Yet again, climate law watchers – those who want
greenhouse gas ("GHG") emissions further reduced, as well
as those who would be most affected by additional air regulations
– are holding their breath, waiting for the Supreme Court
to issue its decree. Four years ago, such watchers waited with
bated breath as the high court considered the issue of whether GHG
emissions from vehicles could be regulated under the Clean Air Act.
The result? The seminal April 2, 2007 Massachusetts v. EPA
decision, which shifted the regulatory landscape in the U.S. by
paving the way for greenhouse gas emissions to be regulated for the
first time. Because of the Massachusetts decision, vehicle
manufacturers and large utilities and manufacturers –
including entities who never have been subjected to air
restrictions before – now face regulation of their GHG
emissions. The regulatory landscape has vastly changed.
Now pending before the Court, in a case styled American
Electric Power Company v. Connecticut that originated with
eight states, one city and three private trusts suing several power
companies, is another question that can significantly change the
way entities that have any sort of combustion process –
and thus produce GHGs – do business and manage their
liability risks. The precise question before the Court is whether
those who emit GHGs can be sued by states, municipalities and
private entities under the federal common law of nuisance. The
Second Circuit – the federal appellate court overseeing
federal district courts in New York, Connecticut and Vermont
– found that, yes, such lawsuits are allowed. If the
Supreme Court agrees, the consequences would be far-reaching and
complex.
The Supreme Court heard oral argument in this case on April 19th
but has not yet issued its decision; that decision is expected by
the end of June. As we await the Court outcome, this article offers
some food for thought: Just what did the Second Circuit panel
decide, and has anything changed since that decision? What
predictions can be made about how the Court might rule –
will it be up to Justice Kennedy, who frequently casts the swing
vote? And if the Second Circuit decision is allowed to stand, what
might the real-world consequences be, especially considering some
of the unique and particularly-complicating aspects of climate
change? But first, for anyone not well-steeped in environmental law
or well-versed in the complications of the climate change
phenomenon, this article offers a primer on climate change
regulation to date.
Primer on Climate Change Regulation to Date
The primary federal law directed at air emissions is the Clean
Air Act ("CAA"), initially passed in 1970 though since
amended several times. For an emission to be regulated under that
Act, it must meet the Act's definition of "air
pollutant" and, generally, the emission must cause or
contribute to air pollution that is reasonably anticipated to
endanger public health or welfare.
In 1999, a group of 19 private organizations petitioned EPA to
regulate GHG emissions from new motor vehicles under the Clean Air
Act. Among other things, they argued that 1998 was the warmest year
on record; that climate change would result in serious effects on
human health and the environment; and that GHG emissions were
accelerating this climate change. EPA sought public comments on all
the issues implicated by the petition, and in 2003, denied the
petition for two reasons. First, EPA stated that GHGs were
not "air pollutants" under the Clean Air Act
– they were not local like the other emissions regulated
under the Act, and had Congress wanted to include GHGs, they would
have amended the Act to do so. Thus EPA had no authority to
regulate GHGs under the Act. And second, even if EPA did
have authority to regulate GHGs, the EPA Administrator had the
discretion not to do so. This decision was appealed to the federal
appellate court – in this case, the D.C. Circuit
– and that court found in favor of EPA, specifically
finding that the EPA Administrator had the policy discretion to
decide whether or not to regulate GHGs; that is, he was not
compelled to regulate them under the Act.
The decision was appealed to the Supreme Court, as
Massachusetts v. EPA (Massachusetts had been a state to
step in and argue its coastlines had suffered irreparable harm due
to climate change). And then, in April 2007, the landscape
radically changed – the United States Supreme Court,
based on what it found to be indisputable science supporting the
theory of climate change and real harm, held that "greenhouse
gases fit well within the Clean Air Act's capacious definition
of 'air pollutant', [such] that EPA has the statutory
authority to regulate the emission of such gases from new motor
vehicles." Accordingly, the EPA had to answer the
"endangerment question" – the question of
whether GHGs cause or contribute to air pollution reasonably
anticipated to endanger public health or welfare.
