By Kyle Danish and Megan Ceronsky
As this issue of the Carbon & Climate Law Review goes to press, climate change policy in the United States is at an important inflection point, with multiple initiatives moving forward in the Congress, the Obama Administration, the states, the cities, and the courts. Furthermore, these various initiatives interact with one other. Progress or impasse on any one initiative could affect the status of the others.
On May 12, 2010, Senators John Kerry and Joseph Lieberman introduced the “American Power Act.” This bill – which is summarized in the “Current Developments in Carbon & Climate Law” section of this issue – would establish a declining cap covering most greenhouse gas emissions in the United States. The bill also would preclude most separate greenhouse gas regulation by the U.S. Environmental Protection Agency and the states. Providing a perspective from outside the United States, Oxford University’s David Robinson outlines a set of effectiveness criteria against which a bill such as the American Power Act could be evaluated.
The American Power Act, however, faces very uncertain prospects in Congress. This uncertainty has brought intensified focus on what the EPA might do with its existing authorities under the Clean Air Act, provided that EPA’s finding that these gases contribute to endangering public health and welfare holds up in court. EPA’s regulatory process is already in motion – although various pieces of legislation introduced in Congress would delay or remove EPA’s authority altogether. It is unclear whether any of these attempts to block EPA regulation could be enacted by the Congress, and signed by the President. A stalemate in the Legislative Branch – no legislation to control greenhouse gas emissions, and no legislation to prevent EPA from doing so – would allow EPA to implement its own regulatory regime. Could the EPA, using its somewhat outmoded authorities under the Clean Air Act, implement something like the economy-wide, cap-and-trade greenhouse gas regulatory program contemplated by recent legislation? Former EPA General Counsel Roger Martella engages this question in his article for this issue.
Other agencies within the Obama Administration are also taking action. Earlier this year, the U.S. Securities and Exchange Commission (SEC) issued guidance that has established new expectations for publicly-held companies to disclose their climate change-related risks to investors. Given the considerable policy uncertainty, it is unclear how companies will respond to this new mandate. Jeffrey Smith and his colleagues analyze the implications of the new SEC guidance in their article.
A continued impasse in Congress also could mean accelerated activity by the states and regions. All eyes are on California, which is in the process of developing rules for implementing its landmark AB 32 climate change legislation. Because of the size of the California economy and the long tradition of California acting as an environmental policy trendsetter for other states, carbon controls imposed in California could have impacts beyond its borders. Mary Nichols, Chairman of the California Air Resources Board, writes in this issue on the rationale for action by California, and reports on the state’s progress in developing regulations.
Numerous U.S. cities also are piloting climate change initiatives, taking advantage of their ability to structure policies that are tailored to local circumstances. George Washington University’s Dana Dolan and her colleagues provide an initial assessment of the implementation of these municipal efforts.
Meanwhile, a series of climate change-related lawsuits are winding their way through the U.S. courts. EPA’s promulgation of greenhouse gas regulations under the Clean Air Act has attracted petitions for review by a number of different parties. A separate subset of lawsuits involves tort-style actions against energy-producing and energy-intensive companies alleging that these companies are causing harmful climate change. In this issue of the CCLR, another former EPA General Counsel, Ray Ludwiszweski, and his colleagues analyze the question of whether the courts are a viable arena for such claims.
What can the emissions trading marketplace make of this complicated picture? The President of the International Emissions Trading Association, Henry Derwent, has contributed an article to this issue outlining the expectations and concerns that market participants have about the potential directions of U.S. climate change policy. With so many possible climate change policy scenarios in the United States – and so much uncertainty about their ultimate resolution – this is a complex period of time for legal scholars and practitioners in the field of climate change. It is our hope that this issue of the CCLR will illuminate the key issues and provide a resource for continued work.
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