<h4><em>Under review</em></h4>
<p>Legal efforts to address climate change, which is caused by <a href="#greenhouse-gas-emissions">emission of greenhouse gases</a>, started at the <a href="#international-initiatives">international</a> level with the 1992 United Nations Framework Convention on Climate Change, but have struggled to take root in the United States at the <a href="#federal-greenhouse-gas-efforts">federal</a>, <a href="#state-initiatives">regional and state</a> levels.</p>
<blockquote>
<p>Listen to and download materials from the ELI seminar <a href="http://www.eli.org/events/summer-school-climate-change-introduction">Cl… Change: An Introduction</a>. ELI members can listen to ELI’s Monthly <a href="http://www.eli.org/events/monthly-climate-change-briefing-april-2015">C… Change Briefing</a> live or through archived files to follow the latest climate change law, policy, and management developments. For an in-depth discussion of climate change law, see Tom Mounteer, <a href="http://www.eli.org/eli-press-books/climate-change-deskbook">Climate Change Deskbook</a>.</p>
</blockquote>
<h3><a name="greenhouse-gas-emissions"></a>Climate change and greenhouse gas emissions</h3>
<p>Climate change resulting from human activity is one of the most pressing and high-profile environmental issues today. The <a href="http://www.ipcc.ch/&quot; target="_blank">Intergovernmental Panel on Climate Change</a> (IPCC) drew international attention to climate change in its <a href="http://www.ipcc.ch/ipccreports/far/wg_I/ipcc_far_wg_I_spm.pdf&quot; target="_blank">1990 Assessment Report</a>, where it reported that increases in greenhouse gas (GHG) emissions were causing substantial warming of the Earth’s surface beyond what would naturally occur. The IPCC’s “<a href="http://www.ipcc.ch/publications_and_data/ar4/syr/en/contents.html&quot; target="_blank">Fourth Assessment Report: Climate Change</a>,” released in 2007, stated unequivocally that human activities are <a href="#" title="Moreover, the IPCC found that “Most of the observed increase in global average temperatures since the mid-20th century is very likely [greater than 90% certainty] due to the observed increase in anthropogenic greenhouse gas concentrations.”">causing</a> an increase in GHG concentrations: “The global increases in carbon dioxide concentration are due primarily to fossil fuel use and land use change, while those of methane and nitrous oxide are primarily due to agriculture.” U.S. government <a href="http://www.globalchange.gov/publications/371&quot; target="_blank">reports</a> concur with this assessment.</p>
<p>For a detailed discussion of the science behind climate change, see <a href="http://www.eli.org/eli-press-books/reporting-on-climate-change%253A-und… on Climate Change: Understanding the Science, 4<sup>th</sup> ed.</a></p>
<p><img src="/sites/default/files/images/taxonomy-climate-image-1.png" alt="Reconstructed Temperature" title="Reconstructed Temperature" border="0" height="369" width="500"><br>Figure 1 from IPCC Third Assessment. <a href="http://en.wikipedia.org/wiki/File:1000_Year_Temperature_Comparison.png"…;
<p>Six main greenhouse gases drive climate change, with the most significant contributor being carbon dioxide. Global Warming Potential (GWP) is a relative measure of the amount of heat that a specific gas traps in the atmosphere over specified time periods.&nbsp; The GWP of carbon dioxide is 1 because it is the baseline unit to which all other gases are compared. Methane has a lifetime <a href="#" title="To really understand how GWPs work, it is important to note that GWP changes depending on the timeframe over which it is calculated. A gas that leaves the atmosphere quickly may have a large short-term warming effect – and thus a high initial GWP - but over the long term the GWP may fall significantly as the gas leaves the atmosphere. The converse is true for GHGs that stay in the atmosphere for a long time. Gases with the highest GWPs both trap a lot of heat and linger in the atmosphere for a long time.">GWP</a> of 12 which means that methane in the atmosphere has 12 times the warming potential as carbon dioxide.</p>
<table style="border-color: #000000; border-width: 1px; border-style: solid; width: 100%;" border="1" cellpadding="0" cellspacing="0">
<tbody>
<tr>
<td style="border-color: #000000; border-style: solid; border-width: 1px;" rowspan="2">
<p align="center"><strong>GWP values and<br>lifetimes from<br>2007 IPCC<br>Assessment</strong></p>
</td>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p align="center"><strong>Lifetime</strong></p>
</td>
<td style="border-color: #000000; border-style: solid; border-width: 1px;" colspan="3">
<p align="center"><strong>Global Warming Potential Time Horizon</strong></p>
</td>
</tr>
<tr>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p align="center"><strong>&nbsp;</strong></p>
</td>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p align="center"><strong>&nbsp;</strong></p>
<p align="center"><strong>20 years</strong></p>
</td>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p align="center"><strong>&nbsp;</strong></p>
<p align="center"><strong>100 years</strong></p>
</td>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p align="center"><strong>&nbsp;</strong></p>
<p align="center"><strong>500 years</strong></p>
</td>
</tr>
<tr>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p>Methane</p>
</td>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p>12</p>
</td>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p>72</p>
</td>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p>25</p>
</td>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p>7.6</p>
</td>
</tr>
<tr>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p>Nitrous Oxide</p>
</td>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p>114</p>
</td>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p>289</p>
</td>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p>298</p>
</td>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p>153</p>
</td>
</tr>
<tr>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p>HFC-23&nbsp; (hydrofluorocarbon)</p>
</td>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p>270</p>
</td>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p>12,000</p>
</td>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p>14,800</p>
</td>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p>12,200</p>
</td>
</tr>
<tr>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p>HFC-134a (hydrofluorocarbon)</p>
</td>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p>14</p>
</td>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p>3,830</p>
</td>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p>1,430</p>
</td>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p>435</p>
</td>
</tr>
<tr>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p>Sulfur Hexafluoride</p>
</td>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p>3,200</p>
</td>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p>16,300</p>
</td>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p>22,800</p>
</td>
<td style="border-color: #000000; border-style: solid; border-width: 1px;">
<p>32,600</p>
</td>
</tr>
</tbody>
</table>
<p>&nbsp;</p>
<p>Adapted from <a href="https://www.ipcc.ch/publications_and_data/ar4/wg1/en/ch2s2-10-2.html">h…;
<p>The human activities in the United States that contribute the largest portion of greenhouse gases to the atmosphere are electric power generation, transportation, industry, agriculture, and commercial buildings.</p>
<p><img src="/sites/default/files/images/taxonomy-climate-image-2.png" alt="Sources of Carbon Dioxide Emissions" title="Sources of Carbon Dioxide Emissions" border="0" height="274" width="500"></p>
<p>From <a href="http://elr.info//news-analysis/40/10547/implementing-behavioral-wedge-d…;
<p>While this list clearly illustrates that addressing greenhouse gas emissions requires efforts in the energy, transportation, building, industrial, and other vital economic sectors, everyday activities of the general population contribute significantly to GHGs as well:</p>
<p><img src="/sites/default/files/images/taxonomy-climate-image-3.png" alt="Sources of Green House Gas Emissions" title="Sources of Green House Gas Emissions" border="0" height="512" width="500"></p>
<p>From <a href="http://elr.info//news-analysis/40/10547/implementing-behavioral-wedge-d…;
<p>Thus, GHG regulation touches the entire economy and everyday choices we all make.</p>
<h3><a name="international-initiatives"></a>International Initiatives</h3>
