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  • Wisconsin Lawyer
    April
    10
    2009

    Emerging Practice Area: The Regulation of Greenhouse Gases

    Robert Zeinemann

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    Given the number of current climate laws or initiatives in Wisconsin and other states aimed at regulating greenhouse-gas emissions and developing “green technologies,” and the high probability of sweeping federal government action within the next few years, lawyers should stay at the forefront of this rising legal practice area.

    Wisconsin LawyerWisconsin Lawyer
    Vol. 82, No. 3, March 2009

    Windmill

    Major federal, state, and local regulatory schemes to address global climate change are on the horizon. These regulations will affect several areas of law practice ranging from energy and land use to carbon trading and intellectual property, creating opportunities for lawyers.1

    Federal Initiatives

    President Barack Obama has pledged to reduce greenhouse gas emissions 80 percent by 2050.2 He favors an economy-wide cap-and-trade approach that would set overall limits on the amount of global warming gases emitted by auctioning a set number of pollution credits (the cap) and creating a market where emitters may buy or sell credits to pollute (the trade).3 The cap would be reduced over time until the emissions target is met. If pollution credits are auctioned as President Obama and several senators propose, several trillion dollars in new marketable assets will be created between now and 2050 and an estimated $150 billion will be generated in the auction’s first year.4 Not known is who would get the proceeds from an auction or how the money would be spent: It could be used to overhaul the electricity grid, relieve electricity consumers facing higher prices, or bankroll new technologies.

    About a dozen legislative proposals addressing climate change, many with bipartisan sponsors, were introduced in the 110th Congress.5 Most proposals were cap-and-trade schemes with specific greenhouse-gas-emissions targets. Especially important were two bills, introduced by senators Lieberman and McCain and senators Lieberman and Warner. The former was significant because then-Sen. Obama was a cosponsor, and the latter was significant because it advanced out of committee to the full Senate before it was defeated by filibuster.6 Those bills will serve as templates for future proposals.

    Climate change legislation is poised to pass Congress and be signed into law. The economic recession and financial collapse have rearranged the timetable for action on a cap-in-trade bill;7 nevertheless, Prof. Victor Flatt, A.L. O’Quinn Chair of Environmental Law at the University of Houston, predicts that climate change legislation “will almost certainly be enacted within two years.”8 Congress has already enacted a law requiring companies to report their greenhouse-gas emissions to the Environmental Protection Agency (EPA), and gathering that information is the first step in reducing emissions via a cap-and-trade system.9

    Even absent expected legislation, federal climate change regulations are a possibility. The U.S. Supreme Court ruled, in Massachusetts v. EPA,10 that greenhouse gases fall within the Clean Air Act’s definition of an air pollutant; hence, the EPA already has authority to regulate greenhouse-gas emissions from motor vehicles if it determines that such emissions endanger public health. President Obama, therefore, could direct the EPA to use its authority to promulgate agency regulations addressing climate change.

    Regional and State Initiatives

    Several regional initiatives are moving forward ahead of federal action. The Western Climate Initiative (WCI) is a coalition of seven states and four Canadian provinces collaborating on the regulation of greenhouse gases under a regional cap-and-trade system.11 The WCI has set an economy-wide greenhouse-gas-emissions target of 15 percent below 2005 levels by 2020.12 Pursuant to the WCI, several states, including California13 and Washington,14 have adopted legislation setting goals for reducing greenhouse gases, and Washington has taken steps toward incorporating climate change impacts into planning under the state’s Growth Management Act.15

    In 2005, 10 states in the Northeast formed the Regional Greenhouse Gas Initiative (RGGI), which aims to reduce greenhouse gas emissions in the Northeast from coal-fired power plants. Unlike the WCI’s system, the RGGI’s cap-and-trade system is not economy-wide but instead is focused on emissions from the energy sector, with the goal of cutting greenhouse- gas emissions 10 percent by 2018.16 Emissions credits are being sold in a series of auctions. In September 2008, the RGGI raised $38.6 million with its first auction of carbon-dioxide-emissions credits; a second auction in December 2008 raised $106.5 million.17 The RGGI member states will receive those funds to invest in energy efficiency and clean energy technologies.18

    Robert 
Zeinemann

    Robert Zeinemann, Marquette 2006, is an attorney, and former land-use planner, practicing municipal, environmental, and land-use law in Seattle, Wash. He has lectured and published on municipal law, urban growth, and governance issues. He is a member of the American Institute of Certified Planners and holds an M.A. in public affairs from U.W.–Madison. Reach him at com robert.zeinemann uwalumni uwalumni robert.zeinemann com.

