By David Spence*

Visionaries imagine better futures. Skeptics worry about proof of concept — whether the technically-possible is in fact possible.  Regulators who oversee transitions to new and better futures ought to do so slowly and carefully — not only because the devil is in the details, but because some utopian visions can become dystopian realities.

Energy markets offer a case in point.

In the wonky world of energy policy, the latest utopian vision is one in which we consumers produce and exchange (renewable) electricity over local peer-to-peer (P2P) trading networks using blockchain, the electronic registry used to trade bitcoin.  In place of today’s utility-centric electric system, imagine homes and businesses sporting rooftop solar panels and Tesla powerwall batteries, using blockchain trade clean energy.

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Climate Resilience in the Bulk Power System: New White Paper


Posted on February 20th, 2018 by Justin Gundlach

by Justin Gundlach and Romany Webb

Resilience—the capacity to withstand, absorb, recover from, and better adapt to disruption—is currently a popular topic of discussion and debate. Several factors, including a string of disasters and unrelated but coincident regulatory processes, have made resilience a key objective for a wide array of policy makers. They include the entities responsible for shaping the generation and transmission facilities that make up the bulk power system (BPS): the Federal Energy Regulatory Commission (FERC), the North American Electricity Reliability Corporation (NERC), and regional Independent Service Operators and Regional Transmission Organizations (ISO/RTOs). On January 8, for instance, FERC opened a proceeding “to explore resilience issues in the RTOs/ISOs.”

Resilience is a derivative concept, meaning that a system, facility, or community is not simply resilient, but is more or less resilient to a particular sort of disruption. FERC, NERC, and ISO/RTOs have explored what is necessary to make the BPS resilient to cyber attack, physical attack, or a large-scale electromagnetic pulse. However, as we explain in a new white paper — Climate Change Impacts on the Bulk Power System: Assessing Vulnerabilities and Planning for Resilience — they have not examined in a systematic way as necessary to enhance the BPS’s resilience to climate-driven disruptions and constraints. This is a cause for concern as the various impacts of climate change, from higher average temperatures to altered precipitation patterns to more frequent and powerful hurricanes and wildfires, pose major threats to the BPS. They could, in the future, prevent the BPS delivering reliable electricity services at just and reasonable prices as required by the Federal Power Act.

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By Romany Webb and Justin Gundlach

           Residential solar is one type of DER

On February 15, the Federal Energy Regulatory Commission (FERC) announced that it would convene a technical conference to explore issues relating to the wholesale market participation of distributed energy resources (DERs). These resources, which consist of solar panels and other small-scale energy systems installed on or near customers’ premises, account for a sizable share of electricity generation in many areas. They have the potential to displace conventional generating facilities (e.g., fossil fuel power plants) and, in the words of FERC Commissioner Richard Glick, “provid[e]
. . . services efficiently and cost effectively while also improving the reliability and resilience of the bulk power system.”

Despite their potential benefits, DERs currently play a limited role in wholesale  energy markets operated by FERC-regulated independent system operators (ISOs) and regional transmission organizations (RTOs). Current wholesale market rules, which were developed with conventional generators in mind, often impose participation requirements that DERs cannot meet, such as minimum size thresholds. FERC is, therefore, considering requiring ISO/RTOs to allow DERs to participate on an aggregated basis. Under this approach, the operations of numerous individual DERs would be coordinated, such that one request or instruction from the ISO/RTO would prompt a coordinated response from the entire group of DERs. While that may sound simple enough, actually doing it will be extremely complex, requiring the untangling of a mess of regulatory and other barriers. We explore those barriers in a forthcoming Sabin Center working paper, which examines how DER aggregation has fared under the California ISO (CAISO), the only market operator to allow it thus far.

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By Dena Adler

Donald Trump claims to have delivered on deregulation in his first year as President. While independent reporting questions the veracity of his assertions, climate change is one arena where the Trump Administration’s regulatory rollbacks have been both visible and real. The Administration has delayed and initiated the reversal of rules that reduce greenhouse gas (GHG) emissions from stationary and mobile sources; sought to expedite fossil fuel development, including in previously protected areas; delayed or reversed energy efficiency standards; undermined consideration of climate change in environmental review; and hindered adaptation to the impacts of climate change. In total, the Sabin Center’s U.S. Climate Deregulation Tracker identifies a total of 64 actions taken by the executive branch in 2017 to deregulate climate change. These actions correspond to at least two dozen climate-related protections. However, the Trump Administration’s efforts have met with constant resistance, with those committed to climate protections bringing legal challenges to many, if not most, of the rollbacks.