<p>The <a href="http://unfccc.int/2860.php&quot; target="_blank">United Nations Framework Convention on Climate Change</a> (UNFCCC) was introduced in 1992 in an effort to control the emission of greenhouse gases that contribute to global climate change. The Convention established several principles for how the international would go about addressing climate change, including the notion that developed countries, who had contributed the most to global warming in the past, had a duty to take the lead in mitigating the adverse effects of climate change, also known as “common but differentiated responsibilities.” The parties to UNFCCC also agreed to develop national greenhouse gas emissions inventories, share scientific research and technology, and help create measures for climate change adaptation. None of these agreements, however, were legally binding.</p>
<p>In December 1997, the Kyoto Protocol to the UNFCCC established a binding commitment from 37 industrialized nations and the European Community to reduce <a href="#" title="Kyoto covers six greenhouse gases—CO2, methane, nitrous oxide, hydroflourocarbons, perflourocarbons, and sulfur hexafluoride.">GHG</a> emissions to an average of 5% below 1990 levels during the commitment period 2008 and 2012. These developed nations agreed to meet nation-specific targets to reduce their GHG emissions. In contrast, developing nations, even large developing nations such as India and China, were not required to meet emission reduction targets during this first round and would not be asked to meet emission targets.</p>
<p>In the summer of 1997, before the Kyoto Protocol was agreed to, the U.S. Senate on a 95-0 vote adopted a <a href="http://www.gpo.gov/fdsys/pkg/BILLS-105sres98ats/pdf/BILLS-105sres98ats…; target="_blank">resolution</a> to oppose any treaty that failed to impose similar duties on both developing and developed nations. Despite this vote, the U.S. president, Bill Clinton, signed the Protocol. However, the Protocol was never submitted to the Senate for ratification. By 2001, the United States announced that the Protocol would not be ratified. The Protocol entered into force in the ratifying countries on February 16, 2005.</p>
<blockquote>
<p>For a discussion of why the United States would not enter into the Kyoto Protocol and issues that constrain U.S. involvement in international efforts against climate change, see the suite of articles including Jody Freeman, “<a href="http://elr.info/news-analysis/41/10695/climate-change-and-us-interests"… Change and U.S. Interests</a>” and a <a href="http://elr.info/news-analysis/41/10726/reply">reply</a&gt; with responses by <a href="http://elr.info/news-analysis/41/10724/review-freeman-and-guzman%E2%80%… Hopkins</a>, <a href="http://elr.info/news-analysis/41/10720/critiquing-critique-climate-chan… Morgenstern</a>, <a href="http://elr.info/news-analysis/41/10717/response-climate-change-and-us-i… Sheeran</a>, and <a href="http://elr.info/news-analysis/41/10712/comment-climate-change-and-us-in… Johnson</a> as well as Richard Cooper, “<a href="http://elr.info/news-analysis/31/11484/kyoto-protocol-flawed-concept">T… Kyoto Protocol: A Flawed Concept</a>” and Robert Nordhaus, <a href="http://elr.info/news-analysis/30/11061/framework-achieving-environmenta… Framework for Achieving Environmental Integrity and the Economic Benefits of Emissions Trading Under the Kyoto Protocol</a>.</p>
</blockquote>
<p>The Protocol put in place <a href="http://unfccc.int/kyoto_protocol/mechanisms/items/1673.php&quot; target="_blank">three flexibility mechanisms</a> to help member countries reach emissions targets in addition to direct lowering of emissions: <a href="#" title="The emissions trading scheme is similar to the United States’ Clean Air Act Acid Rain Program. Under the Protocol, developed countries have an ‘assigned amount’ of allowable GHG emissions over the commitment period. Parties can buy and sell “assigned amount units” or other types of trading units, each of which correspond to the right to emit one CO2 equivalent ton.">emissions trading</a>, the <a href="#" title="The Protocol created the Clean Development Mechanism (CDM), which is the primary “offset” framework for helping industrialized countries achieve their reductions. In addition to reducing actual GHG output, industrialized countries can pay developing countries for certified emission reductions generated from projects that reduce GHG emissions in those countries—which is called an offset. CDM projects must show that the reductions achieved are above and beyond any that would otherwise occur—a concept called additionality. In other words, to get credit for reducing emission an investing country has to show the reduction was because of the collaboration and investment from an outside party and that but for that reductions would not have occurred. The CDM has met with significant controversy as implemented to date.">clean development mechanism</a>, and <a href="http://ji.unfccc.int/index.html&quot; title="Joint implementation allows two developed countries to transfer emission reductions.">joint implementation</a>.</p>
<blockquote>
<p>For a discussion of how offsets might work in the United States, see Kyle Danish, “<a href="http://elr.info/news-analysis/40/10610/international-offsets-and-us-cli… Offsets and U.S. Climate Change Legislation</a>.</p>
</blockquote>
<p>The first compliance period of the Kyoto Protocol was 2008-2012. At the <a href="http://unfccc.int/essential_background/items/6825.php&quot; target="_blank">Durban conference of the parties</a>, this was extended. The parties <a href="http://unfccc.int/resource/docs/2011/cop17/eng/09a01.pdf&quot; target="_blank">agreed</a> to negotiate by 2015 an agreement to take effect not later than 2020 that would involve both developed and developing countries to mitigate climate change and seek to keep global warming no greater than 2ºC.</p>
<p>As part of its effort to implement the Kyoto Protocol, the European Union has implemented perhaps the most advanced emissions trading scheme, the <a href="http://ec.europa.eu/clima/policies/ets/index_en.htm&quot; target="_blank">European Trading System</a> (ETS). <a href="#" title="ETS operates in 30 countries (27 EU member states plus the three additional members of the European Economic Area - Iceland, Liechtenstein and Norway) and applies to carbon dioxide (and some nitrous oxide) emissions from over 10,000 power plants, combustion plants, refineries, metal works and manufacturing facilities. In 2012, the aviation sector was added into the system, and in 2013 additional gases and industries will be added.">Europe’s</a> declared goal is for emissions in 2020 to be 21% lower than in 2005.</p>
<blockquote>
<p>For a discussion of California’s attempt to link to the ETS, see Hanna Chang, <a href="http://elr.info/news-analysis/37/10771/foreign-affairs-federalism-legal… Affairs Federalism: The Legality of California's Link With the European Union Emissions Trading Scheme</a>.</p>
</blockquote>
<h3><a name="federal-greenhouse-gas-efforts"></a>Federal Greenhouse Gas Efforts</h3>
<p>Congress has made multiple attempts to enact comprehensive greenhouse gas legislation, but so far no bill has passed both legislative houses. The most recent bill, the <a href="http://www.gpo.gov/fdsys/pkg/BILLS-111hr2454eh/pdf/BILLS-111hr2454eh.pd… Clean Energy and Security Act of 2009</a> (H.R. 2545), was passed by the House only to die in the Senate. The Act’s central mechanism was an economy-wide<a href="#" title="What is a Cap-and-Trade and How Does it Work? A GHG cap-and-trade program establishes a market whose goal is to reduce GHG emissions. The “cap” sets a limit on emissions that regulated industries can release into the atmosphere. The amount of this limit is reduced over time thus reducing the total amount of GHG emissions. The “trade” is the market that is created to allow companies to innovate in meeting their emission limit. A company that is able to adopt new mechanisms to come in under their allocated emissions limit can sell their emission credits in the market. A company that is unable to meet their emissions target must purchase credits from the market. In this way, reducing GHG emissions is economically incentivized."> cap-and-trade program</a> for greenhouse gas emissions. Under such a program, a regulatory agency sets a maximum level for annual GHG emissions and distributes emissions allowances for a specified amount of <a href="http://stats.oecd.org/glossary/detail.asp?ID=285">carbon dioxide equivalent</a>. Emitters subject to regulation must then reduce their emissions or acquire enough permits to cover their total output. The Act also included <a href="http://ase.org/resources/american-clean-energy-and-security-act-2009-ti…; target="_blank" title="Renewable Portfolio Standards set enforceable standards that require power providers to obtain energy from renewable sources. For example, in California, the goal is to have power providers in California use renewable energy sources for at least 33% of total power needs by 2020. The RPS works by 1. Setting and enforcing annual renewable energy procurement targets. 2. Approving the renewable energy procurement plans and reviewing renewable energy purchase contracts made by invester-owned utilities (IOUs). 3. Creating standard contract forms and conditions to be used by IOUs in making renewable energy purchases. 4. Determining market price referents (MPRs) for traditional, non-renewable energy sources to serve as benchmarks for pricing renewable energy.">renewable electricity generation standards</a>, a number of energy efficiency incentives, and support to industries that would be particularly affected by GHG regulation. Congress did <a href="http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bill…;, and EPA <a href="http://www.epa.gov/climatechange/emissions/ghgrulemaking.html">has implemented</a>, GHG emissions reporting.</p>
