Development Fund ("SEED Fund") to act as a repository for monies received through federal energy programs.  Each of these provisions is an example of how policy leaders are beginning to see synergies between job creation and environmental stewardship. 

We take a deeper dive into the energy provisions after the jump.

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I finally found time to review the 648-page “discussion draft” of the “American Clean Energy and Security Act of 2009” released by Representatives Waxman and Markey this week. It is fair to way that, though release of the draft may be an important way-station on the road to a climate change bill, there remains a lot of work to do. While the draft includes some important markers that are likely to set boundaries on what might be included in the final bill, it is at least as notable for what is omitted than for what is included. Here are some highlights of Title III of the bill, which addresses climate change: (We hope to post soon about the energy titles as well.)

·  No surprise here – the bill would create a cap and trade program requiring facilities with emissions of more than 25,000 tons per year of CO₂ equivalents to have allowances in order to continue such emissions.

·  Allowances would be allocated so that emissions would decrease 20% from 2005 levels by 2020 and 83% from 2005 levels by 2050

·  The bill contains a framework for an auction system, but it does not specify what percentage of allowances will be auctioned or what will happen to the proceeds.

·  There are several measures designed to address concerns about multiple, conflicting, or inefficient regulatory programs:

o  The President is directed to “harmonize” “to the extent practicable” DOT fuel efficiency standards, EPA regulations, and California regulations regarding motor vehicle emissions

o  Other than regulations implementing the act, EPA is precluded from using existing authority to regulate greenhouse gases as hazardous air pollutants or under NSR rules (unless they have non-climate change related impacts) and precludes listing of greenhouse gases as criteria air pollutants based on their impact on climate change

o  State cap and trade programs would be preempted, at least from 2012 through 2017. It appears as though allowances already issued under RGGI will be folded into the federal program

Overall, this looks like a measured approach designed to win support from both sides. Environmentalists will be pleased by firm caps, including a 2020 cap more stringent than some have proposed. Regulated industries will be pleased by the attempts to harmonize standards on motor vehicles, preclude Clean Air Act regulation of greenhouse gases, and to preempt state or regional cap and trade programs.

If I had to guess, I’d say that this bill marks the death knell for regulation of greenhouse gases under existing Clean Air Act authority (assuming that a bill gets passed; if Congress fails to act, then EPA certainly will use existing authority); it is probably also the beginning of the end of state and regional programs.  On both of these issues, If Representatives Waxman and Markey are already staking out this position, then it seems difficult to imagine a final bill that doesn’t incorporate these elements of the draft bill.  As to the rest, time will tell.

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This week, the practice of mountaintop removal – chopping the tops off mountains in order extract the coal – received two blows: one from EPA and one from Congress. First, EPA offices Region 3 and Region 4 announced that they plans to assess the Central Appalachia Mining's Big Branch project in Pike County, Ky., and the Highland Mining Company's Reylas mine in Logan County, W.Va., before permits are issued for those projects. 

Although the broad brush is important here, so are some of the details. First, both letters raise concerns about the cumulative impacts of multiple mountaintop removal projects. Second, the Region 3 letter raises the possibility that EPA might use its authority under section 404(c) of the Clean Water Act to prohibit issuance of the required permit, noting that the “extensive cumulative and other impacts give this proposed project high potential” for action under § 404(c).  

The second blow was the introduction in Congress of legislation that would prohibit mountaintop removal. Of course, introduction doesn’t guarantee passage, but it does seem notable that one of the two sponsors is Lamar Alexander, both a Republican and a Senator from a coal mining state. Senator Alexander’s support suggests that a tipping point may have been reached on this issue.

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