U.S. Climate Change Litigation in the Age of Trump—a new Sabin Center working paper—seeks to give shape to the current moment in climate change litigation, categorizing and reviewing dozens of climate change cases filed during 2017 to understand how litigation countered—and at times courted—the influx of climate change deregulation during the first year of the Trump Administration. (An Executive Summary is also available.) The analysis focuses specifically on 82 “climate change cases,” defined as cases that raise climate change as an issue of fact or law. To explain the effects of climate change litigation in 2017, this paper sorted cases into five categories:

  1. Defending Obama Administration Climate Change Policies & Decisions;
  2. Demanding Transparency & Scientific Integrity from the Trump Administration;
  3. Integrating Consideration of Climate Change into Environmental Review & Permitting;
  4. Advancing or Enforcing Additional Climate Protections through the Courts; and
  5. Deregulating Climate Change, Undermining Climate Protections, or Targeting Climate Protection Supporters.

The first four categories are “pro” climate protection cases—if their plaintiffs or petitioners are successful they will uphold or advance climate change protections. The fifth category contains “con” cases—if their filing party or parties are successful, these cases will undermine climate protection or support climate policy deregulation. Sixty of the reviewed cases were pro climate protection and twenty-two were con. The pro cases outweigh the con cases roughly 3:1 (73% to 27%).

To understand how federal climate change litigation is shaping national climate policy in the absence of federal leadership, U.S. Climate Change Litigation in the Age of Trump looks across and within these litigation categories to further examine: 1) who are the litigants, 2) what laws are they utilizing, and 3) how far have these cases progressed in year one of the Trump Administration.  See the Executive Summary and Full Report for the results.

Dealing with Deluge: Exploring Manila’s Approaches to Flood Management


Posted on February 6th, 2018 by Tiffany Challe

By Richmund Sta. Lucia

Extreme weather patterns can be easily seen in floods. Severe storms, especially during the rainy season, cause record rainfall to inundate both cities and countryside alike. Storm surges, another weather abnormality, create havoc in coastline areas by pushing meters-high water from the seas towards land. Indeed, the problem of flooding is becoming more and more pervasive around the world. It is now commonplace to see in the news familiar places suddenly becoming like a scene in the post-apocalyptic movie Waterworld. From Africa to Asia, from the Caribbean to the US, floods and landslides invariably cause damage to establishments and crops, dislocates people from their homes, and claims countless lives.

In the Philippines, one of the most destructive floods it has experienced was when Typhoon Ketsana (locally known as Ondoy) struck Manila in September 2009. The precipitation was unprecedented: one month’s worth of rain was poured into the Philippine capital within only 12 hours. The torrential rains caused heavy flooding–Manila’s worst in more than 40 years. More than 80% of the city was submerged in water, hundreds of thousands were displaced, and at least 246 people were killed. The sad realization after the killer storm was that Manila was not prepared for the non-stop rains and the ensuing floods brought by Ketsana.

The Philippine government’s response to Typhoon Ketsana was to come up with measures that seek to prevent or mitigate the dire effects of flooding. On September 4, 2012, the Philippines’ National Economic and Development Authority (NEDA), the country’s socioeconomic planning body, approved the Flood Management Master Plan for Metro Manila and Surrounding Areas (Master Plan). The Master Plan aims “to provide sustainable flood management and safely control major flood events in Metro Manila” by undertaking specific priority structural and non-structural measures. The two main implementing agencies are the Department of Public Works and Highways (DWPH) and the Metro Manila Development Authority (MMDA). Its implementation until year 2035 was projected to cost an estimated $7.5 billion.

