Top 6 at 6 – Climate Change Legal Highlights of the First Six Months of 2015
Some might say that the Clean Power Plan is all one needs to talk about in any highlights article on recent climate change legal issues. When final the CPP will expand the scope of the Clean Air Act profoundly, impact the electricity business fundamentally, restrict the coal industry severely and raise electricity rates for consumers by more than just pennies. But suppose it does not get enacted or is substantially altered? The Supreme Court’s end-of-term decision in Michigan v. EPA may result in a very different rule than EPA was contemplating. In a different venue the Mississippi Supreme Court found a utility’s cost recovery for cutting edge clean coal technologies was not to come out of ratepayers’ pockets. And with or without rules relating to carbon emissions, the oceans are still rising. In January the District of New Jersey gave strong guidance to state and federal regulators on how protection of the shore must be accomplished, and in February National Geographic laid out the risks to the world littoral with particular focus on Miami, Florida. Last, as all this is debated, court cases showcased a number of interesting developments regarding discourse over climate change.
1. Clean Power Plan – This rule, restricting the output of carbon dioxide from existing power plants, is in the final stages of promulgation. But the finish line is elusive. EPA predicted it would have a final rule by early summer. Now it is slated for late summer. The Federal Energy Regulatory Commission, while not officially commenting on the Rule, held a number of conferences in the spring. Delay of the regulations was a central theme. So also was the idea of an off ramp or a safety valve so that carbon dioxide emission compliance didn’t end up turning off the lights. As Commissioner Moeller put it plainly: a reliability safety valve needs to be in the final rule. Period.
2. Michigan v. EPA – If this were a coal blog, we would probably have something completely different to say about the Supreme Court’s decision overturning the EPA’s Mercury & Air Toxics Standard. But it is a climate blog and we focus our attention there.
As my colleague, Tricia Caliguire, has written, Michigan addressed Section 112 of the Clean Air Act and the Clean Power Plan derives from Section 111, which expressly requires consideration of costs. Tricia raises the possibility that consideration of costs under 49 (Vermont has no coal) separate state cost benefit analyses may be the undoing of EPA’s rule. She may be right. I offer another. As Justice Scalia bluntly put it, “Chevron [U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984)] directs courts to accept an agency’s reasonable resolution of an ambiguity in a statute that the agency administers. Id., at 842-843. Even under this deferential standard, however, ‘agencies must operate within the bounds of reasonable interpretation.’ Utility Air Regulatory Group v. EPA, 573 U. S. ___, ___ (2014) (slip op., at 16) (internal quotation marks omitted).” The Clean Power Plan rule has already been attacked (unsuccessfully), even before it was final. See In re Murray Energy (D.C. Cir. June 9, 2015). However, the gravamen of that attack, that the authoritative provision was not properly enacted, seems well-placed to trigger another rule set forth in UARG: “We expect Congress to speak clearly if it wishes to assign to an agency decisions of vast ‘economic and political significance.’” The Clean Power Plan fits that requirement and, based on the argument before the D.C. Circuit, the argument that Congress did not speak clearly has merit. Answers, by way of litigation of the rule, are probably at least two years away.
3. Dunes – While the received wisdom is that sand dunes are appropriate protection for the ocean shore, Margate, New Jersey takes a different view. When the Army Corps of Engineers and the New Jersey Department of Environmental Protection concluded dune construction was necessary to save the imperiled community (as they had done for neighboring Ventnor), the citizenry revolted. Margate Citizens Questioning the Beach Project puts it this way: “Bottom Line: The project isn’t “free.” It doesn’t provide substantial protection. And it will greatly diminish the natural aesthetic beauty of Margate’s beaches.”
Margate prefers to rely on its wooden bulkheads, which do not obstruct the view. The rhetoric was convincing; last November Margate held a referendum where the Army Corps of Engineers’ dune construction project was rejected. Then, with a $200,000 war chest, the good citizens brought suit to stop the Corps from building any dunes. On January 15, 2015 the District of New Jersey rebuked the Corps and the NJDEP by holding that the project could move forward up to the point of construction, at which time the State had better have instituted condemnation proceedings, or Margate’s sought injunction could issue.