<blockquote>
<p>For a discussion of the Senate bills that addressed climate change, see Kenneth Richards, <a href="http://elr.info/news-analysis/39/10601/comparative-analysis-climate-cha… Analysis of Climate Change Bills in the U.S. Senate</a>.</p>
</blockquote>
<blockquote>
<p>For one approach to getting Congress to act on climate, and a <a href="http://elr.info/news-analysis/40/10757/genius-versus-zombies-address-cl…; to that approach, see Richard Lazarus, <a href="http://elr.info/news-analysis/40/10749/super-wicked-problems-and-climat… Wicked Problems and Climate Change: Restraining the Present to Liberate the Future</a>.</p>
</blockquote>
<blockquote>
<p>For a discussion of the EPA reporting rules, listen and download materials from the ELI Seminar <a href="http://www.eli.org/ghg-reporting-rule-so-far-lessons-learned-and-change… Reporting Rule So Far: Lessons Learned and Changes to Consider</a>.</p>
</blockquote>
<p>The <a href="http://www.epa.gov/&quot; target="_blank">Environmental Protection Agency</a> is currently regulating GHGs under the <a href="http://www.eli.org/keywords/air-1">Clean Air Act</a><a href="#_msocom_16"></a>. While the Clean Air Act regulates many forms of air pollution, it does not mention GHGs by name. On October 20, 1999, a group of private non-profit organizations petitioned EPA to begin regulating greenhouse gas emissions from automobiles as air pollutants under the Clean Air Act. After EPA determined that GHGs were not “air pollutants” subject to CAA regulation and denied the petition, these groups were joined by several states, cities, and citizens’ groups seeking review of EPA’s decision in federal court. In the landmark 2007 decision <a href="http://scholar.google.com/scholar_case?case=16923241216495494762&amp;hl… v. EPA</em></a><a href="#_msocom_17"></a>, the <a href="http://www.nationalaglawcenter.org/assets/crs/RS22665.pdf&quot; target="_blank">Supreme Court held</a> GHGs <em>can</em> be regulated under the Clean Air Act, and that the plaintiffs in the case had standing<a href="#_msocom_18">[SES18]</a> to sue EPA to ask the agency to begin regulating GHGs.</p>
<p>The result of the case was that greenhouse gases from mobile sources were officially considered “air pollutants.” Under the CAA, EPA was obligated to <a href="#" title="42 U.S.C. § 7521(a)(1).">determine</a> whether they “cause or contribute to air pollution which may reasonably be anticipated to endanger health or welfare.” In December 2009, the EPA Administrator issued an <a href="http://www.epa.gov/climatechange/endangerment/&quot; target="_blank">endangerment finding</a>, declaring that “six greenhouse gases taken in combination endanger both the public health and the public welfare,” and that emissions from new motor vehicles “contribute to the greenhouse gas air pollution.”</p>
<p>In light of the endangerment finding, EPA and the National Highway Traffic Safety Administration (NHTSA), issued <a href="http://edocket.access.gpo.gov/2010/pdf/2010-8159.pdf&quot; target="_blank">regulations</a> in May 2010 regulating emissions of these GHGs from <a href="http://www.epa.gov/otaq/climate/regulations.htm&quot; title="EPA and NHTSA have also proposed GHG emissions standards for medium- and heavy-duty vehicles that will apply to new vehicles beginning in 2014 and has proposed standards for cars and light trucks beyond 2017.">cars and light trucks</a> under Title II of the Clean Air Act.</p>
<p>With GHGs now regulated under the CAA, <a href="http://www.gpo.gov/fdsys/pkg/FR-2010-04-02/pdf/2010-7536.pdf&quot; target="_blank">EPA’s interpretation</a> of the Clean Air Act requires it to develop permitting standards for new stationary sources that are major sources of GHGs, such as power plants or manufacturing facilities. EPA is promulgating and implementing regulations for such sources under the <a href="http://www.epa.gov/compliance/monitoring/programs/caa/newsource.html&qu…; target="_blank">new source performance standards</a> and <a href="http://www.epa.gov/nsr/&quot; target="_blank">new source review</a> provisions of the CAA. EPA’s efforts are the subject of significant political controversy and litigation, although challenges to the foundational EPA GHG rulemakings failed to gain traction in court.</p>
<blockquote>
<p>For ELR articles addressing the ability of the Clean Air Act to tackle climate change, see Franz Litz, <a href="http://elr.info/news-analysis/40/10480/what-expect-epa-regulation-green… to Expect From EPA: Regulation of Greenhouse Gas Emissions Under the Clean Air Act</a>, Robert McKinstry, <a href="http://elr.info/news-analysis/41/10301/clean-air-act-suitable-tool-addr… Clean Air Act: A Suitable Tool for Addressing the Challenges of Climate Change</a>, and Brigham Daniels, <a href="http://elr.info/news-analysis/39/10837/regulating-climate-what-role-cle… Climate: What Role for the Clean Air Act?</a></p>
</blockquote>
<blockquote>
<p>Listen to and download materials from the ELI seminar <a href="http://www.eli.org/dc-circuits-rulings-epas-greenhouse-gas-rulemakings"… D.C. Circuit’s Rulings on EPA’s Greenhouse Gas Rulemakings</a> to learn how the court upheld EPA’s regulatory program and watch and download materials from a seminar immediately after the court’s oral arguments at <a href="http://www.eli.org/debrief-dc-circuits-oral-arguments-epas-ghg-rulemaki…; target="_blank">Debrief of the D.C. Circuit’s Oral Arguments on EPA’s GHG Rulemakings</a>.</p>
</blockquote>
<p>There are many other federal statutes and provisions that can be used to try to control GHGs, ranging from the <a href="http://elr.info/legislative/federal-laws/national-environmental-policy-… Environmental Policy Act</a> to the <a href="http://www.bdlaw.com/assets/attachments/Climate_Change_and_the_Clean_Wa…; target="_blank">Clean Water Act</a> and <a href="http://elr.info/legislative/federal-laws/endangered-species-act">Endang… Species Act</a> and presidential <a href="http://www.whitehouse.gov/assets/documents/2009fedleader_eo_rel.pdf&quot; target="_blank">Executive Orders</a>. In addition, some are trying to use the courts by arguing there are federal and state <a href="http://www.eli.org/keywords/governance#common-law">common law</a><a href="#_msocom_21"> </a>causes of action against emitters of GHGs as well as <a href="http://www.eli.org/keywords/governance#public-trust">public trust</a><a href="#_msocom_22"></a> doctrine claims.</p>
<h3><a name="state-initiatives"></a>State Initiatives</h3>
<p>States have taken various approaches to address climate change, including the formation of <a href="#regional-initiatives">regional programs</a><a href="#_msocom_23"></a> to address GHG emissions. Among states, <a href="#california-global-warming-solutions-act">California</a><a href="#_msocom_24"></a> has taken the most comprehensive steps toward GHG control, and many <a href="#local-initiatives">localities</a><a href="#_msocom_25"></a> have also undertaken GHG reduction initiatives.</p>
<h5><a name="regional-initiatives"></a>Regional Initiatives</h5>
