Article by Kyle Danish, Shelley Fidler, Kevin Gallagher, Megan Ceronsky and Tomás Carbonell

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Commentary

As Republicans expand their power in the Congress, look for a reshaped climate change and air quality policy agenda. Republican leaders have committed to defunding or delaying EPA authority to regulate greenhouse gas emissions. They might also seek to modify EPA's suite of conventional pollutant rulemakings focused on the electric power sector . . . President Obama said that cap-and-trade is not the only way to "skin the cat," and expressed interest in working with Republican legislators on energy efficiency, nuclear power, natural gas, and electric vehicles; Senate Republican leader Mitch McConnell responded with tentative interest . . . With the election over, when will the White House release EPA's BACT guidance? . . . California voters rejected Proposition 23, allowing the A.B. 32 program to go forward, but muddied the waters by supporting Proposition 26, which raises hurdles to adoption of regulatory fees. California Air Resources Board Chairman Mary Nichols said that Proposition 26 does not affect rules implementing AB 32 . . . The New Mexico Environmental Improvement Board voted 4-3 to approve a cap-and-trade program for the state and join the Western Climate Initiative, but the incoming Republican governor has expressed her opposition. In other WCI news, British Columbia enacted WCI-implementing regulations.

Executive Branch

  • Obama Expresses Willingness to Work With Republicans on Energy Issues. In a post-election news conference, President Barack Obama acknowledged that cap-and-trade legislation to address greenhouse gas (GHG) emissions was not likely to be enacted in the next Congress, but said that "[c]ap-and-trade was just one way of skinning the cat . . . it was a means, not an end. And I'm going to be looking for other means to address this problem [of climate change]." The President said he was open to seeking compromise with Republicans on targeted policies to advance energy efficiency, promote development of natural gas resources, "restart our nuclear industry" and expand domestic manufacturing of electric vehicles. Obama also said that the Environmental Protection Agency (EPA) "wants help from the legislature" on climate change but also wants to "make sure that the issue is being dealt with." In an interview with the Wall Street Journal, Senate Republican leader Mitch McConnell (R-KY) said he is interested in working with the President on nuclear power, clean coal technology, and electric vehicles.
  • EPA Proposes to Approve Implementation Plans for GHG Permitting in Five States. EPA proposed to approve Clean Air Act State Implementation Plans (SIPs) that ensure Prevention of Significant Deterioration (PSD) permitting of stationary sources of GHGs will proceed beginning January 2, 2011 in five southeastern states: Alabama, Kentucky, Mississippi, North Carolina, and Tennessee. Consistent with EPA's "Tailoring Rule," the revised SIPs provide for a "phased-in" approach to PSD permitting of stationary sources, but do not address the administration of Title V operating permits. The proposed approvals are available at http://www.access.gpo.gov/su_docs/aces/fr-cont.html.
  • OMB Completes Review of GHG Reporting Rules for Oil and Natural Gas Sector and Fluorinated Gases. The White House Office of Management and Budget (OMB) has completed its review of two rules that would require annual reporting of emissions of fluorinated gases as well as fugitive methane emissions from the oil and natural gas sector, indicating that the promulgation of the new rules is imminent. The rules would supplement EPA's existing program for mandatory reporting of GHG emissions, which went into effect on January 1 of this year and requires annual reporting of GHG emissions from approximately 13,000 stationary sources and fossil fuel suppliers nationwide. The proposed versions of the new rules reviewed by OMB would require emissions to be monitored in the covered sectors beginning January 1, 2011.
  • Heinzerling to Depart EPA. EPA announced that Lisa Heinzerling, Assistant Administrator for Policy, Economics, and Innovation and a key adviser to Administrator Lisa Jackson on climate change issues, will depart the agency at the end of this year to resume her professorial position at the Georgetown University Law Center.