Victory for Margate? In our view, it is Pyrrhic only. Notwithstanding the substantial sum of money supporting the community’s litigation, the State is now taking all the steps necessary to condemn.
4. Miami-in-the-Sea – Without people South Florida would be something out of a bucket list: miles and miles of long, beautiful, white-sand beaches in a tropical climate. That after all is what started all the people coming. One thing that the bucket list probably would not describe is what underlies the beaches: limestone, and in an era of rising seas that is a major problem. In the February 2015 issue National Geographic laid out the threat from sea level rise to this city with $200 billion in infrastructure: “In its natural state, it’s a porous sponge. Water runs through it. It can’t be plugged. Seawalls can be raised—as the city of Miami Beach has ordered. But seawalls, no matter how high, can’t stop water that bubbles up from beneath.”
Further, Miami is low lying and two feet of sea level rise – an average prediction by 2050 – will put the local nuclear power plant and POTW “sitting out in the ocean.” What does all this mean – particularly for real estate lawyers? The mayor of South Miami, Phil Stoddard, offers a “graph with three lines that show population, property values, and sea level all rising. Then abruptly, population growth and property values plummet. ‘Something is going to upset the applecart,’ he says. ‘A hurricane, a flood, another foot of sea rise, the loss of freshwater. People are going to stop coming here and bail.'”
National Geographic’s national circulation is 3.25 million. We wonder if any of them own any property in South Florida, and if they own a bailer.
5. Coal-Fired Generation – As if the coal industry didn’t have enough problems with MATS and the Clean Power Plan, the Mississippi Supreme Court made it even worse when it denied cost recovery for cost overruns at Southern Company’s Kemper Project in an en banc decision this past June: Mississippi Power Co. v. Mississippi Public Service Commission. The Kemper Project was intended to showcase transport integrated gasification technology (TRIG) and carbon capture and storage through enhanced oil recovery. Those technologies were supposed to make 4 billion tons of local lignite a viable fuel source. The project’s projected costs were $2.2 billion, but those costs escalated to almost $6.2 billion, “a 281% increase from the original net cost.” Mississippi Power (a Southern subsidiary) sought to recover those cost overruns from its rate base; the Mississippi Public Service Commission denied the request. Mississippi Power appealed and ultimately settled with the Commission with an approval for cost recovery. However, an intervenor was able to keep the suit alive and bring it to the Supreme Court. Among other things, the Court held that proper notice of the rate increase had not been given and that Mississippi Power was not entitled to recover the $4 billion in overruns.
Thus, the citizens of Mississippi are not going to bear the costs of Southern Company’s investment in the future. Stated differently, the citizens of Mississippi are not going to bear the costs of the Clean Power Plan. Who, pray tell, is?
6. Truth – In February Dr. Andrew Weaver, a lead author on a number of the UN’s Intergovernmental Panel on Climate Change (IPCC) assessment reports, was awarded $50,000 in his defamation suit against Canada’s National Post and others. Justice Burke of the British Columbia Supreme Court concluded the defendants “have been careless or indifferent to the accuracy of the facts,” adding, “they were more interested in espousing a particular view than assessing the accuracy of the facts.” In March, another climate scientist, Dr. Edward Wegman brought his defamation suit. Dr. Wegman is on the other side of the climate change debate and is one of the authors of a 2006 report championed by Congressman Joe Barton (R-TX), which disputes the research of Dr. Michael Mann (who identified the unprecedented rapid pace of climate change in our era – the “hockey stick” graph). Dr. Wegman’s report (and other articles he had published), however, was not his own work and he was exposed. He brought suit against his exposer. In May he dropped the suit.
We don’t get to bring boxing into climate change discussions very much (or even at all) but were reminded by all this of Carl “the Truth” Williams, a heavyweight boxer who won the crown in 1987. When you fought Mr. Williams, inevitably, the Truth hurt. So too in the climate change debate.