    In the Midwest, Wisconsin Gov. James Doyle, along with five other Midwest governors and the premier of Manitoba, met in Milwaukee and signed the Midwestern Greenhouse Gas Reduction Accord in November 2007.19 The accord commits the signers to work together to cut greenhouse-gas emissions. It requires: 1) greenhouse-gas-reduction targets and timeframes; 2) development of a market-based and multi-sector cap-and-trade mechanism to help achieve greenhouse-gas-reduction targets; 3) establishment of a climate registry to enable tracking and crediting for entities that reduce emissions; and 4) development and implementation of mechanisms and policies as needed to achieve the emissions reduction targets.20

    To meet reduction targets, greenhouse-gas regulations will affect sectors of the economy in addition to energy producers; the transportation and building sectors are two examples. Because reducing emissions at stationary sources (for example, smoke stacks) alone may not be enough to meet targets, new regulations will address mobile sources of greenhouse gases (for example, vehicles), in part by encouraging or requiring transportation and land-use reforms. California and Washington, for instance, have adopted laws aiming to reduce greenhouse-gas emissions through changes in transportation and land-use planning.21

    Wisconsin has not adopted climate change legislation, but Gov. Doyle has been active on the issue. He created a task force on global warming, which issued a comprehensive final report in July 2008.22 The report makes more than 50 recommendations, including reducing greenhouse-gas emissions in Wisconsin to 2005 levels by 2014, to 22 percent below 2005 levels by 2022, and to 75 percent below 2005 levels by 2050.23 The governor created an office of energy independence to support his goals for Wisconsin to receive 25 percent of its electrical power and 25 percent of its vehicle fuel from renewable resources by 2025.24

    Local Government Initiatives

    Local governments are addressing climate change, through such mechanisms as green-building codes, weatherization programs, and growth management and transportation policies. More than 900 mayors, including 17 in Wisconsin, have signed the U.S. Conference of Mayors Climate Protection Agreement.25

    Green-building codes are a way that local governments promote reduction of greenhouse-gas emissions. Energy used for heating, cooling, and lighting buildings is responsible for more than 40 percent of greenhouse-gas emissions in the United States.26 Green-building codes require new buildings to be energy-efficient, and retrofitting during renovations improves the energy efficiency of existing buildings.27

    Local governments control land-use planning. Mixed-use developments with multi-modal transportation systems reduce the length and frequency of vehicle miles traveled (VMT), which in turn reduces greenhouse gases. Changes in land-use patterns could reduce VMT 12 percent by 2050.28

    King County, Wash., is using its authority to address climate change. In 2008, King County added greenhouse-gas emissions to its environmental review process for new development, and now a project can be denied or conditionally approved based on the project’s estimated greenhouse-gas emissions.29

    Opportunities for Lawyers

    Climate-change law will eventually become its own practice area. Several major law firms have created climate-change practice groups to position themselves as leaders in this emerging area of law.30 Regulated companies will need lawyers to monitor, report, and verify carbon credits, make trades, conduct due diligence for a variety of transactions, and find locations for new clean-energy projects. Attorneys, for example, will assist energy companies to obtain permits for the tens – perhaps hundreds – of thousands of new power-generating wind turbines that will be put into place in the coming decade. Government agencies will need attorneys to implement the new laws and regulations and bring enforcement actions.

    Attorneys with backgrounds in energy, land use, construction, and transportation would be wise to monitor climate-change initiatives and generally increase their knowledge of the topic. That list is not exhaustive: The vast scale and dire consequences of the global warming problem mean that its solutions will be multifaceted, penetrating many areas of the law.

    Even legal practice areas not directly connected to greenhouse-gas emissions will be affected by schemes to address climate change. President Obama wants 25 percent of U.S. energy to be produced from renewable sources by 2025 and has pledged to invest $150 billion in clean energy.31 This shift away from carbon-based fuels will require new “green technologies” to be developed and brought to market, creating increased demand for legal services to patent new technologies and assist business start-ups. 