The question is more complicated than face value might suggest.
The Massachusetts lawsuit was solely about GHGs from
automobiles. However, the way the Clean Air Act is structured and
the way the "endangerment question" is worded throughout
the Act, if GHGs from cars were found to "endanger" and
therefore had to be regulated, once that moment of regulation
occurred, other types of sources – such as industrial
facilities – would instantly be subject to emissions
restrictions as well. The Act had been structured such that only
larger sources of air pollutants would be required to obtain air
permits; typically, those emitting 100 tons per year (or in some
cases, 250 tons per year). But just about any source that has a
combustion process could easily meet that 100 tons-per-year limit;
if read literally, once cars were regulated for GHGs, then
manufacturing facilities would be regulated as well – but
it would not stop there. Grocery stores, apartment buildings,
shopping malls – anything with a sizable HVAC system
– would suddenly be required to obtain air permits
(technically called Prevention of Significant Deterioration, or
"PSD", permits), making them subject to "best
available control technology" requirements.
In response to the Supreme Court's Massachusetts
decision, EPA issued an "Advance Notice of Proposed
Rulemaking" ("ANPR") in July 2008 – a type
of document that tends to be issued by an agency when it is still
gathering information and determining the best pathway to pursue.
In that document, EPA questioned whether the endangerment question
was met and, if so, how the complexities of the Clean Air Act
should be addressed and handled. After analyzing the hundreds of
thousands of comments received on the ANPR, in April 2009, EPA
issued a proposed positive endangerment finding. (Note that a
significant federal rule is usually issued in two steps –
first a proposal on which the public is invited to comment, and
then, ultimately, a final rule.) The EPA's final rule
determining that, yes, GHG emissions – the "air
pollution" at issue – endanger the public health and
welfare, and that GHG emissions from new motor vehicles contribute
to that pollution, was issued in December 2009.
In May 2010, EPA, along with the National Highway Traffic Safety
Administration, jointly issued GHG emission standards for
light-duty vehicles (cars and light trucks). NHTSA comes into play
because its Corporate Average Fuel Economy Standards are directly
connected to reducing GHG emissions; if you make a car more fuel
efficient, you automatically reduce its CO2 emissions. In order
words, as stated by car manufacturer executive Dave McCurdy (in a
March 2010 letter sent on behalf of the Alliance of Automobile
Manufactures to Capitol Hill), "greenhouse gas standards are
the functional equivalent of fuel economy standards." The new
light-duty vehicle standards went into effect January 2, 2011,
starting with Model Year 2012 vehicles.
This means that beginning January 2nd of this year, GHGs became
"regulated pollutants" under the Clean Air Act
– and that has implications beyond cars and light trucks.
As noted above, because of the structure of the CAA, once a
pollutant is regulated from one source, it automatically must be
regulated from other sources. And because the low 100 tons-per-year
threshold could have catapulted small "sources"
– such as apartment buildings and the like –
into the world of air permits, in anticipation of the impending
arrival of the regulated world, in June 2010 EPA issued a
"Tailoring Rule". In that rule, EPA established that
instead of the 100 ton-per-year threshold, for greenhouse gases,
the threshold for obtaining an air permit should be 75,000
tons-per-year (at least initially); otherwise, according to EPA,
the results would be "absurd" and regulators would be too
burdened.
And EPA has opted to phase in the new requirements. For the period
January 2 through June 30, 2011, only a facility that undertakes a
project that both increases net GHG emissions by at least 75,000
tons per year of "carbon-dioxide equivalents"
and increases non-GHG pollutants significantly will face
GHG limitations when they seek a new air permit or renew an
existing permit. (The "carbon dioxide equivalent" unit of
measurement takes into account the fact that the heat-trapping
potential of the six GHGs targeted by the new regulations varies;
for example, by weight, methane is approximately 21 times more
powerful than carbon dioxide at warming the atmosphere. Based on
this, 1 ton of methane would equal 21 tons of CO2e.) This means
that essentially only large facilities that emit large amounts of
other air pollutants will face GHG consequences, at least for the
initial six-month period. However, beginning July 1, 2011, GHG
limitations will apply to new and existing sources with 100,000 tpy
of CO2e regardless of the quantity of any other air
pollutant emissions. Thus July 1st marks the date when sources that
previously have not required air permits could, for the first time,
require such permits solely because of their GHG emissions.
