Ethan I. Strell, CCCL Associate Director and Fellow

On March 21, 2014, President Obama signed into law the Homeowner Flood Insurance Affordability Act of 2014 (2014 Act), whose stated purpose is to “delay the implementation of certain provisions of the Biggert-Waters Flood Insurance Reform

Texas Hurricane Damage (photo credit: FEMA)
Texas Hurricane Damage (photo credit: FEMA)

Act of 2012, and for other purposes.”[1]  While the original bill introduced in the House delayed implementation of certain premium increases required by the 2012 law, the bill signed into law actually repeals or modifies some, but not all, of those reforms.

The nation’s flood insurance program is a complex regulatory regime, and the complexity of the 2014 Act adds to the confusion.  This article parses exactly what Congress did and did not do to the prior reforms to the national flood insurance program.

  Read more »

Foto playaTeresa Parejo Navajas

Associate Professor of Law. Universidad Carlos III de Madrid (Spain)

Visiting Scholar at the Center for Climate Change Law (Columbia University)

Columbia’s Center for Climate Change Law has published a new white paper analyzing the Reverse Environmental Assessment tool for the adaptation of projects, plans and programs to the effects of climate change and, more specifically, evaluating the EU proposal for an Environmental Impact Assessment Directive. It is clear that mitigation measures are not enough to tackle climate change effects and, therefore, some adaptation measures will be needed to improve resiliency. The new Reverse Environmental Impact Assessment (REIA) analysis, so named by Professor Michael B. Gerrard, evaluates the impacts that the “transformed environment” -a result of the adverse effects of climate change- may cause to a project, plan, or program, in order to allow those undertaking these activities to act proactively.

The EU is aware of the need to incorporate adaptation measures into the climate change policy and for that purpose, it has elaborated:

  • An Adaptation Strategy (April 2013), recognizing the importance of the Environmental Impact Assessment (EIA) for climate proofing; promoting greater coordination and information sharing among Member States, and ensuring the adaptation considerations are addressed in all relevant EU policies;
  •  A Climate-ADAPT benchmarking platform, to support EU countries in adapting to climate change, helping users to access and share information on climate change issues (vulnerabilities in European regions and sectors, adaptation strategies at National and transnational levels, case studies and potential options and planning tools that support adaptation planning); and
  •  Two Guidances on the integration of climate and biodiversity into either the Environmental Impact Assessment (EIA) or the Strategic Environmental Assessment (SEA) processes.

The EU has elaborated two different Directives that cover the Assessment in three levels:  the project level, contained in the EIA Directive (Directive 85/337/EEC, amended in 1997, 2003 and 2009 and subsequently codified by Directive 2011/92/EU), and the national and sectoral levels, contained in the SEA Directive (Directive 2001/42/EU). According to the European Commission, the main difference between both tools is that in the SEA, the objectives are expressed in terms of sustainable development (therefore, considering the possible impacts from a holistic and inter-sector approach), taking into account all activity sectors that may be affected by the plan or program, whereas in the EIA, the aims are purely environmental, identifying the possible impacts of a specific project on it. The proposal for a Directive only referrers to Directive 2011/92/EU.

Regardless of its importance, and despite the inclusion of some references to the adaptation of the projects to climate change, the review of the Directive 2011/92/EU on the EIA does not make a clear commitment for the REIA tool, losing a great opportunity to introduce this new instrument into the legal systems of all EU Member States to really meet its goal of achieving a high level of environmental protection, adapting the EIA to new challenges, among others, climate change.

Indeed, the integration in the EIA of the challenges derived from climate change is included in the text of the proposal for a Directive (specifically in article 3 and Annexes III and IV), and, together with the EIA Guidance, takes into account the assessment of the eventual climate conditions that might affect a project (a real REIA) but with an unclear wording (or at least not as clear as it could have been, given the clarity of the Guidance to this respect). Therefore, and even though the proposal for an EIA Directive is a step forward in the right direction to climate-proof the EU policy, it could have been more effective for that purpose to include an explicit provision of the REIA analysis in the text of the proposal, as this tool soon will be (in fact it is today) essential and unavoidable for any EU action.

