Climate Law Update: Climate Change & Sustainable Energy News : Thelen Reid Law Firm : Renewable Energy, Construction, Project Finance Lawyers & Attorneys

• Who finds it easy -- or good business -- being green? The San Francisco Chronicle, citing a report from a New Hampshire nonprofit group, gives an accounting of climate-friendly companies.
• It's mercury, not climate issues, driving the opposition, but the Sierra Club is threatening to sue to block a number of coal-fired power plants, according to Reuters.
• The pending lapse of renewable energy tax credits causes the Christian Science Monitor to look at the implications, focusing on Arizona. 
• Nuclear power is on the minds of all three major presidential candidates, reports Reuters in a story carried on Planet Ark. 
• Democrats in the U.S. Senate unveil a new energy bill that taxes "Big Oil," according to a report on Reuters (see Democratic analysis of bill here). 
• The worldwide carbon market, now valued at $64 billion, "could become a victim of its own success and paralyze further progress," writes the Wall Street Journal's Environmental Capital, citing a new World Bank report (see World Bank press release here; text of report here).
• Iowa Gov. Chet Culver signs a bill promoting renewable energy in that state, reports The Messenger of Fort Dodge, Iowa (see Culver press release here).

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Gov. Ted Strickland of coal-heavy Ohio has signed a bill pushing his state's electric distribution utilities to make sure that 25 percent of the power they sell comes from "alternative" resources by 2025.

Under Senate Bill 221, that would include juice coming from such renewable sources as wind and solar, to other forms of generation, including "clean" coal, fuel cells and advanced nuclear, according to a statement by Strickland (see statement here; bill text here) and a report in the Toledo Blade (see story here).

To meet the mandate that at least 25 percent of the power come from "alternative energy resources," Ohio's legislation requires that "at least half shall be generated from renewable energy resources, including one-half per cent from solar energy resources," in accordance with a number of annual benchmarks. 

The Blade reported that the measure allows utilities to avoid full compliance with the standards if they can demonstrate that their attempts to comply would raise consumers' bills by 3 percent or more, a provision that disappointed some environmental groups.

In his statement, Strickland (pictured) lauded the measure:

"This bill, Senate Bill 221, will ensure predictability of affordable energy prices and maintain state controls necessary to protect Ohio jobs and businesses.

We will safeguard Ohio families by empowering consumers and modernizing Ohio’s energy infrastructure.

And we will attract the jobs of the future through an advanced energy portfolio standard—and today’s action by Ohio means that a majority of states now agree that these technologies represent the future of energy in the United States." 
 

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• The Asian Development Bank's head announces a new fund to combat damage caused by climate change, writes The Economic Times of India. 
• Scientists suggest species living in the tropics may be in more serious danger than those living near the Arctic, reports the CBC.
• The world can reach a significant new climate change agreement by the end of next year, if current talks keep up their momentum, the head of the United Nations climate panel says, according to Reuters.
• A connection between rising shark attacks and global warming? Perhaps, the Guardian newspaper writes.
• A new book that offers "a profound academic, spiritual, theological, exegetical, politically grounded and energizing rendering of the global climate and sustainability crisis" is positively reviewed by The Christian Century. 
• Sempra Energy Chairman Donald E. Felsinger says there is enough scientific evidence in place that "we need to take action" to mitigate the effects of climate change, according to an interview with the New York Times appearing over the weekend
• The Bush administration literally chose to "add more fuel to the global warming fire" by moving ahead to open the Chukchi Sea to drilling, argues the Audubon Magazine.
• Ethanol mandates "are just an appetizer for a much larger big business feast should a liberal Congress be paired with a liberal White House," argues a posting on the Heritage Foundation's blog, The Foundry.   
  
  

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This saving the planet stuff just isn't complicated enough, it seems.

Underscoring the importance of the finer points involved in establishing a market-based approach to controlling greenhouse gas emissions, a new report (accessible here) sponsored by a fascinating collection of interests shows how huge sums are at stake depending on how such a program is structured.

The most intriguing part of the document examines one of the most controversial parts of a cap-and-trade scenario: the distribution of emissions credits or "allowances" that will determine how many tons of heat-trapping gases that, say, a power plant can emit over a year. It looks at the differences in formulas contemplated by two bills now before Congress, the Lieberman-Warner Climate Security Act and the Bingaman-Specter Low Carbon Economy Act. The document also adds another twist, such as examining what would happen if credits were allocated based on each company's electricity output, versus its share of emissions.

The report generally seems to side with Lieberman-Warner. That bill would require selling more of the credits initially and it would also allocate some credits for sale to benefit the public.

The document also finds that some utilities, such as those with relatively cleaner technologies, would fare vastly better under a system in which credits were distributed on the basis of power output. However, both bills so far propose to allocate the allowances to electric providers based on their historic carbon dioxide emissions. 

The bills are named for their sponsors, Sens. Joe Lieberman, I-Conn., John Warner, R-Va., Jeff Bingaman, D-New Mexico, and Arlen Specter, R-Pa.

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On Earth Day, attention naturally turns to all things green – as in money.

Pocketbook issues are at the center of a number of new reports that assess the impact of efforts to combat climate change and promote the development of renewable sources of energy. One report shows government subsidies taking a big jump in recent years with renewables such as solar and wind getting a proportionately large share of the money.

