Global Climate Law Blog : Global Climate Law Blog : Published by Howrey Law Firm : Climate Attorneys and Environmental Lawyers

In reaching their decision, the three-judge panel agreed with Judge Moore on one key claim: that the Administrative Law Judge (ALJ) was not independent in her evaluation of the decision to issue the permit. Therefore, the appeals panel sent the case back to the Superior Court with directions to vacate ALJ Stephanie M. Howells' approval of the coal-fired plant permit saying Howells had employed the wrong standard of review in approving the permit. Howells' 108-page decision, which followed a 21-day hearing, contained language suggesting the EPD director's decision to issue a permit should be given some deference.

LS Power, the plant's developer, said the company looks forward to moving the project forward after years of delays. "We'll take it," said company spokesman Mike Vogt, who said the ruling overturns 95 percent of the trial judge's order. "We feel pretty good about our chances here."

“We are very disappointed that the Court rejected other important claims that are critical to the protection of public health," said Justine Thompson, director of GreenLaw, which challenged the permit. Ms. Thompson asserts that the Court of Appeals confused congressional discussions of comprehensive carbon dioxide controls through a cap-and-trade scheme with the regulatory scheme at issue in the case before the court. She said GreenLaw will appeal to the Georgia Supreme Court.

In the interview, Maples declares the scientific debate about climate change “over” – relying on the Intergovernmental Panel on Climate Change‘s conclusion that the emission of greenhouse gases from human activities has resulted in a measurable increase in temperature, which in turn has significant local, national and global health and environmental effects. He asserts that this scientific certainty has driven a shift in litigation defense strategy away from the science to the standing/political question defense. According to Maples “that’s essentially what the ‘standing’ defense is about. It’s too great of an issue for the courts. It has to be handled by the political leaders.”

But as noted in other posts and articles, the regulatory and quasi-regulatory conclusions that climate change is influenced by human activities do not address the specific causation questions that must be addressed in a tort case like Comer, which seeks to hold corporations responsible for damage caused by climate change. The fact that those battles have not occurred in Comer may not represent a shift in defense strategy – those battles have simply been unnecessary because the complaint was dismissed for lack of standing (“the Court finds that Plaintiffs do not have standing to assert claims against Defendants and that Plaintiffs’ claims are non-justiciable pursuant to the political question doctrine”).

The interview cites Maples’ view on proximate cause as follows: “Proximate cause is not simply cause in fact. We know what the cause in fact is – the science has told us that. But proximate cause has to do more with who could have prevented it.” While this definition doesn’t track Black’s Law Dictionary – which uses phrases like “[t]he last negligent act contributory to an injury, without which such injury would not have resulted,” and “[t]he dominant, moving or producing cause” – it does identify clear causation hurdles that the Comer plaintiffs must overcome if the dismissal of their case is reversed. In establishing cause in fact, plaintiffs would have to establish that Hurricane Katrina would not have occurred without defendant’s emissions. In other words, if Comer is reversed, causation looms large as an obstacle to plaintiffs’ success on the merits.

Causation problems notwithstanding, Maples states that, if Comer is reversed, new work done by Oxford University will help make his case and spur “massive litigation”:

It’s been tracked with great precision, as far as what each corporation’s contribution is, and that can now be extrapolated – especially based on some of the work, the computer modelling that’s coming out of Oxford University – that can now be extrapolated to a percentage of fault. It’s fantastic work that’s been done. Apparently it’s even more sophisticated than the work out of the University of Colorado.

They now can model the effect of man-made carbon contributions to the atmosphere, and the contribution that it has to global weather events. A (newspaper) article was sent to me a few weeks ago - it’s worth a story in and of itself probably - because the comment made was that it was going to lead to massive litigation.

While it is not clear what computer modelling Maples refers to, it may be that he is commenting on a “summary report” stating “preliminary findings” of B. Müller, Ch. Ellermann, M. Friman, N. Höhne, and R. Verheyen, entitled Differentiating (Historic) Responsibilities for Climate Change, available on the website of a company called Oxford Climate Policy. This preliminary report does not appear to be the kind of peer reviewed analysis that might support specific causation claims and is in large part focused on the philosophical questions of how responsibility should be shared for addressing climate change on an ongoing basis (not on the question of apportioning liability, based on cause, for climate change in general or specific weather events). Indeed, the report states as much in its conclusion: “The aim of this Report was to put forward and discuss a methodology for the numerical differentiations of responsibilities for climate change as opposed to calculating causal contributions to climate change.”