<p>The <a href="http://rggi.org/&quot; target="_blank">Regional Greenhouse Gas Initiative</a> (RGGI) in the Northeast was the first regional GHG reduction effort to be formed, followed by the <a href="http://www.wci-inc.org/&quot; target="_blank">Western Climate Initiative</a> and the <a href="http://www.c2es.org/what_s_being_done/in_the_states/mggra&quot; target="_blank">Midwestern Greenhouse Gas Reduction Accord</a>. RGGI, formed in December 2005, includes several states in the Northeast and the mid-Atlantic. The agreement applies only to fossil-fuel powered electric generators above a certain size, and covers only CO2 emissions. The core mechanism of RGGI is a market-based cap-and-trade program. The <a href="http://www.rggi.org/docs/Documents/RGGI_Fact_Sheet.pdf&quot; target="_blank">agreement</a> caps CO2 emissions at 2009 levels and requires regulated power plants to hold allowances for each ton of CO2 they emit using a cap and trade program. States are given broad discretion over many aspects of implementation, including initial allocation of allowances, permitting procedures, and exemptions for certain types of facilities. All states are required to direct some percentage of allowance auction proceeds toward energy reinvestment programs that benefit consumers. For example, Maine uses a portion of auction proceeds to subsidize construction of combined heat and power units to improve energy efficiency in factories. In May 2011, New Jersey indicated it is withdrawing from RGGI, and the state legislatures in other states have attempted to withdraw other states from RGGI.</p>
<p>Two other regions have begun to take steps toward implementing their own GHG reduction programs. The <a href="http://www.wci-inc.org/&quot; target="_blank">Western Climate Initiative</a> (WCI), comprising several western states and parts of Canada, was formed in 2007. However, Mexico, Arizona, Washington, Oregon, Montana and Utah have all recently withdrawn leaving only California and four Canadian provinces in the program. WCI intended to implement a cap-and-trade program, similar to RGGI, beginning in 2012, but that is no longer likely, although California may push ahead, perhaps with Canadian partners or on its own. . The withdrawn states have all joined <a href="http://www.westernclimateinitiative.org/document-archives/general/North…; target="_blank">North America 2050</a>, a new initiative within WCI that does not include a cap-and-trade program. Seven Midwestern states and Canadian provinces formed the Midwestern Regional Greenhouse Gas Accord (MGGRA) and agreed to develop a <a href="https://web.archive.org/web/20140522105252/http://michigancondemnationb…; target="_blank">regional cap-and-trade program</a>, but the initiative has stalled.</p>
<h5><a name="california-global-warming-solutions-act"></a>California Global Warming Solutions Act</h5>
<p>California passed the <a href="http://www.leginfo.ca.gov/pub/05-06/bill/asm/ab_0001-0050/ab_32_bill_20…; target="_blank">Global Warming Solutions Act in 2006</a>, containing several major climate change initiatives. The Act’s overall goal is statewide reduction of GHG emissions to 1990 levels by 2020. The <a href="http://www.arb.ca.gov/homepage.htm&quot; target="_blank">California Air Resources Board</a> (CARB) is charged with developing and enforcing the implementing regulations of the Act, most of which are to become effective in 2012.</p>
<p>CARB’s <a href="http://www.arb.ca.gov/cc/scopingplan/scopingplan.htm&quot; target="_blank">Scoping Plan</a> outlines the implementation of the Global Warming Solutions Act, including:</p>
<ul>
<li>A statewide <a href="http://www.arb.ca.gov/cc/capandtrade/capandtrade.htm&quot; target="_blank">cap-and-trade program</a> encompassing sectors that account for over 80% of GHG emissions</li>
<li>Stricter energy efficiency standards for <a href="http://www.energy.ca.gov/title24/2008standards/index.html&quot; target="_blank">buildings</a> and <a href="http://www.energy.ca.gov/appliances/&quot; target="_blank">appliances</a></li>
<li>An increase in required percentage of renewable electricity production under the state’s <a href="http://www.cpuc.ca.gov/PUC/energy/Renewables/&quot; target="_blank">portfolio standard</a></li>
<li>Higher <a href="http://www.arb.ca.gov/msprog/zevprog/factsheets/advanced_clean_cars_eng…; target="_blank">fuel efficiency standards</a> for cars and light trucks</li>
<li>Low carbon <a href="http://www.arb.ca.gov/fuels/lcfs/lcfs.htm&quot; target="_blank">fuel standard</a></li>
<li><a href="http://www.arb.ca.gov/cc/energyaudits/energyaudits.htm&quot; target="_blank">Energy efficiency auditing</a> at industrial facilities.</li>
</ul>
<p>CARB has <a href="http://www.arb.ca.gov/cc/implementation/implementation.htm&quot; target="_blank">implemented</a> rules requiring <a href="http://arb.ca.gov/cc/reporting/ghg-rep/ghg-rep.htm&quot; target="_blank">GHG emissions reporting and verification</a> and identified “<a href="http://www.arb.ca.gov/cc/ccea/ccea.htm&quot; title="CARB has created nine early action regulations to reduce GHGs: • Low-carbon fuel standards • Methane capture from landfills • Reduction of HFC-134a, a hydroflourocarbon common in mobile air conditioning units • Reduction of GHGs produced by the semi-conductor industry • Multi-sector reduction of sulfur hexafluoride (the most potent GHG) • Limiting GHGs used in consumer products, such as aerosol propellants • Improving fuel efficiency for large semi-trucks • Regulations to encourage greater maintenance of car tire pressure to improve fuel efficiency. • Rules requiring docked ships to obtain power from sources other than their onboard diesel engines. Early Action Items (July 6, 2011).">early action items</a>” reduction measures that could be acted on quickly while the larger implementing regulations are under development.</p>
<p>To further support the goals of the Global Warming Solutions Act, California passed the <a href="http://www.leginfo.ca.gov/pub/07-08/bill/sen/sb_0351-0400/sb_375_bill_2…; target="_blank">Sustainable Communities and Climate Protection Act of 2008</a> and a companion bill <a href="http://www.leginfo.ca.gov/pub/07-08/bill/sen/sb_0701-0750/sb_732_bill_2…; target="_blank">Senate Bill 732</a>. The Sustainable Communites law requires ARB to develop regional GHG emission reduction targets for passenger vehicles and to establish targets for the State's 18 metropolitan planning organizations (MPOs). The MPOs are required to develop a <a href="http://www.arb.ca.gov/cc/sb375/sb375.htm&quot; target="_blank">“sustainable communities strategy”</a> that will meet the emissions reduction targets through adopting sustainable land use, housing and transportation policies. Senate Bill 732 establishes and funds a <a href="http://sgc.ca.gov/&quot; target="_blank">Strategic Growth Council</a> to support these sustainable planning activities.</p>
<h5><a name="local-initiatives"></a>Local Initiatives</h5>
<p>Many localities have undertaken efforts to reduce GHG emissions, such as through the <a href="http://www.usmayors.org/climateprotection/agreement.htm&quot; target="_blank">U.S. Conference of Mayors Climate Protection Agreement</a> and <a href="http://www.iclei.org/&quot; target="_blank">ICLEI</a>. Municipal government steps to address climate change have included developing climate change mitigation and adaptation plans, developing plans to encourage green development and encouraging new programs such as solar energy programs and energy efficiency drives that serve as models for other cities.</p>
<blockquote>
<p>For a discussion of the role of localities in climate law and policy, read Patricia Salkin,<a href="http://elr.info/news-analysis/40/10562/cooperative-federalism-and-clima… Federalism and Climate Change: New Meaning to "Think Globally--Act Locally"</a> and Michael Burger, <a href="http://elr.info/news-analysis/39/11161/empowering-local-autonomy-and-en… Local Autonomy and Encouraging Experimentation in Climate Change Governance: The Case for a Layered Regime</a>.</p>
</blockquote>
<h3>Climate Adaptation Efforts</h3>
<p>While many efforts to address climate change focus on greenhouse gas emission reduction, also known as mitigation, adaptation to climate change is also an important aspect of climate change governance. Increasingly, federal, state and local governments are recognizing the importance of planning for a changing climate and the effects it will have on public health, the environment, and the built environment. For example, a Council on Environmental Quality <a href="http://www.whitehouse.gov/administration/eop/ceq/initiatives/adaptation…; target="_blank">task force</a> developed recommendations for federal agencies to follow in integrating climate change adaptation planning into their regular planning activities. Many U.S. cities, such as <a href="http://www.epa.gov/statelocalclimate/documents/pdf/reed_presentation_11…; target="_blank">Chula Vista, CA</a>, and <a href="http://www.epa.gov/statelocalclimate/documents/pdf/engert_presentation_…; target="_blank">Keene, NH</a>, have begun the process of adaptation planning at the local level. <a href="http://unfccc.int/cooperation_and_support/financial_mechanism/adaptatio…; target="_blank">International efforts</a> are also beginning to focus on <a href="http://www.eli.org/climate-energy/strengthen-capacity-adapt-climate-cha…; as well as mitigation.</p>