Photo credit: Guiseppe Milo (j0sh)

 

April Updates to the Climate Litigation Charts


Posted on April 1st, 2014 by Shelley Welton

Update #61 April 2014gavel

Each month, Arnold & Porter and the Center for Climate Change Law collect and summarize developments in climate-related litigation, which we also add to our U.S. and non-US climate litigation charts. The April additions are listed below. (If you know of any cases we’ve missed, please email us at columbiaclimate at gmail dot com.)

FEATURED DECISION

In re La Paloma Energy Center, LLC, PSD Appeal No. 13-10 (EAB Mar. 14, 2014): added to the “Stop Government Action/Project Challenges” slide. The U.S. Environmental Protection Agency (EPA) Environmental Appeals Board (EAB) rejected Sierra Club’s challenge to a Prevention of Significant Deterioration permit issued by EPA Region 6 for a natural gas-fired power plant in Texas. EAB was not persuaded by Sierra Club’s argument that Region 6 was required to consider each of three combined cycle natural gas-fired combustion turbine models as a separate technology in its BACT analysis. EAB deferred to Region 6’s determination that the differences in the greenhouse gas (GHG) emissions from each of the three proposed turbine models were “marginal,” and concluded that Region 6 “did not clearly err or abuse its discretion in determining that the GHG emission limits for all three turbine models represent BACT for highly efficient combined cycle combustion turbines.” EAB also ruled that Region 6 had not abused its discretion in determining that  a solar thermal energy component would “redefine the source” and therefore could be excluded as a potential emissions control alternative. Read more »

U.S. Proposes Removing Climate Language from the Trans-Pacific Partnership


Posted on March 17th, 2014 by Meredith Wilensky
 3 comments  

Meredith Wilensky, CCCCL Associate Director & Fellow

TPPThe United States is currently negotiating the terms of the Trans-Pacific Partnership (TPP), a free trade and investment agreement, with 11 other Pacific Rim countries. From the outset of TPP negotiations, the Obama Administration has said it would “insist on a robust, fully enforceable environment chapter in the TPP.” Despite strong opposition among the negotiating parties, the U.S. has continued to advocate for meaningful and enforceable environmental obligations, including innovative conservation and marine fisheries provisions.[1]

The Administration’s proactive environmental stance in TPP negotiations excludes one key issue: climate change. The U.S. has refused to agree to the article in the environment chapter entitled “Trade and Climate Change,” even though it lacks any mandatory language. The article merely acknowledges that climate change exists, recognizes the need for cooperative action, and affirms the Parties’ commitments in other agreements.[2] The U.S. has put forth a counterproposal that renames the article “Transition to a Low-Emissions Economy,” strips the article of any mention of “climate change,” and removes references to adaptation and the United Nations Framework Convention on Climate Change (UNFCCC). [3]

At first glance the counterproposal appears to be a back step for the Administration and directly at odds with the President’s Climate Action Plan (CAP), which acknowledges that we are already experiencing the effects of climate change and recognizes the importance of international climate negotiations through the UNFCCC. However, upon further analysis, the counterproposal more likely indicates a strategic choice given partisan politics of Congress.

 The CAP arose out of the acknowledgment that federal climate action was not going to come out of Congress, where just over half of Congressional Republicans deny basic tenets of climate science. In his State of the Union address last year, President Obama announced “If Congress won’t act soon to protect future generations, I will.” Consequently, the CAP was designed to address climate change through executive power in order to circumnavigate Congress altogether.