Recently, the World Bank and the Asian Infrastructure Investment Bank (AIIB) approved the funding of $500 million for flood management in Metro Manila. Under the Metro Manila Flood Management Project, multi-sectoral approaches will be taken to support flood control infrastructure along critical waterways by modernizing the Philippine capital’s pumping stations, improving solid waste management, and relocating informal settlers. This development shows that the Philippine government is serious in dealing with Manila’s flood problem. Accordingly, the project’s activities can be broken down as follows:

Component 1 – Modernizing drainage areas:

  • Pumping Stations and Related Infrastructure. New pumping stations, including related infrastructure (drainage channels, flood gates, and trash racks), will be constructed and existing ones will be improved and modernized. The energy source will also be shifted from diesel to electricity.
  • Asset Management Plans and Maintenance Equipment. Plans for asset management will be developed and operational manuals will be updated for pumping stations, associated waterways, and other drainage infrastructure. Specialized waterway maintenance equipment will be procured, such as floating dozers, couple pontoons, and remote-controlled cleaners for clogged drains. Modern equipment will be used to remove water hyacinths along rivers and canals which can then be reused for production of biogas.
  • Water Retention. Water retention capacity will be increased by developing green infrastructure such as green roofs, permeable pavements, rooftop rainwater collection, and temporary retention of drainage water in public areas such as basketball courts and parking garages. Community activities within drainage areas will also be conducted for purposes of flood risk management and setting up of local warning systems.

 

Component 2 – Minimizing Solid Waste in Waterways:

  • Improving Solid Waste Management in Project Drainage Areas. Neighborhood-level activities will be carried out near pumping stations, waterways, and drainage including improved solid waste collection services, community mobilization and awareness creation, incentive-based improved waste collection, and neighborhood upgrading (e.g., beautifying waterways and easements to discourage the indiscriminate disposal of waste into waterways).
  • City-wide Waste Management Activities. Improved solid waste management will be promoted across the metropolis through large-scale information, education, and communication campaigns, development of an integrated management information system on solid waste, and formulation of a solid waste master plan for Metro Manila. Specific guidance will be given to the MMDA and to local government units in order to efficiently manage their roles with respect to waste management.
  • Innovative Waste Management Opportunities. MMDA will use appropriate equipment to reduce residual solid waste from drainage areas which would otherwise end up in landfills. This may include shredding machines at pumping stations and waste processing equipment, for example, styro-filters that convert Styrofoam into activated carbon, which can then be used to purify water.

 

Component 3 – Participatory Housing and Resettlement:

  • Resettlement of People Affected by the Project. Since some areas will be used as sites for new pumping stations, resettlement of communities that would be affected by the implementation of the project will be necessary. The government will undertake financial and other remedial measures for the relocated families by providing access to better housing, basic services, and building community organizations.
  • Support to Past Resettlement. Due diligence will be conducted to process the needs of resettled communities. These include community-based infrastructure, livelihood programs, and local economic development.

 

Component 4 – Project Management and Coordination: The government will provide support services for the operation of Project Management Offices in DPWH and MMDA for purposes of better management and coordination of their respective functions. Such support includes payment of operating costs, provision of office equipment and materials, provision of training, knowledge sharing and peer-to-peer learning, etc.

In addition to the above approaches taken by the Philippine government, other suggestions come from the private sector. A set of sound suggestions were made by a leading Filipino architect who espouses the use of adaptive architecture. While accepting the geographic and climate situation of flood-prone Metro Manila is one thing, a rather positive way to look at it is to deal with the variables that can be adapted to expected extreme weather events that lead to severe flooding. Suggestions include, among others, designing houses by considering nature: if the location being considered to build a house is a coastal area, then the house should be built away from the coast if possible. The house must also have livable rooms two meters high above the worst flood line. Another method that was suggested is dry flood-proofing, where exterior walls and openings are sealed to prevent water from entering the house.

With the proper programs set in place and activities undertaken to deal with Metro Manila’s flood problem, the Philippine government strives to avert, or at least mitigate, the destructive impacts of floods like the one brought by Typhoon Ketsana. To be sure, proper laws and regulations must be set in place to manage flooding in areas especially those which are considered as low-lying, populous, and flood-prone. It must be emphasized, however, that these plans and activities would only be as good as their implementation and would also depend on how serious the implementing agents are.