Overcoming Barriers Created by Cost Share Requirements: Considerations for advancing natural infrastructure throughout the Mississippi River Basin
Author
Cecilia Diedrich
Sofia O'Connor
Isabella Blanco
Date Released
December 2023
Cost Share Report Cover

The federal government administers many programs to help states, local communities, tribes, and territories as they undertake infrastructure projects of all types, including resilience measures and natural infrastructure aimed at mitigating risks from natural hazards and disasters. The increasing impacts of climate change make investment in these project types more important than ever to help prepare and protect communities across the country. While this work is paramount, it comes with a high price tag.

Unlocking Nature's Potential: A Guide to Navigating Federal Permits and Environmental Reviews to Facilitate Use of Nature-Based Solutions
Author
Regina Buono
Jarryd Page
Date Released
December 2023
Unlocking Natures Potential ELI Report Cover

Natural and nature-based infrastructure (NNBI) projects have been shown to be helpful in addressing environmental problems across various landscapes and to provide co-benefits not offered by traditional infrastructure solutions. However, as they are increasingly considered for implementation, project proponents face the necessity of securing regulatory approval from the appropriate federal or state authorities.

USACE Project Partnership Agreements: Problematic Provisions for Non-Federal Sponsors
Author
Zoe Vogel
Amy Reed
Date Released
December 2023
USACE PPAs ELI Report Cover

Cost-shared water resource development projects led by the U.S. Army Corps of Engineers require an agreement in writing between the Corps and the project’s nonfederal sponsor. Such an agreement, known as a Project Partnership Agreement (PPA), is crucial to the successful construction and operation of proposed water resource development projects across the country. The PPA serves as a framework for the nature of the partnership throughout the course of the project’s life.

Strong Enforceable Policies - Examples and Tips
Author
Amy Reed
Adam Schempp
Date Released
December 2022
sunny coast line with grass in the forefront and sandy dunes in the background

Enforceable policies (EPs) are the backbone of federal consistency review. They provide the substantive standards on which state and territorial coastal management programs (CMPs) rely to influence federal actions in and affecting the coastal zone through the federal consistency process, pursuant to Section 307 of the Coastal Zone Management Act (CZMA) (16 U.S.C. § 1456).

A Down Payment on Climate Change
Author
Jordan Diamond - Environmental Law Institute
Environmental Law Institute
Current Issue
Issue
6
drawing of Jordan Diamond, a woman with long dark hair in a blazer

When I last sat down to write this column, the Supreme Court had just issued its 6-3 decision in West Virginia v. EPA. As I said at the time, it was disheartening, and many in the environmental law field were assessing how to bounce back from its potential effects limiting agency action. Fast-forward two months, and while the concerns raised by that case aren’t gone, we’ve spun in the other direction. Now, I’m sitting at my computer pondering how to succinctly capture the largely climate-focused initiatives newly enshrined in the Inflation Reduction Act—which, together with last year’s bipartisan Infrastructure Investment and Jobs Act, constitutes the most important environmental legislation in years.

The IRA has created buzz, as the core of its provisions are programs to support climate and energy action. Does it cover everything? Of course not. Does it have less than desirable provisions? Of course. Is it enough funding? I’ve yet to encounter a circumstance where the answer to that question is “yes,” and here is no different. But it is the largest influx of climate spending seen to date, and, especially in tandem with the dollars flowing from the Infrastructure Law, that is exciting. Not only because of the dedicated spending they provide, but also the effect it will have across industries.

The IRA passed as a budget reconciliation bill designed to generate over $700 billion in revenue, primarily through a 15 percent corporate minimum tax, prescription drug pricing reform, a 1 percent fee on stock buybacks, and IRS tax enforcement support. In the vicinity of $300 billion of this revenue will go to deficit reduction. And $369 billion will go toward addressing energy security, climate change, and the like.

The majority of the IRA’s energy and climate provisions come in the form of subsidies and direct payments. Various aspects complement or build upon funding provided under the Infrastructure Law and are focused on supporting climate change mitigation, resilience, and adaptation efforts. Examples range from increasing renewable energy production to greater support for lower-income household efficiency and resilience improvements, and from funding for fenceline air quality monitoring to electric vehicle tax credits.

In short, the IRA takes an all-of-the-above approach to spurring climate action. Forecasts say the package puts the United States on a path toward reducing emissions 40 percent below 2005 levels by 2030. And in sight is the goal of a 50-52 percent reduction—which is our Nationally Determined Contribution under the Paris Agreement. Key to its success, though, will be the way agencies structure and distribute these funds to maximize environmental and social impacts.

One of the most meaningful aspects of this spending is that, just as with the Infrastructure Law, the IRA’s climate and energy spending falls within the ambit of Justice40—the goal, set by President Biden’s Executive Order 14008, that 40 percent of the overall benefits of certain federal investments (including in climate, clean energy, and water infrastructure) go to communities that have been marginalized, underserved, and overburdened by pollution.

Agencies are currently working under interim guidance and developing strategies for implementing Justice40. This is by no means simple to effectively and efficiently execute, especially given the complexity of much federal funding that goes through an additional layer of state disbursement. Nonetheless, it is critically important that we realize Justice40’s promise, if society is going to make progress in repairing the imbalance and injustice seen in the distribution of environmental harms and benefits.

Part of the discussion of the “major questions doctrine” raised in the West Virginia v. EPA majority opinion focused on the idea that issues of massive economic significance should be addressed in the first instance by Congress, not by agencies—see the Debate on the doctrine starting on page 50.

On the one hand, in the wake of that decision, a litany of questions remain about where the weight of decisionmaking lies, and what authorities governments at all levels have to address climate change on needed timelines. On the other hand, when you look at the IRA and the Infrastructure Law cumulatively, over the last year Congress has directed close to a trillion dollars that supports climate, energy, and environmental action.

We know more will be needed, because addressing the challenges before us requires transformative change across virtually every aspect of our daily lives. But this is a powerful step forward. So we take it.

On New Laws' Climate Change Funding.

Preparing for Climate Disasters
Author
David J. Hayes - NYU School of Law
Jessica Grannis - National Audubon Society
Sarah Greenberger - National Audubon Society
NYU School of Law
National Audubon Society
National Audubon Society
Issue
1
Preparing for Climate Disasters

The United States knows how to respond to disasters. When calamity strikes, the Federal Emergency Management Agency swings into action, opens the national coffers, and leans on state governments to deliver relief supplies to affected communities. The execution occasionally falters, but the playbook is familiar and, by and large, sound.

The dramatic increase in the frequency and severity of natural disasters, however, requires writing a new chapter in the playbook. Climate change has converted what were formerly 100-year and 500-year storms and floods into common events, triggering fiscally irresponsible repeat spending on disaster after disaster. The United States is beginning to acknowledge this new reality and chart a path toward more deliberate preparation for climate events by engaging in pre-disaster planning, and investing in resilient infrastructure that can adsorb big hits — saving money, life, and limb in the process.

Congress has recognized that fiscal prudence demands this result. With studies showing that every dollar spent on hazard mitigation saves six dollars in future disaster costs, Congress has quietly been accompanying billion-dollar post-disaster relief appropriations with more limited (but not insignificant) pre-disaster mitigation funding. Then, in a breakthrough Congress in 2018 enacted the Disaster Recovery Reform Act, which anticipates that FEMA will set aside up to six percent of all money appropriated to disaster relief to support investments in pre-disaster planning and infrastructure. This new program, called Building Resilient Infrastructure and Communities, appropriately known as BRIC, is just gearing up now. When fully launched, the program will direct billions of dollars toward making our communities more resilient and more capable of responding to disastrous storms and floods.

While this new program is necessary and appropriate, the United States is not set up to maximize its beneficial impact. Unless it provides much more significant planning and execution assistance than is now available, FEMA could transfer billions in ill-conceived hazard mitigation grants to states, tribes, local communities, and territories, representing a massive lost opportunity.

The incoming Biden administration must not allow this to happen. We know what can go wrong. FEMA and other first responders who are expert in implementing post-disaster efforts are not as skilled in identifying and evaluating long-term resilience solutions. Too often, pre-disaster hazard mitigation money flows to familiar, off-the-shelf engineered projects — whether they represent the best long-term solutions or not. Traditional economic tools ignore or under count ecosystem benefits, community preferences, and other less easily monetized benefits. And frontline communities that face disproportionate risks from disaster events may not even be consulted and, if they are, have limited resources or capacity to participate in the decisionmaking process.

Unless addressed, these shortcomings will haunt FEMA’s new program. Without an organized repository of information on existing threats and emerging best practices, a regularized structure that solicits and evaluates promising investment alternatives, and systematic follow-up that tests and records whether resilience projects provide promised benefits, billion-dollar mistakes will continue to be made.

For vulnerable coastal areas, these missing programmatic elements mean that gray infrastructure projects like sea walls and other armoring techniques will continue to scarf up a disproportionate share of resilience spending. FEMA already has demonstrated its propensity to be stuck in the do-loop of rebuilding communities in flood zones again and again — particularly after the Trump administration rescinded the Federal Flood Risk Management Standards that would have required communities to consider future flood risk when rebuilding.

This article reviews these issues and offers recommendations for how to maximize the effective disbursement of the billions that FEMA and other federal agencies will be spending to improve the resilience of vulnerable coastal resources and infrastructure. We focus on investments in coastal infrastructure because we know that under its new BRIC program, FEMA will be providing large pre-disaster mitigation grants to states that are being hammered by sea-level rise and climate-infused mega storms. Also, in the aftermath of recent hurricanes and the Deepwater Horizon oil spill, a large number of coastal resilience projects already are underway along the Eastern Seaboard and in the Gulf of Mexico, providing a rich source of new data and experiential learning that can and should inform the future direction of FEMA’s new grant program and other pre-disaster resilience spending.