The TPP, however, cannot be ratified without Congressional approval. President Obama is pushing for “fast-track authority,” which would streamline the approval process, requiring the Senate to either approve or deny without making amendments. In addition fast-track authority would result in the TPP being treated as a congressional-executive agreement, meaning that approval would require a majority vote of each house rather than by two-thirds vote of the Senate. A fast-track bill has been proposed, but its passage appears unlikely.  A number of Senate Democrats have expressed opposition to fast-tracking, including Majority Leader Sen. Harry Reid and Sen. Barbara Boxer. In addition, while top Republicans in the House of Representatives support fast-tracking because it increases the odds of ratifying the TPP, a number of House Representatives oppose the broad authority the bill would give the Administration.

If the President is unable to gain fast-track authority, then the Senate will be able to propose amendments and worse, filibuster. In that case, Senate Republicans would undoubtedly challenge any climate language in the TPP. Even if the Senate could agree on amendments, bringing amendments back to the negotiating countries could kill the TPP. If the fast-track is approved, TPP will require Republican support in order to get a majority vote in the House. Climate language could discourage Congressional Republicans from approving the agreement. Thus, the removal of any overt climate reference is likely a preemptory damage control measure.

The language of the counterproposal is further evidence that partisan politics motivated the rejection of the climate change provisions. In Congress, mere use of the term “climate change” has been a death sentence for legislation. This has led to creative attempts to develop legislation that reduces emissions without explicitly referring to climate change, such as through energy efficiency. The counterproposal language seems to have been crafted in the same vein. It does not remove all discussions of climate change, but instead shrouds it in the context of a “low-emissions economy” without reference to particular pollutants. Likewise, it maintains discussions of energy efficiency, sustainable transport and infrastructure, and removing fossil fuels subsidies, which, although central to climate change mitigation, have additional environmental and economic benefits.

Consequently, it appears that the U.S. counterproposal reflects a semantic battle with little practical consequence for climate policy. For example, a key concern about the TPP is that it gives foreign investors the power to bring compensatory claims against the U.S. in arbitral tribunals for measures that frustrate the “legitimate expectations” of their investment. Were foreign investors to challenge a measure intended to mitigate or adapt to climate change, a strong climate change provision would assist the U.S. in demonstrating that a reasonable investor would expect the development of climate regulations. However, the language in the counterproposal could accomplish the same end, since the agreement to work toward a “low-emissions economy” should also signal to investors that emissions reductions regulations are likely.

Nor is the counterproposal likely to result in reduced efforts to address climate change by negotiating parties, especially given that the climate change provisions as drafted are largely affirmational to begin with. Of course, there are broader concerns — to be discussed in a subsequent post — about whether the TPP as a whole will contribute to increased greenhouse gas emissions or cause a chilling effect on climate regulation among governments due to fear of liability. However, as to the counterproposal itself, the biggest risk is likely that it may raise questions about the Administration’s commitment to climate action among those who do not see the underlying political motives.

Photo credit: U.S. Government


[1] See Secret TPP Treaty: Report from Chairs of Environment Chapter for all 12 nations (WikiLeaks release: Jan. 15, 2014).

[2] Id.

[3] Summary U.S. counterproposal circulated to negotiating groups in Singapore the week of February 17, http://www.redge.org.pe/sites/default/files/20140218%20biodiversity%20climate%20change%20TPP.pdf

Aussie flagby Amanda Liu, CCCL Affiliate*

A review of the 2013 disclosures made in annual reports from a sample of Australian Securities Exchange (ASX) Top 20 listed entities has shown a lack of comprehensive risk identification and discussion which links climate change risks to business strategy and financial performance. The review found that many of the company annual reports which were considered contained only limited basic information on climate change risks, if any at all, rather than any substantive disclosure of the risks associated with climate change impacts and their materiality on operations, business strategy or financial performance. Read more »

A new paper by Katherine Carey looks at the different actions that state utility commissions in the Southeast have taken to ensure that their electric utilities are prepared for tomorrow’s storms.