In the U.S., it may be worth noting that flood management is among the “ghost rules” quietly withdrawn by the incumbent administration (see previous post). As President Trump, upon assuming office, imposed a freeze on pending regulations called “ghost rules” (i.e., those withdrawn from the rule-making process without public notice), the execution of important rules that deal with climate change adaptation and mitigation was inordinately delayed, specifically those rules aimed at promoting greater resiliency to floods. The point to be made here is that even though the U.S. national government seems to be unwilling to institute measures for better management of flood risks, it nonetheless might well be worthwhile to consider and explore the suggested approaches learned from Manila’s experience with Ketsana’s deluge. Besides, with or without the help of the government, our resolve to deal with the adverse effects of flooding must not be dampened.

Richmund Sta. Lucia, a candidate for an LL.M. degree at Columbia Law School, received his J.D. degree from the University of the Philippines College of Law and has worked as an attorney in the Philippines’ Office of the Solicitor General and private law firms. He has also been a lecturer in several colleges in the Philippines. His legal advocacy includes the promotion of renewable energy.

February 2018 Updates to the Climate Case Charts


Posted on February 5th, 2018 by Tiffany Challe

Each month, Arnold & Porter and the Sabin Center for Climate Change Law collect and summarize developments in climate-related litigation, which we also add to our U.S. and non-U.S. climate litigation charts.  If you know of any cases we have missed, please email us at columbiaclimate at gmail dot com.

HERE ARE THE ADDITIONS TO THE CLIMATE CASE CHART SINCE UPDATE # 106.

FEATURED CASE

D.C. Circuit Denied Rehearing of Decision Vacating HFC Prohibition

The D.C. Circuit Court of Appeals denied petitions for panel rehearing and rehearing en banc of the court’s August 2017 decision vacating the U.S. Environmental Protection Agency’s (EPA’s) rule prohibiting use of hydrofluorocarbons (HFCs) to replace ozone-depleting substances under EPA’s Significant New Alternatives Policy program. HFCs are powerful greenhouse gases. Rehearing was sought by Natural Resources Defense Council and by two companies that had developed “new and better substitutes” for ozone-depleting substances. The court said that a majority of judges eligible to participate did not vote in favor of the rehearing en banc petitions and noted that Judges Millett and Katsas did not participate. The petitions for panel rehearing were denied because the current panel of two judges was equally divided. The third judge on the panel, Judge Brown, retired on August 31, 2017. She joined the entirety of the majority opinion, including the portion vacating the HFC prohibition. Mexichem Fluor, Inc. v. EPA, No. 15-1328 (D.C. Cir. Jan. 26, 2018).

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By Justin Gundlach and Romany Webb

The speedy and opaque process that ended in December 2017 with passage of the Federal Tax Cuts and Jobs Act has meant that different sectors and companies are just now figuring out what its provisions mean for them. For regulated utilities, which collect money from ratepayers in anticipation of needing to pay corporate taxes on various planned projects (a “deferred tax pool”), the cut effectuated a windfall whose sizeable scale is coming into focus as utilities file their quarterly financial disclosures with the Securities and Exchange Commission. As Politico has reported, New Jersey-based PSEG says it will have about $1.8 billion as a result of tax policy change, American Electric Power estimates $4.4 billion, and NextEra Energy $4.5 billion.

Unlike other businesses, utilities’ use of a windfall like the one arising from the new tax law is tightly constrained by state law and the public service commissions responsible for administering it. Utilities’ profits are tightly controlled in general; public service commissions only allow them to recover the costs they incur in providing services, plus a reasonable return on their investments. Commissions will, therefore, evaluate and possibly refuse or redirect utilities’ requested uses of the windfall. A debate is currently brewing over whether the windfall should be refunded to ratepayers or used to fund new projects that would otherwise require rate increases. These options are not necessarily mutually exclusive, but our view is that investment of this windfall in new projects is the most prudent option and dividends for shareholders the least.

In this blog, we suggest various utility projects that could be funded by the deferred tax pool windfall, each of which is likely to result in either improved customer service or rate reductions or both, over time. All of our suggested projects involve action by gas and electricity distribution[1] utilities to address climate change. As our suggestions reflect, distribution utilities have a unique opportunity to mitigate climate change, including by facilitating the transition to a clean-energy economy. They are also vulnerable to the effects of climate change, with much of the infrastructure they own and control likely to be affected by future extreme, climate-driven events like storms and heat waves.