    It is difficult to overstate the coming changes in law and policy. In the 1960s and 1970s, a shift in the public’s awareness created a wave of new federal legislation that created the present alphabet soup of environmental regulations and spurred the field of environmental law. Another paradigm shift is upon us today. “Climate-change regulation probably will have more impact than any energy or environmental policy initiative that has ever emerged from Congress,” said Daniel Adamson, cochair of the climate-change practice group in the Washington, D.C., office of Seattle-based Davis Wright Tremaine and former Deputy Assistant Secretary at the U.S. Department of Energy overseeing renewable energy research and development, and climate change programs.32 Prof. Patrick Parenteau, who teaches a climate-change law course at Vermont Law School, which has a top-ranked environmental law program, agrees: “Climate law may well swallow environmental law before the end of the century as it propels the shift from command-and-control regulations to market-based approaches.”33

    Conclusion

    A consensus exists among the public and politicians that climate change must be addressed.34 Approximately 25 states have climate laws or initiatives, including significant new laws in California, and commitments by states participating in the regional WCI and RGGI cap-in-trade programs. Wisconsin is a signatory to the Midwestern Greenhouse Gas Reduction Accord, and Gov. Doyle has shown a commitment to addressing climate change. Moreover, a significant number of local governments are addressing the problem. Given these current initiatives and the high probability of sweeping federal government action within the next few years, lawyers should stay at the forefront of this rising legal practice area by keeping current on new and pending legislation.

    Endnotes

    1Ed Bean, High Expectations for Climate Work, Law.com, Dec. 1, 2008, available at <www.law.com/jsp/article.jsp?id=1202426354627>; Eric Torbenson, Lawyers Preparing for Explosion of Climate-related Work, Dallas Morning News, June 24, 2007, available at <www.dallasnews.com/sharedcontent/dws/bus/stories/062507dnbusgreenlawyers.37f90e0.html>.

    2John M. Broder, Obama Affirms Climate Change Goals, N.Y. Times, Nov. 18, 2008, available at <http://www.nytimes.com/2008/11/19/us/politics/19climate.html?hp>. The year 1990 is used as the baseline for the 80 percent reduction in emissions. Barack Obama and Joe Biden on the Environment, available at <www.barackobama.com/pdf/issues/EnvironmentFactSheet.pdf>.

    3Barack Obama and Joe Biden on the Environment, available at <www.barackobama.com/pdf/issues/EnvironmentFactSheet.pdf>.

    4Marc Gunther, A $3 Trillion Climate Change Battle, Fortune, May 15, 2008, available at <http://money.cnn.com/2008/05/14/news/economy/climate_change_bill.fortune/index.htm>.

    5Bingaman-Specter (S 1766), Lieberman-McCain (S 280), Kerry-Snowe (S 485), Waxman (HR 1590), Sanders-Boxer (S 309), Feinstein-Carper (S 317), Alexander-Lieberman (S 1168), Stark (HR 2069), Larson (HR 3416), Lieberman-Warner (S 2191), Dingell (Draft), Udall-Petri (Draft, May 2007).

    6Juliet Eilperin, Senate Leaders Pull Measure on Climate: Democrats Lacked Votes to End Filibuster, Wash. Post, June 7, 2008, at A3.

    7Darren Samuelsohn, Economic Crisis Rattles Cap-and-Trade Debate, Earth News, available at <www.earthportal.org/news/?p=1744>; see Mark Rice-Oxley, Financial Crisis Threatens Climate Change Momentum, Christian Sci. Monitor, Nov. 13, 2008, available at <http://features.csmonitor.com/environment/2008/11/13/financial-crisis-threatens-climate-change-momentum/>.

    8Victor B. Flatt, Evolving Trends in Climate Change Legislation, 35 Envtl. & Land Use L. Newsl. 15 (Aug. 2008) (published by Environmental and Land Use Section, Washington State Bar Association). On Nov. 30, 2008, Flatt affirmed the quote in an email to this author.

    9EPA to Establish Nationwide, Mandatory Greenhouse Gas Reporting Scheme by 2009, Envtl. News, Jan. 16, 2008, by Marten Law Group, Seattle, Wash., available at <www.martenlaw.com/news/?20080116-ghg-
    reporting-scheme
    >.

    10549 U.S. 497 (2007).

    11<www.westernclimateinitiative.org>.

    12Lisa Stiffler, Western States’ Plan Aims to Cut Greenhouse Gas, Seattle Post-Intelligencer, Sept. 23, 2008, available at <http://seattlepi.nwsource.com/local/380225_climate24.html>.