After Hurricane Sandy, for example, the Department of Housing and Urban Development led the innovative National Disaster Resilience and Rebuild by Design competitions, while the Department of the Interior and Fish and Wildlife Service invested more than $300 million in coastal resilience projects across the Northeast and Mid-Atlantic. Likewise, after Hurricane Harvey, Congress provided over $28 billion to HUD to support recovery in lower-income communities, and set aside $12 billion to help these neighborhoods mitigate risks from future disasters. The National Oceanic and Atmospheric Administration has ramped up its National Oceans and Coastal Security Fund to invest in myriad restoration projects following other hurricane disasters. And the Deepwater Horizon oil spill disaster spawned settlements that have allocated a jaw-dropping $16 billion toward coastal and ocean-related environmental and economic restoration activities in the gulf.

Although our focus is on coastal investments, the principles identified in our article have equal bearing in other disaster-prone contexts, including wildfires, inland flooding, tornados, and other extreme weather events made more common by climate change.

The year 2020 was a record-breaking period of natural disasters, closing out two decades in which the United States has seen hundreds of billions in economic losses and thousands of fatalities. Warmer coastal waters and rising seas are increasing the intensity of weather events, driving storm surges further inland, and unleashing biblical-scale rain events in communities like Houston. And these disasters are disproportionately affecting low-income neighborhoods and communities of color. Economic inequality, lack of investment, and proximity to pollution all exacerbate threats from climate-related disasters, which was demonstrated this year with deadly consequence as a triad of storms successively hit Southwest Louisiana — a region that is already overburdened with pollution due to its prevalence of heavy industry. Scientists predict that more devastation is in store as the planet continues to warm, estimating that without action the United States stands to lose nine percent of its GDP by 2060 — equal to the economic losses recorded during the COVID-19 pandemic, but repeated year after year.

These statistics expose the need for new approaches to how communities recover from and rebuild after disasters. We know that because of the impetus to quickly “get things back to normal,” federal funders and grantees make numerous mistakes, including often turning to outdated, environmentally harmful approaches to protect coastal communities and resources — like rebuilding in harm’s way and relying heavily on gray infrastructure such as levees and sea walls.

The challenge and opportunity provided by the upcoming flood of federal dollars toward pre-disaster hazard mitigation activities calls for a much more systematic and disciplined approach. FEMA and other federal funders should be pushing states and other governmental entities to engage in planning so they can effectively deploy resilience dollars as soon as they become available. They also should be encouraging their grantees to adopt a variety of additional reforms, including increased use of nature-based resilience strategies. Another measure is the development of metrics to measure and verify the effectiveness of resilience projects. They need to provide a clearinghouse and mapping services to help grantees understand their vulnerabilities and learn from the experience of others, while ensuring that all communities — especially disadvantaged ones — have a strong voice in deciding how hazard mitigation dollars are spent. Finally, agencies need to expand private-sector support for these strategies.

It is intuitively obvious that states that have thought ahead and developed sound plans to protect coastal resources will be better positioned to take advantage of FEMA’s BRIC grants and other funding opportunities. Experience backs up this supposition. Louisiana, for example, has developed a comprehensive Coastal Master Plan that provides a science-based frame for directing investments. The plan includes innovative nature-based strategies for enhancing coastal ecosystems and reducing flood and sea-level rise risks.

Louisiana has turned to its CMP to effectively direct funding to well-planned projects, including multiple million-dollar resilience projects that are being funded from the Deepwater Horizon oil spill settlement. For example, Louisiana is building sediment diversions that will redirect silt and sand being carried down the Mississippi River to rebuild protective marshes in areas like the Barataria Bay and Breton Sound. Other gulf states that did not have mature state plans in place had to scramble to come up with appropriate projects for Deepwater Horizon settlement funds.

Although states and local governments must develop hazard mitigation plans to receive FEMA funding, they should be encouraged to develop more comprehensive climate resilience plans — and governments with such plans should be prioritized for federal funding. Federal agencies should also provide technical assistance and guidance to help states and communities develop robust plans and design resilience projects that can be implemented quickly in the aftermath of a disaster. Such plans should consider future climate risks and identify strategies for building long-term resilience. Plans also should consider risks to both the natural and built environments and identify ways of preserving and restoring natural assets as a means of reducing risks and enhancing resilience for both people and wildlife. Needless to say, states with robust resilience plans will be better able to quickly deploy scarce resources and deliver more cost-effective projects that generate multiple benefits for vulnerable communities.

The Obama administration’s launch of a $1 billion National Disaster Resilience Competition after Hurricane Sandy provides evidence that supporting state planning and project design efforts can pay dividends. The Rockefeller Foundation brought in a range of experts who trained and helped state and local applicants develop innovative resilience projects that addressed multiple community challenges. In New Orleans, for example, the city is reintegrating nature, using green infrastructure approaches to improve stormwater management, reduce flooding, and create recreational amenities in underserved neighborhoods.

States should be encouraged to leverage other funding sources and take regulatory and incentive-based approaches to complement federal investments. FEMA and other federal agencies should consider using the carrot of federal funding to incentivize state and local governments to adopt proactive approaches. Some states already are putting in place new programs that consolidate disparate funding sources and operational capabilities to focus on resilience priorities. For example, South Carolina recently passed legislation to create an Office of Resilience to coordinate planning activities, and a Resilience Revolving Fund that will combine state and federal resources and support investments in floodplain buyouts and restoration efforts that reduce flood risks in communities. FEMA should use its BRIC program to reward states that put some of their own skin in the important resilience game.

Another important step is to advance nature-based approaches. FEMA and other federal agencies making coastal resilience grants should insist that states propose the deployment of natural infrastructure projects in concert with, or as an alternative to, gray infrastructure. The federal government should explicitly acknowledge and credit the additional benefits that typically accompany such nature-based solutions. By signaling its preference, the feds will encourage states to take such projects seriously.

To achieve this end, we need to remove outdated federal rules that present roadblocks to natural infrastructure approaches. Although FEMA recently changed its policy to allow for the inclusion of ecosystem service benefits in required benefit-cost analyses — with the specific goal of “allow[ing] for easier inclusion of nature-based solutions into risk-based mitigation projects” — that is easier said than done. Ecosystem service benefits are notoriously difficult to monetize. Modelling that is out-of-reach for most applicants is often needed to demonstrate the risk reduction benefits of nature-based projects. Even then, without more aggressive retooling of benefit-cost expectations and discount rates, federal agencies are likely to continue to overvalue the benefits of environmentally harmful short-term solutions like shoreline armoring while not fully accounting for the environmental and social benefits delivered by natural solutions.

One way to address this problem is for FEMA and other federal agencies to fund demonstration projects that test the efficacy of these approaches while providing case examples of monetized ecosystem service benefits, meanwhile overhauling benefit-cost rules that present roadblocks. For example, FEMA could set aside a significant percentage of its mitigation funds for natural infrastructure projects, similar to the green project reserve that requires 20 percent of water infrastructure funding for green stormwater management approaches. This would help demonstrate the effectiveness of these nature-based approaches for reducing flood risks, and also build capacities at all levels of government to design and implement natural infrastructure projects.

When tens of millions are being invested in improving coastal resilience from climate and other impacts, federal funders and local communities alike need to know that taxpayer dollars are being spent wisely. Accordingly, it is important to identify and estimate the social, economic, and environmental benefits that may be associated with various coastal resilience strategies and then to evaluate, over time, whether projects are delivering the expected benefits.

As noted above, this exercise can require the development of sophisticated methodologies that credit the “natural capital” benefits that may accrue from nature-based coastal solutions (such as improved water quality, fishery and avian benefits, blue carbon, etc.), as well as social and economic benefits that may be tied into community preferences and job opportunities. With the assistance of federal scientists, NGOs, academic centers, and grantees, FEMA and other federal agencies need to develop methodologies and metrics that can be used to measure and verify the full range of potential project benefits.

Significant attention also needs to be paid to monitoring project performance. FEMA’s soon-to-be well-funded BRIC program is well-positioned to provide money for the deployment of monitoring protocols for resilience projects. Other federal authorities engaged in approving resilience projects, like HUD, Interior, and NOAA, need to be doing the same. Monitoring data and adaptative management experience must then be made available for agencies at all levels to identify gaps, learn from experience, inform investment and reforms, and establish best practices that can be scaled and replicated.

While the federal government should not use its funding leverage to dictate state decisionmaking, the feds can, and should, use their unique vantage to disseminate information about successes and failures of resilience planning and execution practices all around the United States. This will help planners identify best practices and benchmark their projects.

