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

Theoretically, an eventual placement of the animals on the list could lead to restrictions on a number of the local activities, as well as adding the agency as a regulatory player in combating climate change. The endangered species law contains provisions mandating that “federal departments and agencies shall seek to conserve endangered species and threatened species and shall utilize their authorities in furtherance of the purposes of this act.”

Under the law, regulators throughout government are supposed to consider potential impacts on endangered species when carrrying out their duties. That means, for one, consulting with colleagues in the wildlife regulatory agencies. It's a wide net that environmentalists believe should be used to cover government activities such as issuing permits for power plants or new highway construction.

Cummings said the seals face a "double-barreled threat" both from local development, such as oil and gas projects, and from greenhouse gas-related global warming. He noted that new threats to the animals might also develop as the ice disappears, allowing for shipping lanes to open and for additional fisheries to develop.

"It's being viewed as the new gold rush," he said. A listing of the seals would give the creatures some additional protections if the new developments occur.

But he said there would also have to be efforts to curtail emissions of greenhouse contributors such as carbon and methane.

"If we don’t stop global warming, there’s not much we can do for these species,” said Cummings, whose office is in Joshua Tree, California. He noted, for instance, that unlike some other marine mammals such as the walrus that can use dry land as a habitat of last resort, the ribbon seal is never seen on land.

In addition, he said other issues need to be examined “pro-actively,” including the impacts of an ocean fishery that may be shifting geographically northward along with warming waters.

A listing by the fisheries service would also engage an agency, which is housed in the U.S. Commerce Department's National Oceanic and Atmospheric Administration, that the environmental group feels has been historically more responsive to endangered species considerations than its sister bureaucracies. That latter category includes the Interior Department’s Fish and Wildlife Service, with which the organization has repeatedly tangled.

Part of the goal, Cummings said, is to “get [the fisheries service] involved in species management in a changing climate.”

Doug Mecum, acting administrator for the fisheries service’s Alaska region, was reluctant to predict what would result if the seals were to be listed.

“We’re kind of a long ways away from determining what, if anything, might be done,” he told Climate Law Update. He acknowledged, however, that “it’s kind of mind-boggling given the potential scope” of actions that theoretically could be implicated.

At the same time, Mecum suggested his agency’s specific authority had limits.

“I think that first and foremost you look at things under your immediate control,” he said. For example, the agency has since the early 1990s listed some part of the Stellar sea lion population as threatened and others endangered, and officials have identified threats to animals as  diverse as killer whales because of climate change and issues related to the commercial fishing industry. He said the agency has little it can do about the first two and so it has concentrated on regulation related to the fisheries (see recovery plan here).

When it comes to the seals, he said, one thing to look at would be finding ways to mitigate the impact of oil and gas development in their habitat.

On the larger issue of how multiple government agencies would deal with species found to be threatened by climate change, Mecum said he “wouldn’t hazard a guess” about what the future holds.

“This is pretty much new ground we’re breaking here,” he said.      

Clearly, organizations such as Cummings’ intend to press the issue. The Center for Biological Diversity has targeted global warming’s alleged effects on a number of cold-climate animals, including the polar bear and the Pacific walrus, in addition to the seals. It recently joined with other environmental groups to sue the fish and wildlife service (see Climate Law Update story) to prod some action out of the agency on listing the bears. The group has also sent the agency a formal request (see press release and petition) to protect the walrus under the endangered species law.  Regarding more temperate regions of the world, the group successfully pushed the fisheries service into listing two species of Florida and Caribbean coral as threatened because of global warming, and designating "critical habitat" for the invertebrates (see press release).

But traditional wildlife agencies aren’t the only ones facing the group’s legal assault. Attorneys for the organization recently enlarged a lawsuit against the U.S. Department of Energy regarding that agency’s designation of new power transmission line corridors. The lawsuit claimed officials allegedly failed to consider the impacts on endangered species, specifically by not going through the inter-agency consultation process (see lawsuit and Climate Law Update story). In addition, the environmental group in 2007 won a federal appeals court ruling against the U.S. Department of Transportation that just last week produced action to begin considering global warming when setting fuel economy standards for light trucks and sport utility vehicles (see Climate Law Update story).