Once the federal EPA has acted by issuing regulations, generally
it is up to the state environmental agencies to implement the
federal requirement through their own EPA-approved "state
implementation plans" (or else a one-size-fits-all federal
implementation plan applies). This means that, as of January 2nd,
state agencies had to have in place state rules enabling them to
regulate GHGs in the fashion prescribed by U.S. EPA. And it will be
up to the states to determine, in issuing air permits, what the
"best available control technology" should look like
(although the U.S. EPA has issued guidance documents emphasizing
that ways to increase overall energy efficiency should factor
heavily into any analysis of what control technology to
apply).
It's worth noting that the Clean Air Act is not the only
statute bearing on regulation of climate change effects. For
example, EPA has received petitions under the Clean Water Act
requesting that water quality standards be established to address
"ocean acidification" (from CO2 deposition); EPA has
developed, under the Safe Drinking Water Act, its "Underground
Injection Control" program to regulate the underground
injection of CO2, to ensure such injections do not harm underground
sources of water; federal agencies' review of large projects
under the National Environmental Policy Act requires them to
consider a project's environmental impacts, which necessarily
now includes climate-related impacts; the Endangered Species Act
(and the relatively recent listing of the polar bear as a
"threatened" species) has been used to consider GHG
effects on certain species; and even an appropriations bill for
2008 required the establishment of a mandatory reporting program of
GHG emissions. But this by no means is an exhaustive list. The
Clean Air Act is the statute most relevant to the issues presented
by the AEP case, and, accordingly, this article is limited
to discussing the reach of the CAA as relevant to a claim of
nuisance.
The Second Circuit's AEP Decision (Including Errors in the Decision and Changed Circumstances Since)
The Connecticut v. AEP case has been percolating for a
while. It began in July 2004 when eight states, New York City and
three land trusts – claiming to represent the interests
of more than 77 million people and their related environments and
economies – sued six electric power corporations, seeking
abatement of the corporations' contributions to the public
nuisance of global warming. Among other things, plaintiffs alleged
that defendants' emissions accounted for approximately ten
percent of all carbon dioxide emissions in the U.S., that
temperatures have risen and snowfall decreased since 1900 because
of global warming, and if the defendants' CO2 emissions were
left unchecked, the consequences of global warming would continue
to accrue and intensify.
In September 2005, a federal district judge sitting in the Southern
District of New York dismissed the complaints, finding that the
court lacked jurisdiction because the question presented was a
"non-justiciable political question". In other words, the
district court did not have the authority to address the question
because it was essentially reserved for the other branches of
government; that is, the court could not entertain the
plaintiffs' suit without deciding complex policy questions
reserved by the U.S. Constitution for the legislative and executive
branches. Specifically, the issue of global climate change and any
unilateral regulation of CO2 emissions would require the
"identification and balancing of economic, environmental,
foreign policy, and national security interests" that
"are consigned to the political branches, not the
Judiciary."
Not surprisingly, that decision was appealed to the Second Circuit.
And in September 2009, a two-judge panel (which originally has been
a three-judge panel at the time of oral argument that included
then-Judge Sotomayor, but she subsequently was nominated to the
Supreme Court) issued its decision reversing the district court
finding that, at heart, the case was an "ordinary tort
action", and although the case had political overtones, it did
not arise to the level of presenting a non-justiciable political
question. But because the issue was not limited to individual
states, federal common law should apply and indeed could be
applied. The Second Circuit panel then went on to address standing;
in other words, whether the plaintiffs could demonstrate sufficient
injuries from and connections to the alleged activities, to justify
their participation in the case. The panel easily found that the
states, New York City and private trusts all had standing based on
the allegations of the defendants' contributions to climate
change. Defendants' requests for rehearing and rehearing en
banc (essentially, requests that the court rehear the case, with
all Second Circuit judges present) were denied.