The federal government can contribute this valuable service by building upon approaches like the U.S. Climate Resilience Toolkit and NOAA’s Digital Coast. The concept would be creating a comprehensive adaptation clearinghouse that catalogues and provides benefit-cost and performance data regarding hundreds of coastal protection (and other climate-related) resilience projects. Such a clearinghouse would include detailed information about projects in an accessible format that would enable users to efficiently gather and test out ideas that have been tried in different jurisdictions. Such a clearinghouse also would facilitate direct contacts with state sponsors and project managers, obviating the frustrating sense that jurisdictions are being left to invent the wheel on their own.

As a helpful step for affected agencies and communities, the feds should augment a climate adaptation clearinghouse with a centralized GIS-based mapping service that pulls together data so that states and other interested governments and individuals can evaluate the vulnerability of their communities as well as explore resources in their regions that can reduce climate-related impacts.

In doing mitigation right, it is vital that communities have a voice in decisionmaking. Failures to meaningfully engage with neighborhoods regarding pre-disaster planning and post-disaster responses have led to disparities in recovery outcomes for low-income communities and communities of color. Research has shown that communities of color often never fully rebound after experiencing impacts from extreme weather and are often left worse off than their White neighbors, who have an easier time accessing aid and receive higher disaster payments.

FEMA and other federal agencies involved in funding hazard mitigation planning have a responsibility to provide the resources that communities need to fully consider socioeconomic vulnerabilities and to direct investments to frontline communities that face the greatest threats from climate impacts. To ensure that marginalized communities have a voice in decisionmaking, agencies should provide sustained funding for community-based organizations that can lead planning processes and support meaningful engagement between government decisionmakers and residents.

Louisiana’s Strategic Adaptations for Future Environments initiative provides an example of this type of effort. LA-SAFE is implementing a range of innovative coastal resilience projects that were selected after an extensive, year-long community engagement process that was co-designed and directed by residents of six coastal parishes that were hard hit by Hurricane Isaac in 2012. These community-driven projects were only made possible because of significant funding from HUD and the support of regional philanthropy and academic and nonprofit partners.

Thus, FEMA’s BRIC program and other federal sponsors should provide funding that will enable underserved communities to participate fully in hazard mitigation planning and implementation activities. More generally, Congress should consider increasing the federal cost share for mitigation and resilience investments in economically underserved communities to ensure that resources are being directed to the most at-risk communities. Economically distressed and tribal communities often struggle to raise the needed match, which limits their ability to leverage federal funds to support important investments. While FEMA mitigation programs offer a 90 percent federal cost share for smaller rural communities, larger economically distressed communities still must raise a 25 percent match. Congress should extend more favorable federal cost share to economically disadvantaged communities of any size.

Siloed decisionmaking at the federal level also is limiting the ability of states and communities to identify and implement holistic projects that comprehensively address community challenges. By helping to coordinate funding, permitting, and environmental reviews, federal agencies can support better projects on faster timelines.

Experience confirms that this can be done. After Hurricane Sandy, technical coordinating teams were established to improve coordination among federal agencies administering disaster relief funds and their state counterparts. These teams helped align funding to support a more comprehensive disaster recovery in affected communities. Teams also were established to coordinate permitting across federal agencies and to work with project leads to help them navigate rules and more quickly advance projects. A similar model is being employed in the San Francisco Bay region to coordinate state and federal permitting agencies and speed implementation of restoration and resilience projects that are being funded through Measure AA — a regional parcel tax that is generating $25 million annually to support investments in ecological restoration around the San Francisco Bay.

State and local governments cannot do this work alone. The private sector — including philanthropy, nonprofits, academia, and businesses — also have important roles to play in supporting and enhancing public-sector efforts to build climate resilience. The federal government should support and encourage the private sector to dedicate resources and talent to collective efforts to address the climate crisis.

The Rockefeller Foundation’s collaboration with HUD and its support for the National Disaster Resilience Competition is one model. Conservation land trusts — like Katy Prairie Conservancy in the Houston region — are also supporting flood resilience initiatives by acquiring flood-prone properties and restoring natural ecosystem functions. And nonprofits like Audubon are working with community-based partners to provide technical support and assistance to help neighborhoods design natural infrastructure that enhances climate resilience for both people and wildlife. For example, Audubon California is working with Shore Up Marin City — a multi-racial environmental coalition in a lower-income community in Marin County — to design and restore tidal wetlands that will reduce flood risks and also provide other environmental and recreational amenities in an underserved community. Federal programs should remove barriers to and create incentives for the private sector to support state and local resilience efforts in these ways.

With significant new resources flowing to efforts to reduce risks before disasters strike, the Biden administration has an important opportunity to ensure that state and local governments have the funding and capacities needed to create effective projects that will meet multiple community needs. By implementing the common-sense approaches above, the Biden administration can ensure that communities have the tools and resources needed to build a better future. TEF

LEAD FEATURE With new funding to reduce risks before calamity strikes, the Biden administration has an opportunity to ensure that state and local governments have the resources and capacities needed for effective mitigation projects that will meet multiple community needs.

Preparing for Climate Disasters
Author
David J. Hayes - NYU School of Law
Jessica Grannis - National Audubon Society
Sarah Greenberger - National Audubon Society
NYU School of Law
National Audubon Society
National Audubon Society
Current Issue
Issue
1
Preparing for Climate Disasters

The United States knows how to respond to disasters. When calamity strikes, the Federal Emergency Management Agency swings into action, opens the national coffers, and leans on state governments to deliver relief supplies to affected communities. The execution occasionally falters, but the playbook is familiar and, by and large, sound.

The dramatic increase in the frequency and severity of natural disasters, however, requires writing a new chapter in the playbook. Climate change has converted what were formerly 100-year and 500-year storms and floods into common events, triggering fiscally irresponsible repeat spending on disaster after disaster. The United States is beginning to acknowledge this new reality and chart a path toward more deliberate preparation for climate events by engaging in pre-disaster planning, and investing in resilient infrastructure that can adsorb big hits — saving money, life, and limb in the process.

Congress has recognized that fiscal prudence demands this result. With studies showing that every dollar spent on hazard mitigation saves six dollars in future disaster costs, Congress has quietly been accompanying billion-dollar post-disaster relief appropriations with more limited (but not insignificant) pre-disaster mitigation funding. Then, in a breakthrough Congress in 2018 enacted the Disaster Recovery Reform Act, which anticipates that FEMA will set aside up to six percent of all money appropriated to disaster relief to support investments in pre-disaster planning and infrastructure. This new program, called Building Resilient Infrastructure and Communities, appropriately known as BRIC, is just gearing up now. When fully launched, the program will direct billions of dollars toward making our communities more resilient and more capable of responding to disastrous storms and floods.

While this new program is necessary and appropriate, the United States is not set up to maximize its beneficial impact. Unless it provides much more significant planning and execution assistance than is now available, FEMA could transfer billions in ill-conceived hazard mitigation grants to states, tribes, local communities, and territories, representing a massive lost opportunity.

The incoming Biden administration must not allow this to happen. We know what can go wrong. FEMA and other first responders who are expert in implementing post-disaster efforts are not as skilled in identifying and evaluating long-term resilience solutions. Too often, pre-disaster hazard mitigation money flows to familiar, off-the-shelf engineered projects — whether they represent the best long-term solutions or not. Traditional economic tools ignore or under count ecosystem benefits, community preferences, and other less easily monetized benefits. And frontline communities that face disproportionate risks from disaster events may not even be consulted and, if they are, have limited resources or capacity to participate in the decisionmaking process.

Unless addressed, these shortcomings will haunt FEMA’s new program. Without an organized repository of information on existing threats and emerging best practices, a regularized structure that solicits and evaluates promising investment alternatives, and systematic follow-up that tests and records whether resilience projects provide promised benefits, billion-dollar mistakes will continue to be made.

For vulnerable coastal areas, these missing programmatic elements mean that gray infrastructure projects like sea walls and other armoring techniques will continue to scarf up a disproportionate share of resilience spending. FEMA already has demonstrated its propensity to be stuck in the do-loop of rebuilding communities in flood zones again and again — particularly after the Trump administration rescinded the Federal Flood Risk Management Standards that would have required communities to consider future flood risk when rebuilding.