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By Susan Biniaz

In the midst of the negotiations leading to the Kyoto Protocol in 1997, the U.S. Senate adopted the “Byrd-Hagel Resolution,” co-sponsored by Senators Robert Byrd of West Virginia and Chuck Hagel of Nebraska. Passed by a vote of 95-0, it reflected the Senate’s view that the international climate change agreement then being negotiated by the Clinton Administration was not on the right track.  Specifically, it signaled dissatisfaction with an agreement that would contain legally binding greenhouse gas emissions commitments for developed countries without such commitments in the same time period for developing countries.

By its terms, the Byrd-Hagel Resolution applied not only to the Kyoto Protocol but also to any subsequent climate agreement. It influenced the approaches of the Clinton, Bush, and Obama Administrations to the Kyoto Protocol and international climate policy. Curiously, however, it did not appear to play a role in the evaluation, including by the Trump Administration and the Senate, of whether the United States should continue to participate in the Paris Agreement.

Susan Biniaz, formerly a long time U.S. Department of State lawyer, is on the adjunct faculty of Columbia Law School and is a David Sive Visiting Scholar at the Sabin Center for Climate Change Law. In her latest paper, she explores the role that the “Byrd-Hagel Resolution” played in the climate agreements.

Read her paper here.

By Jessica Wentz and Michael Burger

Last year, the D.C. Circuit Court of Appeals issued a key decision on the scope of greenhouse gas emission impacts that must be considered by the Federal Energy Regulatory Commission (FERC) in environmental reviews of pipeline projects. In Sierra Club v. FERC, No. 16-1329 (2017), the court held that FERC’s NEPA analysis for a natural gas pipeline project was insufficient because FERC had failed to consider the greenhouse gases generated by the combustion of the natural gas that would be transported via the pipeline. This decision was significant insofar as it clarified that the evaluation of downstream combustion emissions – which courts had previously required for coal mines and coal railways – is also required for FERC reviews of at least some natural gas pipelines.

There are now several pending cases and administrative challenges that raise additional questions about the nature of federal agency obligations to assess indirect greenhouse gas emissions from pipeline approvals. For example, are agencies required to evaluate upstream emissions from induced natural gas development, as well as downstream emissions? How exactly should an agency go about assessing the “cumulative impact” of those emissions when added to other past, present, and future actions? And are there other factors that an agency should consider when assessing the significance of these emissions, such as the social cost of those emissions? These questions are now being litigated in the D.C. Circuit and the Second Circuit. They are also relevant to assessing the adequacy of the supplemental EIS that FERC is currently preparing on remand from Sierra Club v. FERC.

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Principles on Climate Obligations of Enterprises: Guest Blog


Posted on January 23rd, 2018 by Tiffany Challe

Editor’s Note

The Expert Group on Climate Obligations of Enterprises is comprised of experts, listed here,  in international, environmental, tort, human rights and company law. It has worked for several years to formulate the Principles on Climate Obligations of Enterprises, based on its interpretation of the law as it stands or will likely develop. It is a follow-up project to the Oslo Principles, which were launched at King’s College London in 2015.  The Expert Group hopes to spur a concrete debate on the responsibilities of individual entities and contribute to addressing the threats posed by climate change. The Sabin Center for Climate Change Law has not endorsed these enterprise principles, but is publishing a guest blog by their authors in order to stimulate further discussion.

The need to discern concrete obligations of major players

The challenges posed by climate change to humankind and the environment are unprecedented. Greenhouse Gas (GHG) emissions must be curbed globally in the very short term; otherwise, the future looks grim. There is broad consensus that in order to limit these consequences to ‘acceptable’ levels, global warming must be limited to below 2°C.

Notwithstanding the severity of this challenge, there is still little discussion about a concrete and enforceable distribution of the GHG emissions that must be reduced in order to achieve this imperative. The Oslo Principles (OP) aimed to map the legal obligations of States in the face of climate change. The Principles on Climate Obligations of Enterprises (EP), issued by a group of experts from all continents, discern the obligations of enterprises and investors based on the group’s interpretation of the law as it stands or will likely develop. In doing so, they aim to complement the OP in spurring a concrete debate on the responsibilities of individual players.

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Disclaimer

This blog provides a forum for legal and policy analysis on a variety of climate-related issues. The opinions expressed here are solely those of the individual authors, and do not necessarily represent the views of the Center for Climate Change Law.

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