Congress

  • Midterm Elections Reshape Climate Debate. The mid-term elections resulted in significant gains for Republicans in both houses of the Congress with the GOP winning a significant majority in the House and shrinking the Democratic hold on the Senate.
    • In the House, Republicans picked up at least 60 seats (with several races still undecided), a total that well exceeded the 39 needed for the GOP to take control of the chamber. Many of the losing Democrats were those who had previously supported cap-and-trade efforts, including most notably Rep. Rich Boucher (VA), a 14-term member who had drafted key coal-related provisions of the Waxman-Markey cap-and-trade bill. With her time as Speaker of the House limited to the remainder of the 111th Congress, Nancy Pelosi (D-CA) has indicated that she intends to seek the post of Minority Leader in the 112th Congress, the highest minority leadership position in the House. Republican John Boehner (OH) is expected to assume her position as Speaker. Expectations are for little action during the lame-duck session other than the passage of a Continuing Resolution to fund the Federal Government expected, so eyes now turn to prospects for the 112th Congress. Given that the Republican and Tea Party campaign platforms during the midterms included strong opposition to any carbon control efforts, the new Republican majority nearly forecloses the possibility of any comprehensive climate change legislation during the 112th Congress. Energy legislation – with a focus on nuclear energy and offshore drilling – is expected to be on the agenda, but any climate change-related legislation will likely take the form of narrowly focused bills that avoid placing a price on carbon, focusing instead on such issues as energy efficiency, renewable energy, nuclear power, clean coal technology, and electric vehicles. The Republican leadership has also said that it will seek to stymie the EPA's authority to regulate greenhouse gases under the Clean Air Act, and will hold investigatory hearings into EPA's actions to date on that subject.
    • While Republicans also made substantial gains in the Senate, the Democrats managed to retain their slight majority and will hold at least 51 of the chamber's 100 seats. Prominent Senators in the climate debate who retained their seats include Harry Reid (D-NV), and Barbara Boxer (D-CA). Senator Lisa Murkowski (R-AK) — who ran as write-in candidate following her defeat in the Alaska Republican primary may have been successful in her unusual move. However, vote counting and legal challenges from the Republican nominee, Joe Miller, may delay an official outcome in that race for some time. For more details on the outcome and impacts of the midterm elections, see the Van Ness Feldman midterm election update available here.

Judicial

  • States and Land Trusts File Brief Opposing Petition for Certiorari in Climate Tort Case. The plaintiffs in Connecticut v. AEP—including eight state governments, the City of New York, and three land trusts—filed a brief opposing Supreme Court review of the Second Circuit's 2009 decision in the case. In the 2009 decision, the Second Circuit reversed a lower court's dismissal of the lawsuit, and ruled that plaintiffs could proceed with their claims that the GHG emissions of the nation's largest coal-burning utilities constitute a public nuisance under federal common law. The new brief argues that Supreme Court review of the matter is premature, because EPA may soon issue regulations that would address GHG emissions from the defendants' facilities and thereby "displace" the plaintiffs' common law claims. In addition, the brief argues that there is no need for Supreme Court review of the case because other federal courts of appeal have not ruled on the same questions presented in Connecticut, and because review at this stage would inevitably involve issues that would benefit from the development of a full evidentiary record before the district court.

States and Cities

  • California Voters Deny Challenge to AB 32 Implementation, But Trouble Lurks With Passage of Proposition 26. Voters rejected Proposition 23, an initiative that would have suspended implementation of California's AB 32 climate change statute until the state's unemployment rate dropped below 5.5 percent for four consecutive quarters. However, passage of a less publicized ballot measure may complicate implementation of the wide-ranging climate change statute. The initiative, Proposition 26, expands the definition of "taxes" under state law to encompass fees and other charges, including many environmental fees and possibly the emissions allowances envisioned under the California Air Resources Board's (CARB) proposed cap-and-trade program. Due to the reclassification, adoption of fees and charges would become subject to a state law that requires any increase in taxes to be approved by a two-thirds supermajority of each house of the state Legislature. Given the state's political environment, the supermajority threshold has often proved to be exceedingly difficult to reach. CARB Chairwoman Mary Nichols said in statements following the vote that CARB does not expect Prop. 26 to affect the implementation of California's existing climate change program because the program is based on AB 32, which was passed in 2006, while the ballot measure applies only to laws passed after January 1, 2010. Other commentators expect that the Prop. 26 will face litigation as a result of what they describe as ambiguous wording. The text of the two California propositions is available at http://cdn.sos.ca.gov/vig2010/general/pdf/english/text-proposed-laws.pdf#prop26.
  • New Mexico Approves WCI Participation. By a vote of 4-3, the New Mexico Environmental Improvement Board approved rules that clear the state to participate in the Western Climate Initiative (WCI), a regional cap-and-trade program comprised of several Western states and Canadian provinces. The rules, drafted by the state Environment Department, mandate that the state reduce its GHG emissions to 15 percent below 2005 levels by 2020. The rules are expected to impact at least 63 large industrial GHG emitters in the state. Incoming Republican Governor Susana Martinez has expressed doubts about the science of climate change and does not support the state's participation in the WCI. It is unclear what impact Governor-elect Martinez's positions will have on implementation of the new rules. For their part, representatives from industrial emitters that would be covered by the rules have stated their intention to appeal the new regulations.
  • British Columbia Moves Forward With WCI Implementing Regulations. The Canadian province of British Columbia has released for public comment a pair of regulations that establish emission trading rules and set standards for GHG emission offsets verification. The emission trading regulation is intended to establish clear rules on how allowances are created, distributed for free or auctioned, traded, tracked and retired for compliance. The offsets regulation mandates that emissions offsets represent real, verifiable and permanent reductions in GHG emissions. The two rules will be available for public comment for 45 days. The proposed emissions offset regulation is available at http://www.env.gov.bc.ca/cas/mitigation/ggrcta/offsets-regulation/index.html. The proposed emissions trading regulation is available at http://www.env.gov.bc.ca/cas/mitigation/ggrcta/emissions-trading-regulation/index.html .