    13Cal. Health & Safety Code § 38500 et al. (2007). In 2002, California adopted legislation addressing greenhouse-gas emissions from motor vehicles; however, the Bush administration denied the state a waiver needed for it to set vehicle-emissions standards stricter than those under federal law. Micheline Maynard, E.P.A. Denies California Emission’s Waiver, N.Y. Times, Dec. 19, 2007, available at <www.nytimes.com/2008/09/16/us/16carbon.html>. On Jan. 26, 2009, President Obama issued a memorandum ordering the EPA to reconsider its past rejection of the waiver. California Request for Waiver Under 42 U.S.C. 7543(b), the Clean Air Act, 74 Fed. Reg. 4905 (Jan. 28, 2009), available at <http://edocket.access.gpo.gov/2009/pdf/E9-1939.pdf>.

    142007 Wash. Laws ch. 307; 2008 Wash. Laws ch. 14.

    152008 Wash. Laws ch. 289.

    16<www.rggi.org>; see also Felicity Barringer & Kate Galbraith, States Aim to Cut Gases by Making Polluters Pay, N.Y. Times, Sept. 15, 2008, available at <www.nytimes.com/2008/09/16/us/16carbon.html>.

    17Press Release, Regional Greenhouse Gas Initiative Inc., RGGI States’ CO2 Auction Continues Strong Performance (Dec. 19, 2008), available at <www.rggi.org/docs/Auction_2_Release_Final_08_12_19b.pdf>.

    18Id.

    19Midwestern Greenhouse Gas Accord, available at <www.midwesternaccord.org/midwesterngreenhousegasreductionaccord.pdf>.

    20Id.

    212008 Wash. Laws ch. 289; Press Release, Calif. Office of the Governor, Gov. Schwarzenegger Signs Sweeping Legislation to Reduce Greenhouse Gas Emissions through Land-Use (Sept. 30, 2008), available at <http://gov.ca.gov/press-release/10697>.

    22Tia Nelson & Roy Thilly, Wisconsin’s Strategy for Reducing Global Warming, Governor’s Task Force on Global Warming, Final Report, July 2008, available at <http://dnr.wi.gov/environmentprotect/gtfgw/documents/Final_Report.pdf>.

    23Id.

    24Exec. Order. No. 192 (Wis. 2007), available at <www.wisgov.state.wi.us/journal_media_detail.asp?locid=19&prid=2611>.

    25<http://usmayors.org/climateprotection/list.asp>.

    26Marilyn A. Brown, Toward a Climate-
    Friendly Built Environment
    , Pew Center on Global Climate Change 6-9 (2005).

    27Id. at 11.

    28Id. at v.

    29King County, Wash., Exec. Order No. PUT 7-10-1 (Oct. 15, 2007); King County, Wash., Ordinance 16263 (Oct. 6, 2008).

    30Firms with climate-change practice groups include Vinson & Elkins LLP; Thompson & Knight; Latham & Watkins LLP; Barnes & Thornburg LLP; Hunton & Williams LLP; Locke, Lord Bissell & Liddell LLP; Pepper & Hamilton LLP; Perkins Coie LLP; Davis Wright Tremaine LLP; VanNess & Feldman PC; Thompson & Hine LLP; Stoel Rives LLP; Holland & Hart LLP; Sheppard, Mullin, Richter & Hampton LLP; Pillsbury, Winthrop, Shaw & Pittman LLP; and Skadden, Arps, Slate, Meagher & Flom LLP. In Wisconsin, both Michael Best & Friedrich LLP and Foley & Lardner LLP list climate change among the legal services within their environmental law practices, although neither promotes a stand-alone climate-change group. Not only large firms are involved: The Marten Law Group, a 10-lawyer boutique firm in Seattle, is successfully promoting its climate-change practice.

    31Beth Daley, Obama Urged to Create ‘Green New Deal,’ Boston Globe, Nov. 24, 2008, available at <www.boston.com/news/science/articles/2008/11/24/obama_urged_to_create_green_new_deal/>.

    32Daniel Adamson, D.C. Overview on Climate Change Legislation, presented at the Mid-C Seminar, July 23, 2008, Wenatchee, Wash., available at <www.dwt.com/practc/climate/07-08_ClimateChangeLegislation.pdf>. The quote was reviewed by Adamson and accepted by him in an email to this author on Oct 7, 2008.

    33Email to this author from Patrick Parenteau, Dec. 5, 2008.

    34See Richard Black, ‘World Mandate’ on Climate Action, BBC News Web site, Nov. 26, 2008 (describing opinion poll taken in 11 countries), available at <http://news.bbc. co.uk/2/hi/science/nature/7748247.stm>.