The Gulf Coast region in the Southeastern United States is at especially high risk of more severe hurricanes and tropical storms, but there are several hardening and resiliency measures that, if implemented today, could lower recovery costs significantly by mitigating storm damages and speeding recovery. To determine which hardening and resiliency actions are being taken in one of the nation’s most vulnerable regions, the survey summarizes and compares the approaches of five state utility commissions: Alabama, Florida, Louisiana, Mississippi, and Texas.

The results indicate disjointed, widely variable approaches to storm hardening and resiliency among state commissions and utilities. In some of the states, notably Alabama, Louisiana, and Mississippi, closed-door proceedings as well as minimal reporting requirements make it unclear whether storm hardening and resiliency are high priorities, or even whether they are being discussed at all. The lack of publicly available information is likely hindering this region’s ability to develop a best-approach strategy to hardening and resiliency. If more information were publicly available, commissions and electric utilities in the region, as well as other stakeholders, would be better able to learn from each other and collaborate on identifying and prioritizing the most cost-effective hardening and resiliency measures.

In contrast, the public utility commissions of Florida and Texas have been more proactive. Commissions in both states have passed extensive reporting requirements for electric utilities, and both Commissions have encouraged public discussion on the issues by, among other things, funding localized research and reviewing at least some hardening and resiliency matters outside of the general rate case proceedings. The Florida Public Service Commission is unique in the extent to which it has addressed hardening and resiliency through regulatory requirements. The Commission requires utilities to go beyond reporting and take action in several identified areas related to hardening and resiliency.

The report also indicates that many state commissions are too narrowly focused on post-storm, reactive measures, with much less emphasis on proactive strategies. While all commissions surveyed have, in some way, addressed storm response planning and the use of certain post-storm cost-recovery mechanisms, most do not seem to have initiated any type of action plan for pre-storm hardening and resiliency measures, instead allowing electric utilities broad discretion to decide whether to initiate such actions and which actions to take.

The survey concludes with recommendations for future commission action, finding that a successful approach would involve more commission control and review of electric utilities’ hardening and resiliency measures. This would include more detailed reporting mandates and more substantive hardening and resiliency requirements, with all such requirements involving a stringent and public review process.

There should be more focus on proactive, pre-storm actions, and commissions should explore the possibility of expanding use of cost-recovery mechanisms to help incentivize utilities. Finally, commissions need to take more of a leadership role. They are in the best position to ensure that the most cost-effective hardening and resiliency measures are implemented. They also are more able to develop and implement a comprehensive, long-term strategy, based on an assessment and prioritization of localized vulnerabilities. The commission should also emphasize more collaboration amongst the many different stakeholders involved.

March Updates to the Climate Litigation Charts


Posted on March 5th, 2014 by Shelley Welton

Update #60 March 2014 gavel

Each month, Arnold & Porter and the Center for Climate Change Law collect and summarize developments in climate-related litigation, which we also add to our U.S. and non-US climate litigation charts. The March additions are listed below. (If you know of any cases we’ve missed, please email us at columbiaclimate at gmail dot com.)

FEATURED DECISION

Washington Environmental Council v. Bellon, No. 12-35323 (9th Cir. Feb. 3, 2014): added to the “Force Government to Act/Clean Air Act” slide. The Ninth Circuit denied rehearing en banc of its October 2013 ruling that plaintiffs seeking to compel the State of Washington to regulate greenhouse gas emissions from oil refineries did not have standing. Judge Ronald M. Gould, joined by two other judges, wrote a dissent from the denial calling the October ruling “overbroad” and warning that it would foreclose climate change-related citizen suits under the Clean Air Act and harm the public. Judge Gould wrote that the Supreme Court’s 2007 opinion in Massachusetts v. EPA, in his view, did not limit standing in environmental lawsuits related to climate change to states. Instead, he wrote: “The Supreme Court’s reasoning endorsed the principle that causation and redressability exist, independent of sovereign status, when some incremental damage is sought to be avoided. Accordingly, Massachusetts v. EPA also confers standing upon individuals seeking to induce state action to protect the environment.” In a concurring opinion, Judge Milan D. Smith, Jr. (author of the October opinion) wrote that the conclusion that plaintiffs lacked standing was compelled by the Supreme Court’s stringent requirements for standing in Lujan v. Defenders of Wildlife, as well as by Massachusetts v. EPA. Judge Smith reiterated the distinction between the instant case, in which private plaintiffs sought to compel promulgation of specific regulations, from Massachusetts v. EPA, in which sovereign states asserted a procedural right. Judge Smith rejected the dissent’s suggestion that the court had erected “new and inappropriate barriers to environmental litigation.” “Not so,” wrote Judge Smith. Rather, “[o]ur decision rests on a straightforward application of Lujan and Mass. v. EPA.” Read more »