Still, Maples predicts “massive litigation” in the future from “big farming interests” who suffer droughts, to “communities ravaged by wildfires,” to “ski resorts that have no snow.” Maples says that the strategic model for the litigation will be based on tobacco litigation: “What’s good about the approach that I’m taking is that the tobacco litigation – and before that the asbestos litigation – demonstrates that one case can cause a gigantic litigation problem for corporations. It’s pretty much accepted history that asbestos and tobacco are the role models for climate change litigation now.”

The Supreme Court opened the door to such regulation with its 2007 ruling in Massachusetts v. EPA. In that decision, the Court held that the Clean Air Act could be used to limit carbon dioxide and other greenhouse gas emissions. The Court noted that any refusal by the EPA to regulate greenhouse gases had to be based on science and a “reasoned justification.”

The Bush administration ignored the opinion, insisting the Clean Air Act was not the proper mechanism for addressing global warming. In announcing the EPA’s intent to make findings on greenhouse gases, Jackson dismissed the stance of the Bush-era EPA as a “deafening silence,” and stated that the American people deserve an opinion on the dangers of greenhouse gases.

In making findings the EPA could improve the United States’ international standing on climate change issues. With negotiations on a global treaty set for December 2009 in Copenhagen, the United States faces increasing pressure to take decisive action on global warming.
 

According to the October 23, 2008 Assurance of Discontinuance Pursuant to Executive Law § 63(15), Dynegy's disclosures will include an analysis of material financial risks to the company from the physical impacts of climate change, "including the impact of an increase in sea level and changes in weather conditions", as well as material financial risks associated with present and probable future greenhouse gas legislation and regulations.  Dynegy has also agreed to a broad climate-change litigation disclosure covering

[a] description of any litigation related to climate change involving the Company the outcome of which will likely have a material financial effect on the Company and any climate change-related decisions issued by the United States Supreme Court, any United States Court of Appeals, or any court in any jurisdiction in which the Company operates that the Company concludes are likely to have a material financial effect on its business.

In addition, to the extent that Dynegy's greenhouse gas ("GHG") emissions materially affect its financial exposure from climate-change risk, Dynegy will disclose

• current and projected increases in GHG emissions,
• corporate strategies to reduce the company's climate-change risk,
• the role of the company's board of directors in Dynegy's corporate governance process as it applies to climate-change issues, and
• the extent (if any) to which "environmental performance factors" are incorporated into officer compensation.

Mr. Cuomo lauded the agreement with Dynegy, noting that it will help “protect investors by ensuring disclosure of potential financial risks that climate change may pose,” and adding:

Today we raise the bar in the industry and ensure transparency and disclosure in the marketplace.  Investors have the right to know all the material financial risks faced by coal-fired power plants associated with global warming and I hope and expect that other companies will follow the lead of Dynegy and Xcel.

Much as former New York Governor Eliot Spitzer used the Martin Act’s broad powers to fight Wall Street fraud when he was New York Attorney General, Mr. Cuomo has used that tool to investigate a range of securities-related issues including subprime mortgages and other financial industry practices.  In addition to drawing public attention to his political accomplishments, Mr. Cuomo’s efforts to obtain climate-change-related disclosures from operators of coal-fired power plants may also spur the Securities and Exchange Commission to act as it considers climate-change disclosure requirements.

The October 23, 2008 Dynegy agreement came one day after a group of institutional investors sent a letter to the SEC asking that it require improved climate-risk disclosure in SEC filings.  In their October 22, 2008 letter, the Ceres-sponsored investor group -- the Investor Network on Climate Risk ("INCR") -- also asked the SEC to consider how material environmental, social and governance (sometimes referred to as "ESG") risks, including "environmental issues such as water-related risks and social issues such as labor and supply chain risks," can be integrated into the SEC's disclosure requirements.  The INCR letter was sent in response to the SEC's request for public comment on its 21st Century Disclosure Initiative, announced by Chairman Christopher Cox in June 2008.  (Public comments on the SEC initiative are available on the SEC's Web site.)