One troubling aspect of the Second Circuit panel's decision is
that it suggests a misunderstanding of the CAA's structure. The
panel makes much ado about carbon dioxide not being subject to a
national ambient air quality standard (or a "NAAQS",
which is a standard set for each of six of the more ubiquitous air
pollutants). The decision states, "[I]n the stationary source
context, EPA must additionally find that 'the presence of
[greenhouse gases] in the ambient air results from numerous or
diverse mobile or stationary sources.'" Sure, EPA can
choose to do this if it makes the policy decision to establish GHGs
as "criteria pollutants" subject to NAAQS. But the
panel's view suggests that it is only through
establishment of NAAQS that stationary sources become regulated
under the CAA. Such a constrained view ignores the other avenues of
regulation under the CAA; indeed, it ignores the very avenue of
regulation in place now – the regulation of stationary
sources through the PSD program and Title V permits.
Note also that the Second Circuit panel's decision –
issued in September 2009 – predated the EPA's final
endangerment finding (December 2009), and also predated regulation
under the CAA of emissions from cars, light trucks and certain
stationary sources (January 2011). In light of these changed
circumstances, several statements in the Second Circuit's
AEP decision suggest that today – now
that endangerment has been established, and now that GHGs are being
regulated under the CAA – the court would reach a
different decision. For example, at one point the decision reads,
"We express no opinion at this time as to whether the actual
regulation of greenhouse gas emissions under the CAA by EPA, if and
when such regulation should come to pass, would displace
Plaintiffs' cause of action under the federal common law."
Elsewhere the panel observed, "If and when a statute or
administrative regulation 'speaks directly' to the question
of whether stationary sources are required to control greenhouse
gas emissions, then the parties may very well find themselves in
circumstances similar to those of the parties in Milwaukee
II . . . ." (In other words, the parties could find
themselves in the situation akin to Milwaukee II, a 1981
Supreme Court case that found that the federal Clean Water Act and
the regulatory regime it established were so comprehensive that a
claim based on the federal common law of nuisance could not be made
regarding certain sewage overflows from treatment plants.) And the
Second Circuit panel noted that any action by EPA to "regulate
emissions, assuming its reasoning is not 'divorced from
statutory text'", "would override any decision made
by the district court under the federal common law." Hence the
Second Circuit itself has admitted its conclusion could be starkly
different today (although it is unclear since the panel did not
seem to understand that stationary sources can be regulated by
means other than through NAAQS).
Finally, the Fourth Circuit cites to the federal district court
decision in North Carolina v. Tennessee Valley Authority,
593 F. Supp. 2d 812, 829-34 (W.D. N.C. 2009), as making the
Restatement of Torts' definition of nuisance workable in the
context of air emissions, yet that decision was reversed by the
Fourth Circuit in July 2010. Thus yet another change in
circumstances undermines the reasoning in the Second Circuit's
AEP decision.
Predicting the Supreme Court Outcome
The fate of the AEP case now rests in the hands of
eight Supreme Court justices; Justice Sotomayor has recused
herself, as she was part of the original panel that heard the case
at the Second Circuit. What this leaves is the set of four
typically conservative justices (Chief Justice Roberts and Justices
Scalia, Thomas and Alito), three typically liberal justices
(Justices Breyer, Ginsburg and Kagan), and one "swing
voter" who dictates the outcome in the more controversial
cases – moderate-conservative Justice Kennedy.