(Photo of ribbon seal courtesy of NOAA) 

Although Brown, among other actions, has already sued and settled with one California county (see also press statement), and struck a separate legal deal with a major petroleum company (settlement and press release), he received a generally warm welcome from the officials. He even drew laughter when he told them his office would “help” them move forward by suing their city councils.

Brown advocated what he called “elegant density” in urban areas as a primary means of achieving lower emissions by reducing the time people spend commuting in their cars. According to California Energy Commission estimates, nearly 41 percent of the state’s greenhouse gas pollutants come from transportation.

“It’s up to you. You’re the custodians of land use and land use is connected to vehicle miles traveled,” Brown said in outlining his anti-sprawl agenda.

“The biggest thing of all is to shift the outward pressure and make it turn inward to a more elegant dense vibrant urban experience. That’s what local government has to do,” he said. “Now we have to get people from the suburbs to start coming back.”

Brown noted with some bemusement that when he was mayor of Oakland he advocated attracting 10,000 more residents into the central urban area but was met by opponents wielding CEQA challenges. He also noted that the slumping housing and construction market could actually give local officials some breathing room to “align land use with the need for a lower-carbon future.” Local officials, he said, need to include the new concepts in the design of general plans and city zoning, rather than waiting until they are presented with specific development projects.

Brown, a former California governor, noted he has long been talking about limits on growth and consumption, sometimes to little effect.

"Turns out that California never grew so fast as when I declared we were into an era of limits," he joked.

Nichols, who in the past has criticized Brown’s legal tactics in his push to force consideration of global warming in long term development, transportation and industrial plans, nevertheless echoed much of his theme in her remarks. She said that unlike previous attempts to control other forms of air pollution, “we can’t get there from here with technology alone.” Part of the reason for that, she said, is the length of time it takes to replace the existing fleet of vehicles on the road.

“For the first time under AB 32 we are going to have to take action that limits the growth and amount of use of [vehicle miles traveled],” Nichols said. “That’s the little hidden fact that’s not being talked about as much when people talk about the global warming problem.”

She noted that the state has in the past not had a lot of success in promoting so-called smart growth, and she recalled that some “brute force” attempts to limit vehicles, such as through fees and bans on parking, have been rejected “pretty roundly.” But she suggested much of that might have to change.

“We’re going to have to find some ways to create new incentives as well as, I think, potentially new directions that we’re going to be developing in this area,” she said.

Local government representatives in the coming weeks and months will be getting a big dose of global warming. On Friday, they were invited to attend another meeting in Oakland with officials putting together the air board’s AB 32 blueprint, or “scoping plan.” In addition, four more workshops in the series kicked off Thursday were scheduled for April 3 in Sacramento, April 24 in Visalia, May 15 in Los Angeles and May 23 in Monterey. More information is available from the Local Government Commission.

(Photo of Jerry Brown via Wikipedia)

“Clean energy has moved from the margin to the mainstream and the proof is in these numbers,” Pernick said in a statement announcing the report. “Amid last year’s plummeting housing prices, rising foreclosure rates and record high oil prices, clean energy continued to provide a bright spot in an otherwise sluggish economy.”

Wind constituted the largest component of the global increase in capacity, REN21 reported; solar voltaics connected to the grid comprised the fastest growing energy technology. The United States was the leader in new wind capacity added each year, as well as ethanol production, according to REN21. Clean Edge, meanwhile had figures showing wind power sales jumped by an estimated 68 percent in 2007 to $30.1 billion compared to a year earlier, equalling the generation of 20 conventional fossil-fueled plants.

Ethanol production also spiked in the United States, according to another report, this from the Renewable Fuels Association, an industry group. It estimated that the country produced 423,000 barrels of ethanol per day, an increase of more than 34 percent from a year earlier (see press release and economic report).

Meanwhile, a California company, Ausra, Inc., issued a report (view press release and report here), which concluded that more than 90 percent of the United States electrical grid and auto fleets’ energy needs could be met by solar thermal power. The company happens to be the developer of such technology, which uses fields of mirrors to generate heat and drive steam turbines.