While the final plan includes steps designed to reach these reductions goals – notably including a cap-and-trade program for businesses – the specific implementing regulations have yet to be drafted, leaving significant hurdles to clear in order to achieve AB 32’s GHG emission reduction goals, particularly in a time of such serious economic challenges in the state.

AB 32 set a goal of reducing California GHG emissions to 1990 levels by 2020, and reducing them to 80% below 1990 levels by 2050. The implementation plan seeks to achieve these reductions by, among other things, reducing leakage of harmful air conditioning and refrigeration gases, expanding commercial recycling programs, and establishing greenhouse gas reduction targets for local governments.

One of the key aspects of the plan, however, is a cap-and-trade program, designed to enable companies who need to use greater emissions to operate to purchase emissions credits from companies who are able to reduce emissions. Such a trading program would cover about 85 percent of the state's emissions, from sectors such as electricity production, transportation and industry, according to CARB’s press release announcing the plan.   

Final decisions regarding the regulations needed to put the implementation plan into action are likely several years away. Debate over all aspects of the final implementation plan, and lobbying by all parties concerned, is sure to fill the intervening time.

Workshops are planned throughout the state to present details to the public and for CARB to take public comments. The Board is expected to adopt the plan in November 2008, subject to public comments. Public comment will be critical because the measures and policies outlined in the plan will not only guide the implementing regulations, but will form the basis for significant enforcement action against companies who do not meet these aggressive standards.

Among many others, key elements of the plan are:

• A cap and trade program covering 85 percent of the state's emissions. This program will be developed in conjunction with the Western Climate Initiative, composed of seven states and three Canadian provinces, to create a regional carbon market.

• A proposal that utilities produce a third of their energy from renewable sources such as wind, solar and geothermal.

• Implementation of the California Clean Car law to provide a wide range of lower emitting and more efficient cars and trucks.

• Strong enforcement mechanisms. 

Those seeking additional information and commentary on AB 32 and the draft plan may wish to review ClimateConnect’s “AB 32 101” page.

• A report submitted to the G8 by Tony Blair in advance of last week’s G8 summit (“Breaking the Deadlock: A Global Deal for our Low Carbon Future”) identified the significant hurdles in crafting national and international approaches to greenhouse gas emissions: “Given the complexity of the issues involved, the imprecision of much of the data, and the extraordinarily tricky interplay between the political, the technical and the organisational, answering the question of ‘how?’ is as difficult as any the international community has grappled with since the design of the post-war Bretton Woods economic institutions.”
  
   
• The same report later states: “When negotiators sit down in Copenhagen in December 2009, they will face one of the most formidable political challenges in recent history. They must build on the strengths, as well as address the weaknesses of the Kyoto Protocol, to create a successor treaty that will be agreed to, ratified, and enacted by 191 countries to take firm and decisive joint action on climate change. That is why this year’s G8, under the leadership of Japan, is so important.”
  
   
• Commentators noted that the G8’s announcement of a goal of a 50% reduction in Greenhouse Gases by 2050 leaves most of the tough questions unanswered, while developing countries rejected the G8 goal. In DOT EARTH, Andy Revkin posted an annotated analysis of the political machinations involved in the G8 climate declaration and the joint statement from established and emerging economies a day later.
  
   
• EPA’s Advanced Notice of Proposed Rulemaking, “Regulating Greenhouse Gas Emissions Under the Clean Air Act” (July 11, 2008), notes an active debate within the Executive and Legislative branches about how to regulate greenhouse gas emissions: “The implications of a decision to regulate GHGs under the Act are so far-reaching that a number of other federal agencies have offered critical comments and raised serious questions during interagency review of EPA’s ANPR. Rather than attempt to forge a consensus on matters of great complexity, controversy, and active legislative debate, the Administrator has decided to publish the views of other agencies and to seek comment on the full range of issues that they raise.”