The Massachusetts decision is case in point: It is Justice
Kennedy's vote that resulted in a more liberal majority having
the five votes necessary to find that GHGs are indeed "air
pollutants" under the CAA. But in National Association of
Home Builders v. Defenders of Wildlife, a 5-4 decision issued
in June 2007 addressing the factors EPA should consider in
transferring certain permitting authority to a state, Justice
Kennedy sided with the conservatives, giving them the narrow
majority. Essentially the same breakdown of votes occurred in
Riverkeeper, an April 2009 Supreme Court decision with a
5-vote majority finding that EPA may undertake a cost-benefit
analysis in determining the standards to apply to cooling water
intake structures, structures that are typically part of power
plant complexes (although that was not a clean 5-4 decision, as
Justice Breyer added his own partially concurring and partially
dissenting opinion).
And don't forget Rapanos. In 2006's
Rapanos v. U.S., Justice Kennedy did not "swing"
one way or the other – he marched to his own tune,
issuing a concurring opinion that established a separate standard
for determining jurisdictional wetlands, such that to apply the
fracture Rapanos decision, EPA now considers whether the
standard set forth in the four-Justice plurality is met or whether
Kennedy's standard is met. The real-world consequence is that
permit-writers and those planning projects have been a bit puzzled
by Rapanos, attempting to analyze whether a surface
connection or "significant nexus" suffices to establish
jurisdiction over a water body (and doing more technical analyses
to determine if Kennedy's standard is satisfied). And guidance
documents jointly issued by the EPA and Army Corps of Engineers
have done little to clear up the confusion, since –
because of Kennedy – multiple tests apply. Thus
Kennedy's vote is powerful – swaying a decision one
way or another, or even adding layers of complication to the
real-world application of a decision.
In short, in AEP, Justice Kennedy's vote very well may
carry the day. And what will his vote be? We can surmise all we
want, and a logical starting point would be his past statements.
But it's not as though Supreme Court jurisprudence is replete
with his statements regarding the law of nuisance or the
comprehensiveness of environmental regulatory schemes. However, one
clue might be found in 2010's Stop the Beach Renourishment
v. Florida Department of Environmental Protection. In that
case, Justice Kennedy authored a concurring opinion where he
expressed reluctance for the judiciary to decide property interests
in the context of takings, urging that was a power reserved for the
political branches. And the plurality of justices in that decision
labels Kennedy's musings and examples to be about
"nuisance". So does this mean that Kennedy, when
confronted with such a choice -- between having the judiciary
decide the confines of a nuisance versus having the political
branches determine the competing interests -- is inclined to choose
the political branches?
But arguably it might not be that close of a decision resting on
Kennedy's vote. The Supreme Court has not previously addressed
the intersection of the federal common law of nuisance and the
regulation promulgated under the Clean Air Act. Yet the Court has
addressed a similar question with respect to the Clean Water Act.
In April 1981, in City of Milwaukee v. Illinois (also
known as "Milwaukee II"), by a 6-3 decision the
Supreme Court found that Illinois could not seek abatement of a
nuisance caused by interstate water pollution under federal common
law, because Congress had occupied the field by establishing a
complex regulatory program through the Clean Water Act, a program
that was supervised by an expert administrative agency, the EPA.
The Supreme Court affirmed this principle, by a 7-2 decision, just
two months later in Middlesex County Sewerage Authority v.
National Sea Clammers Association. And in 1992, in the
unanimous Arkansas v. Oklahoma, the Supreme Court found
that both the federal common law of nuisance and an affected
state's common law were pre-empted by the Clean Water
Act.
None of these cases was a "close" one; that is, not one
was a 5-4 decision or plurality opinion. Does this mean that, to
the extent the current Court views the Clean Air Act as
establishing a comprehensive regulatory regime analogous to the
Clean Water Act's occupation of the field (albeit directed at a
different environmental resource), the case is an easy case boding
in favor of reversing the Second Circuit decision?