Several forces appeared to be driving the global renewable industry’s numbers, experts noted. According to New Energy Finance’s press statement:

"Among the key factors pushing [the] numbers sharply upwards in 2007 were government policies around the world to promote renewable power and cleaner fuels, oil prices approaching $100-a barrel and rising corporate and investor awareness of the opportunities in clean energy.

One of the themes of 2007 was geographic diversification. Western Europe and North America continued to enjoy sharp increases in VC/PE, public market and project investment – but the momentum spread out to include other developed economic regions such as Eastern Europe and Australia. Even more significant was the pick-up in activity in emerging economies, with China moving strongly ahead with projects in wind, biomass and energy efficiency, Brazil seeing huge investment interest in its sugar based ethanol sector, and Africa starting to see renewable energy and efficiency as partial answers to its power shortages."

In speaking to Climate Law Update, Clean Edge's Pernick also cited the fact that while the costs of fossil fuels were on the rise, the technology used for wind and solar is getting cheaper. In addition, he said many governments are taking steps, such as imposing renewable portfolio standards requiring utilities to supply customers a certain amount of power from renewable sources. The governments, he said, are interested in attracting jobs and other economic gains.

“They’re competing to be clean tech leaders,” Pernick said.

He also noted that to reduce greenhouse gas emissions, public officials are moving toward establishing a price on carbon, either through cap-and-trade systems or other market means.

“There’ll be mandatory markets,” he said.

Investment, said experts such as Micael Liebreich, chairman and CEO of New Energy Finance, must accelerate. While 2007 was strong, he said in the company's statement, “on our estimate a further, fivefold increase is required for major countries to meet their own ambitious targets for reductions in greenhouse gas emissions.”

Clean Edge’s report, however, also warned that some clouds remain on the horizon. Those include the rising impact of biofuel production on food supplies and commodity agriculture prices and the uncertainty over production tax credits for renewables. And, despite the recent gains in renewables, they still represent only about 3.4 percent of global power generation, according to the REN21 report. That doesn’t include large hydropower projects, accounting for about 15 percent of the generation total.

Which brings us to Hoover Dam. And another new report, this one prepared by researchers at the Scripps Institution of Oceanography. According to a statement from the American Geophysical Union, which has accepted the paper for publication, the Scripps researchers have put 50-50 odds on Lake Mead, which lies behind the dam, running completely dry by 2021, given expected climate change scenarios and if future water demands are not reduced. That’s, of course, bad news for hydropower, since water from the lake pouring through turbines generates enough electricity for an estimated 1.3 million people in the West.

Meaning there might be even more riding on the development of the renewable industry.  

(Photo of Hoover Dam: U.S. Bureau of Reclamation)              

“There’s serious demand, serious money – and it could all happen in the next 18 months,” said another, equally publicity shy booth dweller. That time frame was an allusion to the fact that all three major presidential candidates, Hillary Rodham Clinton, Barack Obama and John McCain have endorsed market-based approaches to addressing emissions reductions. Congress could vote sometime this year on a bill sponsored by Connecticut Sen. Joseph Lieberman, an independent, and Republican Sen. John Warner of Virginia that would establish a national cap and trade program.

The resulting market could be staggering in size. For instance, a Duke University study estimated that by 2050 the Lieberman-Warner program could result in carbon dioxide emissions valued at more than $100 a ton. Although greenhouse gases should fall significantly by that time, that would produce a market worth trillions of dollars.

Even without a mandatory program in place in the United States, global transactions could be worth $92 billion this year, a substantial jump from last year, according to Point Carbon, which analyzes the market. At the same time, moves are going on around the United States, including California, to get some kind of market system in place, although much uncertainty still surrounds the efforts. 

The big players are awaiting a federal trading scheme to be established, said Milo Sjardin, North American head of New Carbon Finance, based in the United Kingdom, which analyzes the carbon market. “There needs to be actual business,” said Sjardin, manning the company’s booth at the San Francisco trade fair. Right now, he said, there are too many uncertainties for investors.