The Spanish Islands Threatened by Oil Prospectors


Posted on February 27th, 2014 by Shelley Welton

Teresa Parejo NavajasIslands 1
Associate Professor of Law (Carlos III de Madrid University, Spain)
Visiting Scholar at the Center for Climate Change Law

The Balearic and Canary Islands – in the Mediterranean Sea and the Atlantic Ocean, respectively – are suffering from prospectors searching their waters for hydrocarbons (mainly oil or gas). This situation has become a serious threat to the environments and economies of those regions.

1.     The Canary Islands

The Canary Islands (or Canaries) form a Spanish archipelago of seven islands located just off the northwest coast of mainland Africa, 100 kilometers west of the border between Morocco and the Western Sahara. This archipelago is now in the news, not because of its beautiful subtropical weather and gorgeous volcanic beaches, but because it is exposed to a very environmentally risky project that has mobilized not only the Cabildos (the islands’ governments) and the Canary citizens[1], but also environmentalist groups from all over the world. Two years ago, an underwater volcano that appeared just off the coast of “El Hierro” (in the Southwest part of the Canaries)[2] reminded the islanders of the risks of Nature, but this time human activity is the force putting the islands in danger. Read more »

 9 comments  

Ethan I. Strell, CCCL Associate Director & Fellow

In an historic decision that will serve as a nationwide model, the New York State Public Service Commission on February 20 unanimously approved a settlement requiring Con Edison to implement state-of-the-art measures to plan for and protect its electric, gas, and steam systems from the effects of climate change.  Although specific to Con Edison, the Commission’s Order stated that these considerations “have important implications for the regulatory regime in New York,” and that the “obligation to address these considerations should be broadened to include all utilities.”[1]

The decision was issued in the context of Con Edison’s January 2013 petition for changes to its rates.  Although the Commission’s Order approves approximately $1 billion in storm hardening and resiliency measures, customer rates should remain essentially flat over the course of the rate plans.  Notably, the PSC decision ordered the continuation of the Storm Hardening and Resiliency Collaborative, which was created by the rate case parties to develop innovative resiliency measures and to address how the proposed $1 billion in storm hardening funds should be invested.  The Collaborative took place simultaneously with the rate case litigation, and will continue through at least 2014.

A coalition of NGOs and academic centers—the Columbia Law School Center for Climate Change Law, Natural Resources Defense Council (NRDC), Environmental Defense Fund (EDF), and the Pace Energy and Climate Center (Pace)—were full parties in the rate case and active participants in the Collaborative.

In the rate case, the NGO and academic coalition presented scientific testimony on climate change and expert technical testimony on rate designs that support electric vehicle charging, advocated for deploying more distributed generation and microgrids, and cross examined Con Edison’s witnesses on the Company’s long-term planning and storm preparation efforts.  The Columbia Center for Climate Change Law retained as an expert witness Dr. Radley Horton, a climate scientist at the Columbia University Earth Institute Center for Climate Systems, who testified about future climate conditions and how they are relevant to Con Ed’s operations and long-term planning.[2]

The Collaborative consists of four working groups addressing: (1) storm hardening design standards, (2) alternative resiliency strategies, (3) natural gas system resiliency, and (4) risk assessment/cost benefit analysis.  Through the design standard working group, Con Edison and the parties agreed on an interim minimum design standard of the latest FEMA 100-year floodplain elevation plus three feet of freeboard to protect critical infrastructure from future floods.  This “FEMA plus 3” standard will be reviewed to see if higher levels of protection are warranted.