And of course Court followers look for clues from the oral argument
itself. The caveat, of course, is that a justice's mode of
questioning might say very little about how he or she may
ultimately decide. Indeed, some just play devil's advocate;
some may just be attempting to flesh out the scope of a line of
argument (perhaps attempting to find out if counsel can
convincingly address pitfalls); and some justices are known for
being silent during oral argument (at least one justice in
particular has such a reputation!). All that said, of the more
liberal justices – and thus those considered more likely
to affirm the Second Circuit – Justice Ginsburg asked at
oral argument about the propriety of a court setting emissions
limits when the EPA is regulating in that area, and Justice Kagan
too voiced skepticism, noting that the factual determination the
states were requesting courts to make was the very type of
determination for an expert agency such as EPA. Do these voiced
doubts from even the liberal justices point to an outcome
equivalent to what the Court decided years ago with respect to the
Clean Water Act – that a nuisance claim under federal
common law has no business being brought when EPA is leading the
way under a comprehensive statutory scheme?
Complexities If the Second Circuit Decision Stands
Nuisance – the core issue of the AEP case
– typically involves the proverbial complaining neighbor,
unhappy about someone else nearby whose activities are so
unreasonable or unlawful that they injure the complaining neighbor.
A small-scale example of a nuisance case directed at air emissions
might involve local citizens complaining about the sulfur smell
emitted by a nearby paper mill.
But because of the nature of climate change, the issue is not
limited to one of troubled neighbors. If a molecule of CO2 is
emitted in, say, Illinois, the impact of that emission is
global. The molecule goes up into the atmosphere and,
together with the other GHG molecules in the atmosphere, creates
the heat-trapping effect felt globally. Consequently, what the
United States emits affects climate impacts felt by China, and vice
versa. (It is this issue that led President George W. Bush not to
sign the Kyoto Protocol, because only industrialized nations were
bound to reduce their GHG emissions. This meant that China and
India – signatories to the treaty but categorized as
developing nations – had no obligation under
that treaty to reduce their emissions. And as of 2009, the largest
emitter of GHGs – at 19% – was China.) Thus
it's not as though greenhouse gas molecules obey country
boundaries, let alone state lines. Their disrespect of country
boundaries explains why the issue is such a priority topic of
international discussions, as countries attempt to fashion
international agreements to control the impacts.
Another unique aspect of greenhouse gas emissions – or
at least the six GHGs under the most consistent focus, which are
carbon dioxide, methane, nitrous oxide, hydrofluorocarbons,
perfluorocarbons, and sulfur hexafluoride – is that they
are long-lived. (Although six GHGs face the most scrutiny, this
article refers most often to CO2, as it is the most ubiquitous, and
it is the pollutant of focus in the AEP case.) Their
"lifetimes" – or the time it takes for an
initial amount in the atmosphere to be reduced by two-thirds
– are relatively lengthy compared to other air emissions.
For example, carbon dioxide in the atmosphere generally has a
lifetime of 100 years (though some fraction of any atmospheric
increase in CO2 is absorbed by oceans and terrestrial vegetation).
Methane's atmospheric lifetime is approximately a decade, and
sulfur hexafluoride lasts over 3,000 years in the atmosphere.
Contrast that to black carbon (technically considered an aerosol
rather than a greenhouse gas), which stays in the atmosphere for
about a week. (Black carbon does also impact climate, but many
uncertainties exist about the exact magnitude and nature of its
impact; the same uncertainties apply to aerosols in general, as
they have some cooling influences along with warming potential.)
Accordingly, the climate change phenomenon has intensified since
the advent of the industrial revolution, as long-lived greenhouse
gases have accumulated in the atmosphere over time.
And all GHGs are not created equal in terms of their intensity. As
noted above in discussing EPA's current approach, methane is
approximately 21 times more powerful than carbon dioxide at warming
the atmosphere, and because of this, EPA has developed a
"CO2-equivalent" unit of measure.