The Environmental Defense Fund has come out with a document that studies the studies out there on the economic cost of a cap-and-trade system to cut emissions of greenhouse gases. Perhaps coming as no shock, the organization concludes that “a clear consensus” among the models demonstrates such a market system “is consistent with long-term economic growth.” The overall cost of capping the gases would amount to less than 1 percent of household budgets over the coming two decades, according to the EDF, which supports market approaches to the problem (see press statement here; text of study here).

Release of the analysis comes as the U.S. Senate is readying to take up the Lieberman-Warner Climate Security Act, which would establish a cap-and-trade system in the country. It also comes against a background of other reports issued by the government and business organizations showing potentially significant  economic impacts from such a system (see Climate Law Update story here).

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President Bush Wednesday set a goal of halting the increase in the nation’s greenhouse gas emissions by 2025, a significantly less ambitious objective than that established by some of the states, including California.

But in a speech in the White House Rose Garden, Bush also opened the door to a binding international agreement on cutting emissions.

In his speech, the president warned against raising taxes or imposing mandates or demands for “sudden and drastic emissions cuts that have no chance of being realized and every chance of hurting our economy.” He also argued in favor of promoting “emission-free nuclear power” and encouraging investments needed to produce electricity from coal without releasing carbon (see full text of statement here; see White House fact sheet here).

Bush called the new goal to stop the growth of U.S. greenhouse emissions by 2025 “a major step forward in America’s efforts to address climate change.” Yet he outlined few specific steps, beyond some already taken such as requiring better automobile fuel efficiency, to achieve the target. Among his goals, he said, was to create a new incentive to make the development, commercialization and use of new lower-emission technologies more competitive.

By contrast, California’s anti-global warming law, AB 32, requires the state to roll back its emissions of heat-trapping gases to 1990 levels by 2020, an estimated 25 percent reduction. Even further cuts would be required later under an order issued by Gov. Arnold Schwarzenegger (see text here). Additionally, all three major presidential candidates have endorsed emissions limits and trading programs.

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Governors in Vermont and Utah have become the latest to sign legislation intended to curtail greenhouse gas emissions, boost renewable energy generation, or both.

Of the two, Vermont’s was the more comprehensive (see text of bill). Senate Bill 209, signed by Gov. Jim Douglas, establishes an efficiency program he said was intended to help homeowners and businesses reduce fuel consumption and save money (see press release). At least part of the money would come from the state’s participation in the Regional Greenhouse Gas Initiative’s cap-and-trade program.The first auction under that fast-developing program is scheduled for this fall (see press release).

One key provision in the bill appears to encourage cooperative efforts among the population to develop local renewable energy projects. 

Utah Gov. Jon Huntsman put his name to a measure that establishes a renewable portfolio standard for the state. Senate Bill 202 (see text) sets a goal for Utah utilities, both municipal and privately owned, that would mean 20 percent of their “adjusted” electric sales would come from renewable sources by 2025. That’s somewhat more modest than standards set in other states, including California, which has established a 20 percent renewable goal by 2010 and is considering efforts to increase that proportion.

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This Commentary was written by Thelen Reid Brown Raysman & Steiner attorneys Peter V. Allen and Richard M. Shapiro:

With the recent increase in concern about global warming and energy security, supporters of nuclear power are arguing that it is now time to restart the construction of nuclear power plants in the US. The national debate around nuclear power has focused on cost, safety, and waste disposal issues, but California presents additional constraints on the siting of nuclear power plants. These constraints, along with California’s significant renewable energy resources, combine to make renewable generation a better choice in California.

Even beyond California’s statutory moratorium on the construction of new nuclear power plants, other factors, including the politics and economics of water, the prevalence and location of earthquake faults, and California’s hybrid electricity market structure, render nuclear power a far less attractive option in California than in other parts of the US. At the same time, California has abundant renewable resources, including solar, wind, and geothermal. The result: in California, it is more practical to get additional electricity from new renewable plants, not new nuclear plants.

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Despite all the talk about greenhouse gas reductions and the means to achieve them, including establishing new trading schemes for carbon, a pair of new studies suggests the nation has a ways to go.

One of the documents, in which a former U.S. Environmental Protection Agency official has parsed the latest government data, shows that carbon dioxide emissions from power plants appear to be back on the rise (see press release and report and appendices). That follows on the heels of government study released only this month showing overall carbon emissions, including those from power generation, had fallen just a year earlier (see study and Climate Law Update article).

In addition, a Department of Energy study of Western utilities suggested that some of them are including fairly optimistic estimates about the impact of trading mechanisms on carbon prices. The study (which can be seen here) appeared to gently urge them to boost those figures. At the same time, it found that the utilities are aggressively planning to increase efficiency and add new renewable generation to their portfolios.

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Daniel Yergin, a widely known energy expert who closely advises  the oil and gas industry, is predicting a rosy future for renewable energy, and other "clean" technologies such as nuclear and hydropower, partly as a result of public concern over global warming and driven by subsidies and government mandates. 

"High energy prices, climate change and energy security are converging as the new engine driving the development of clean energy," Yergin (pictured at left), chairman of Cambrige Energy Associates, told a gathering at the National Governors Association in Washington, D.C. (Feb. 23). "There is a major shift in public opinion towards clean energy, which is being bolstered by the growing conviction that new carbon policies will reshape the competitive landscape of the global energy business."

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