Significantly, the Order confirms Con Edison’s commitment to conduct a Climate Change Vulnerability Study this year, which will provide important guidance on how the utility can best prepare for rising sea levels, more intense storms, heat waves, and other potential effects of a changing climate.  The scope of the Climate Change Vulnerability Study is found in Con Edison’s “Storm Hardening and Resiliency Collaborative Report.”[3]

In addition, the “alternative resiliency strategies” working group is tasked with identifying alternative response strategies designed to make the grid more efficient and resilient.  Such alternative strategies include developing critical peak pricing to reduce load during heat events, create rate options for customers that will encourage smart charging of electric vehicles, and empower customers to make smarter, lower-carbon energy-use decisions. The Collaborative will also identify areas where high-efficiency cogeneration systems and microgrids could be placed to reduce system load, isolate outages, and provide refuges of power “islands.

In addition to the Collaborative, the Company has agreed in the rate case settlement to pursue measures other than traditional infrastructure to meet expected load growth and maintain reliability. Such “non-wires” alternatives are a tremendous step away from traditional utility models and will engage smarter 21st Century demand-side measures to meet customer needs.  One such project will take place in Brownsville, Brooklyn and will save rate payers money while creating a more resilient and efficient grid.

On December 12, 2012, a group led by the Columbia Center for Climate Change Law filed a formal petition with the PSC asking it to require all the utilities it regulates to develop climate adaptation plans. This petition launched the process that led to the order requiring Con Edison to develop such a plan.[4]

 


[1] “Order Approving Electric, Gas and Steam Rate Plans in Accord with Joint Proposal,” February 21, 2014, at 71, available at http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId={1714A09D-088F-4343-BF91-8DEA3685A614}.

[3] Con Edison’s December 4, 2013 “Storm Hardening and Resiliency Collaborative Report” is available at http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId={E6D76530-61DB-4A71-AFE2-17737A49D124}.

The NGO and academic coalition’s comments on the report are available at http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId={789DF3B9-51E3-4DED-BB87-EBB34526B2EE}.

[4] The December 12, 2012 Petition is available at https://web.law.columbia.edu/sites/default/files/microsites/climate-change/files/Publications/PSCPetitionNaturalHazardPlanning_0.pdf.

by Nina Hart, Columbia Law StudentWall Street

In recent years, a major challenge facing companies and securities regulators has been when and how to disclose material risks related to climate change in federal securities filings.  In 2010, in response to a petition, the SEC issued an interpretive release on disclosure of climate change risks to assist companies in assessing when such disclosures must be made.[1]  A new working paper by Columbia Law Student Nina Hart, released by the Center for Climate Change Law (CCCL), focuses on the SEC’s release and assesses whether further federal guidance is needed, and how such guidance might be obtained.  Additionally, the paper addresses how companies might be held accountable in the absence of federal action.  Specifically, the paper argues that the New York Attorney General should use the Martin Act to investigate companies for nondisclosure and thereby help establish a disclosure framework that companies can use absent further federal guidance.

The working paper reviews SEC actions to date on the issue of climate change disclosure as well as other studies on disclosure rates to assess whether further guidance is warranted.  Based on this review, the paper concludes that, both before and after the 2010 interpretive release, disclosure rates and quality amongst companies have been inconsistent.  Additionally, although the SEC indicated in its 2010 interpretive release that it would take further actions to monitor disclosure practices and assess whether further guidance is necessary,[2] the paper argues that the agency has largely failed to do so. Read more »

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