Even for non-climate cases, nuisance is not necessarily a
clear-cut area of law; as the Supreme Court observed in
Milwaukee II, for a court to decide a question of nuisance
often requires applying "often vague and indeterminate . . .
concepts." But because of the unique aspects of climate
change, more complexities than the vagueness of ordinary nuisance
law would come into play. For example, if the Supreme Court permits
the AEP-variety of nuisance suits to go forward, the very real
consequence is that a manufacturing facility in Illinois could be
sued by a private citizens group in Alaska for climate change
effects – such as changes in coastlines, sea ice,
climate-sensitive species – on the environment that the
citizens group uniquely enjoys. And if an Illinois manufacturing
facility could be sued by an Alaska group, would each potential
defendant – in order to rein in liability –
seek to force all potential plaintiffs across the country into one
giant class-action suit, so that the defendant only faces
litigation one time for its purported nuisance? In turn, how would
this affect the plaintiffs' bar; would they be shopping around,
hoarding defendants for giant class actions?
And would the small emitters – say, apartment buildings
– who have, to date, remained lawsuit-free and
(relatively) unregulated, suddenly find themselves mired in
litigation they never expected, simply because they have an HVAC
system that contributes some amount of GHGs to the global climate
change phenomenon? And based on the Second Circuit's reasoning
in AEP, if a large emitter's status as
"regulated" by EPA somehow shields it from nuisance suits
(a logical conclusion suggested by the Second Circuit's logic),
does this mean that smaller sources – whose emissions are
too low to trigger CAA regulation – now have a bulls-eye
on them, since a nuisance suit against them would be appropriate
due to their unregulated status?
And how far back do the damages go, if the molecules a facility
has emitted are long-lived? Would emitters of longer-lived GHGs be
more liable than others, since they have been contributing to the
nuisance longer? For example, would large emitters of sulfur
hexafluoride be more liable than those emitting mostly methane? Or
would the heat-trapping effect – the fact that some GHGs
have more heat-trapping potential than others (for example, by
weight, methane is approximately 21 times more powerful than carbon
dioxide at warming the atmosphere) – come into play in
determining liability? Will the CO2-equivalent standard of measure
be used, or will all GHG molecules be treated as equal? And just
which source's emissions are responsible for which degree of
elevation in global temperature – the largest emitter,
the earliest emitter? Does it matter? And would a facility's
GHG life-cycle – i.e., its GHG usage throughout
all its processes – factor in as a defense?
And would each of these questions be up to the individual federal
district judge? Would a district judge in the Southern District of
New York be able fashion one set of answers and emissions caps for
a large emitter in New Mexico, while a district judge in Montana
crafts a completely different set of answers for a large emitter
located in southern Florida? As the power corporations stated in
their Supreme Court petition, "A single judge could set
emissions standards for regulated utilities across the country
– or, as here, for just that subset of utilities that the
plaintiffs have arbitrarily chosen to sue. Judges in subsequent
cases could set standards for other utilities or industries, or
conflicting standards for these same utilities." And what
added layer of complexity would this add to sources already
subjected to regulatory emission controls?
Suffice it to say, if the Second Circuit decision stands,
complexities will abound. And potential liability – and
thus the cost of doing business – for any facility with a
combustion process will rise drastically. Years ago, in the midst
of the California electric power crisis, the Wall Street
Journal attributed part of California's power shortage to
what it labeled the "B-A-N-A-N-A" phenomenon: Build
absolutely nothing anywhere near anybody. (In California's
case, no new power generation had been built for several years, and
thus increasing demand could not be met.) If nuisance suits under
federal common law can be brought against facilities for their
contributions to climate change – the result if the
Supreme Court does not reverse the course of the Second Circuit
– then the unfortunate consequence will likely be
something more extreme: B-A-N, or "build absolutely
nothing". That is, because of the global nature of climate
change, it will not matter where and near whom a facility is built;
the risks and uncertainties of potential nuisance liability would
be sure to prevent it from being built at all.
Whether we are headed for a B-A-N reality is anyone's guess,
although those within the hallowed walls of the Supreme Court
– especially Justice Kennedy – likely already
know that fate. Anyone outside the courthouse should know the
outcome by the end of the June. Stay tuned.
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