But it was clear just from the turnout that lots of folks are betting a market emerges soon.

“The money you see in this room is here because it sees an opportunity to participate,” said Josh Margolis, co-Chief Executive Officer of Cantor CO2e, which provides financial services to the energy and emissions trading industries. Nothing less than a “wholesale evaluation of everything we do” is in the works, he said.

He said the financiers understand what the scientists and the policymakers are saying, even if the message can seem a little garbled at times.

“The politicians who are wringing their hands are sending signals to the market,” Margolis said. That message: “Buy, buy, buy.”

Yergin cited the results of a new study by CERA, Crossing the Divide: the Future of Clean Energy, in predicting that renewable power and biofuels could be supplying up to 16 percent of the world's electric and transportation demands by 2030. He said that renewable power technologies, led by wind, followed by solar and biomass, would experience substantial growth. That's despite what he described as short-term bottlenecks in wind turbine manufacturing and other potential problems.

Yergin, according to a written statement released at the time of his speech, maintained that government policy constitutes a "key driver" for advancing "clean energy" (which the report defines as biofuels, renewables, carbon capture and storage and nuclear and hydropower):

"Putting a price on [carbon dioxide] emissions, setting mandates and providing subsidies all work to kick-start clean energy technologies by meeting the economic competitiveness and cost advantages of conventional technologies. The challenge in the years ahead is to provide subsidies in a way that ensures that these technologies get off the drawing board and are able to wean themselves from support – allowing for a phase-out rather than an increase in subsidies – as they become commercially viable on their own. It is also important that mandates be set at achievable levels and with care so as not to create unexpected pressures from higher prices."

Among other points, Yergin asserted that nuclear and hydroelectric generation would account for almost half of the clean power additions by 2030.

The position outlined by CERA and Yergin has gotten some attention partly because of the consulting firm's close linkage with the petroleum industry. The report "reflects a view that has been developing within mainstream industry for more than a year," commented The Wall Street Journal online site Environmental Capital. It called CERA "as close as it gets to a proxy for conventional wisdom within Big Oil."

Yergin is the author of the Pulitzer Prize-winning history of the petroleum industry, The Prize: The Epic Quest for Oil, Money and Power. The book was made into a public television documentary series.

The panel, which adopted its final report February 11, clearly foresees that virtually no individual nor business will avoid the impact of meeting the anticipated reductions:

   Policies implemented under AB 32 and the Governor’s Executive Order for 2050 must address all sectors of California’s economy so that all significant sources of GHG emissions participate in both the challenges and opportunities afforded by this critical piece of state legislation. This broad-scaled approach is the most likely to create a level playing field, and address new alternative energy sources and fuels that could be used in multiple sectors. For example, policies need to recognize that electricity and biofuels will likely compete with more traditional transportation fuels in the future; therefore, policies that address only the electric sector or only the petroleum refining sector are unlikely to achieve the goals of AB 32.

The report outlines 55 recommendations for meeting the challenges posed by the state's political leaders covering virtually all sectors of the economy, including financial institutions; transportation; energy use by industry, commerce and residents; electricity and natural gas; agriculture; forestry and water. Among the eye-catching projections in the report: California's future sources of electricity and transportation and heating fuels will have to be virtually carbon-free by 2050. Renewable energy technologies, including wind and solar, the report said, offer the "technical potential" to generate all of the state's electricity, despite a number of technical and implementation obstacles that will need to be overcome.

Among the report's recommendations is the establishment of a "California Carbon Trust" that could use money, likely coming from an auction of emission allowances, to encourage reductions in carbon beyond whatever cap is established and to further other goals, such as funding research and development projects. It also includes recommendations for residential planning efforts to encourage "transit villages," new forms of automobile insurance designed to give drivers financial incentives to spend less time behind the wheel, and taking steps to encourage the development of renewable energy so that one-third of the state's power can be generated by such means.

The full air board, which is the lead agency implementing California's greenhouse gas-fighting efforts, was scheduled to get its first formal look at the report on February 28. The board is chaired by Mary Nichols, a Schwarzenegger appointee.