Industry and NGOs

  • Environmental Organizations Argue Election Not a Referendum on Climate and Clean Energy Policies. The Natural Resources Defense Council (NRDC) Action Fund, the Sierra Club, the League of Conservation Voters, Environment America, and the National Wildlife Federation held a press conference after last Tuesday's midterm election to discuss the results. Heather Taylor-Miesle, director of the NRDC Action Fund, warned the new House Republican majority against "overreaching" and argued that "there was no mandate on turning back the clock on environmental protection." Citing the failure of Proposition 23 in California, Gene Karpinski, president of the League of Conservation Voters, said it is "just not true" that the election represents a backlash against action on climate and clean energy. According to Anna Aurilio, director of the Washington, D.C. office of Environment America, policy priorities for environmentalists in the new Congress include passage of a renewable electricity standard and a "Home Star" program to incentivize energy efficiency retrofits in residential buildings. Separately, the NRDC Action Fund released an analysis of exit polls and election results in 83 "battleground" districts, concluding that concerns about the House-passed cap-and-trade legislation were the primary motivation for only a small percentage of Republican voters. Moreover, the analysis found that 55% of voters in these districts support comprehensive energy reform and 58% voiced support when asked whether EPA should regulate "the release of greenhouse gases from sources like power plants, cars and factories in an effort to reduce global warming." The analysis is available at http://www.nrdcactionfund.org/releases/files/BGenvm1_Post-Election_.pdf.

Studies and Reports

  • Pew Center Reports on Federal Adaptation Efforts. A new report by the Pew Center on Global Climate Change surveys efforts by a variety of Federal agencies to promote adaptation to climate change. The report covers a total of twenty-nine Federal agencies or initiatives, including efforts undertaken at the U.S. Forest Service, the Department of Commerce, the Federal Emergency Management Administration, the Department of Defense, and EPA. The report states that Federal agencies have begun to "mainstream" climate change adaptation into their programs and policies, and are increasingly leading or coordinating state, local, tribal, and private sector adaptation initiatives. The report is available at http://www.pewclimate.org/docUploads/Federal-Government-Leadership-Adaptation-Nov-2010.pdf.
  • French Academy of Sciences Says Climate Change "Unequivocally" Due to Human Activity. A report by the French Academy of Sciences summarizing research presented at a recent symposium concludes that climate change is "unequivocally" the result of human activity and that solar activity cannot account for the warming trend observed since 1975. The report acknowledged that key aspects of modeling the Earth's climate present "important uncertainties," but said that uncertainties in modeling slow-moving processes have only a slight effect on modeling forecasts over the next 30 to 50 years. One hundred twenty climate scientists from France and other countries joined in signing the report. An English summary of the report is available at http://www.ambafrance-us.org/climate/report-of-the-french-academy-of-sciences-on-global-warming/.

International

  • Mexico Hosts Final International Climate Summit Before Cancùn Meeting. Mexico hosted environmental ministers from 50 nations to discuss climate change issues in the final international climate change meeting before the Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change begins in Cancùn in late November. During the two-day summit, the ministers will split into four working groups to focus on: monitoring, reporting and verification (MRV); finance, technology and capacity building; the Kyoto Protocol; and adaptation. The purpose of the pre-COP summit is to identify specific issues for resolution with the expectation that agreement on a comprehensive treaty or protocol will not be achieved at the COP, which runs from November 29-December 12.
  • Biodiversity Treaty Incorporates Climate Change-Related Provisions. The 10th Conference of the Parties to the Convention on Biological Diversity (Convention) resulted in an agreement that reflects the expansive reach of climate change issues. In particular, the new agreement includes provisions that call for parties to the convention to abstain from geoengineering activities—defined as those activities "that deliberately reduce solar insolation or increase carbon sequestration from the atmosphere on a large scale that may affect biodiversity"—unless the parties have fully considered the risks and impacts of those activities on biodiversity. The agreement also invites parties to explore ways to conserve, sustainably use and restore biodiversity and ecosystem services while at the same time contributing to climate change mitigation and adaptation.
  • U.N. Report Provides Details for Raising $100B in Climate Funding. The United Nations Secretary-General's High-Level Advisory Group on Climate Change Financing (AFG) released a report that details how developed nations can achieve the goal, first announced in the Copenhagen Accord last year, of mobilizing $100 billion in annual climate change adaptation and mitigation financing for developing nations by 2020. Tasked with studying potential sources of revenue for financing mitigation and adaptation activities in developing countries, the AFG concludes in the report that the goal of $100 billion annually is feasible and that it can be achieved through a combination of developing new sources of financing based on carbon pricing and the scaling up of existing sources. The report stressed that international private investment flows will be especially important in meeting the goal. The report is available online here.

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