This article reviews these issues and offers recommendations for how to maximize the effective disbursement of the billions that FEMA and other federal agencies will be spending to improve the resilience of vulnerable coastal resources and infrastructure. We focus on investments in coastal infrastructure because we know that under its new BRIC program, FEMA will be providing large pre-disaster mitigation grants to states that are being hammered by sea-level rise and climate-infused mega storms. Also, in the aftermath of recent hurricanes and the Deepwater Horizon oil spill, a large number of coastal resilience projects already are underway along the Eastern Seaboard and in the Gulf of Mexico, providing a rich source of new data and experiential learning that can and should inform the future direction of FEMA’s new grant program and other pre-disaster resilience spending.

After Hurricane Sandy, for example, the Department of Housing and Urban Development led the innovative National Disaster Resilience and Rebuild by Design competitions, while the Department of the Interior and Fish and Wildlife Service invested more than $300 million in coastal resilience projects across the Northeast and Mid-Atlantic. Likewise, after Hurricane Harvey, Congress provided over $28 billion to HUD to support recovery in lower-income communities, and set aside $12 billion to help these neighborhoods mitigate risks from future disasters. The National Oceanic and Atmospheric Administration has ramped up its National Oceans and Coastal Security Fund to invest in myriad restoration projects following other hurricane disasters. And the Deepwater Horizon oil spill disaster spawned settlements that have allocated a jaw-dropping $16 billion toward coastal and ocean-related environmental and economic restoration activities in the gulf.

Although our focus is on coastal investments, the principles identified in our article have equal bearing in other disaster-prone contexts, including wildfires, inland flooding, tornados, and other extreme weather events made more common by climate change.

The year 2020 was a record-breaking period of natural disasters, closing out two decades in which the United States has seen hundreds of billions in economic losses and thousands of fatalities. Warmer coastal waters and rising seas are increasing the intensity of weather events, driving storm surges further inland, and unleashing biblical-scale rain events in communities like Houston. And these disasters are disproportionately affecting low-income neighborhoods and communities of color. Economic inequality, lack of investment, and proximity to pollution all exacerbate threats from climate-related disasters, which was demonstrated this year with deadly consequence as a triad of storms successively hit Southwest Louisiana — a region that is already overburdened with pollution due to its prevalence of heavy industry. Scientists predict that more devastation is in store as the planet continues to warm, estimating that without action the United States stands to lose nine percent of its GDP by 2060 — equal to the economic losses recorded during the COVID-19 pandemic, but repeated year after year.

These statistics expose the need for new approaches to how communities recover from and rebuild after disasters. We know that because of the impetus to quickly “get things back to normal,” federal funders and grantees make numerous mistakes, including often turning to outdated, environmentally harmful approaches to protect coastal communities and resources — like rebuilding in harm’s way and relying heavily on gray infrastructure such as levees and sea walls.

The challenge and opportunity provided by the upcoming flood of federal dollars toward pre-disaster hazard mitigation activities calls for a much more systematic and disciplined approach. FEMA and other federal funders should be pushing states and other governmental entities to engage in planning so they can effectively deploy resilience dollars as soon as they become available. They also should be encouraging their grantees to adopt a variety of additional reforms, including increased use of nature-based resilience strategies. Another measure is the development of metrics to measure and verify the effectiveness of resilience projects. They need to provide a clearinghouse and mapping services to help grantees understand their vulnerabilities and learn from the experience of others, while ensuring that all communities — especially disadvantaged ones — have a strong voice in deciding how hazard mitigation dollars are spent. Finally, agencies need to expand private-sector support for these strategies.

It is intuitively obvious that states that have thought ahead and developed sound plans to protect coastal resources will be better positioned to take advantage of FEMA’s BRIC grants and other funding opportunities. Experience backs up this supposition. Louisiana, for example, has developed a comprehensive Coastal Master Plan that provides a science-based frame for directing investments. The plan includes innovative nature-based strategies for enhancing coastal ecosystems and reducing flood and sea-level rise risks.

Louisiana has turned to its CMP to effectively direct funding to well-planned projects, including multiple million-dollar resilience projects that are being funded from the Deepwater Horizon oil spill settlement. For example, Louisiana is building sediment diversions that will redirect silt and sand being carried down the Mississippi River to rebuild protective marshes in areas like the Barataria Bay and Breton Sound. Other gulf states that did not have mature state plans in place had to scramble to come up with appropriate projects for Deepwater Horizon settlement funds.

Although states and local governments must develop hazard mitigation plans to receive FEMA funding, they should be encouraged to develop more comprehensive climate resilience plans — and governments with such plans should be prioritized for federal funding. Federal agencies should also provide technical assistance and guidance to help states and communities develop robust plans and design resilience projects that can be implemented quickly in the aftermath of a disaster. Such plans should consider future climate risks and identify strategies for building long-term resilience. Plans also should consider risks to both the natural and built environments and identify ways of preserving and restoring natural assets as a means of reducing risks and enhancing resilience for both people and wildlife. Needless to say, states with robust resilience plans will be better able to quickly deploy scarce resources and deliver more cost-effective projects that generate multiple benefits for vulnerable communities.

The Obama administration’s launch of a $1 billion National Disaster Resilience Competition after Hurricane Sandy provides evidence that supporting state planning and project design efforts can pay dividends. The Rockefeller Foundation brought in a range of experts who trained and helped state and local applicants develop innovative resilience projects that addressed multiple community challenges. In New Orleans, for example, the city is reintegrating nature, using green infrastructure approaches to improve stormwater management, reduce flooding, and create recreational amenities in underserved neighborhoods.

States should be encouraged to leverage other funding sources and take regulatory and incentive-based approaches to complement federal investments. FEMA and other federal agencies should consider using the carrot of federal funding to incentivize state and local governments to adopt proactive approaches. Some states already are putting in place new programs that consolidate disparate funding sources and operational capabilities to focus on resilience priorities. For example, South Carolina recently passed legislation to create an Office of Resilience to coordinate planning activities, and a Resilience Revolving Fund that will combine state and federal resources and support investments in floodplain buyouts and restoration efforts that reduce flood risks in communities. FEMA should use its BRIC program to reward states that put some of their own skin in the important resilience game.

Another important step is to advance nature-based approaches. FEMA and other federal agencies making coastal resilience grants should insist that states propose the deployment of natural infrastructure projects in concert with, or as an alternative to, gray infrastructure. The federal government should explicitly acknowledge and credit the additional benefits that typically accompany such nature-based solutions. By signaling its preference, the feds will encourage states to take such projects seriously.

To achieve this end, we need to remove outdated federal rules that present roadblocks to natural infrastructure approaches. Although FEMA recently changed its policy to allow for the inclusion of ecosystem service benefits in required benefit-cost analyses — with the specific goal of “allow[ing] for easier inclusion of nature-based solutions into risk-based mitigation projects” — that is easier said than done. Ecosystem service benefits are notoriously difficult to monetize. Modelling that is out-of-reach for most applicants is often needed to demonstrate the risk reduction benefits of nature-based projects. Even then, without more aggressive retooling of benefit-cost expectations and discount rates, federal agencies are likely to continue to overvalue the benefits of environmentally harmful short-term solutions like shoreline armoring while not fully accounting for the environmental and social benefits delivered by natural solutions.

One way to address this problem is for FEMA and other federal agencies to fund demonstration projects that test the efficacy of these approaches while providing case examples of monetized ecosystem service benefits, meanwhile overhauling benefit-cost rules that present roadblocks. For example, FEMA could set aside a significant percentage of its mitigation funds for natural infrastructure projects, similar to the green project reserve that requires 20 percent of water infrastructure funding for green stormwater management approaches. This would help demonstrate the effectiveness of these nature-based approaches for reducing flood risks, and also build capacities at all levels of government to design and implement natural infrastructure projects.

When tens of millions are being invested in improving coastal resilience from climate and other impacts, federal funders and local communities alike need to know that taxpayer dollars are being spent wisely. Accordingly, it is important to identify and estimate the social, economic, and environmental benefits that may be associated with various coastal resilience strategies and then to evaluate, over time, whether projects are delivering the expected benefits.

As noted above, this exercise can require the development of sophisticated methodologies that credit the “natural capital” benefits that may accrue from nature-based coastal solutions (such as improved water quality, fishery and avian benefits, blue carbon, etc.), as well as social and economic benefits that may be tied into community preferences and job opportunities. With the assistance of federal scientists, NGOs, academic centers, and grantees, FEMA and other federal agencies need to develop methodologies and metrics that can be used to measure and verify the full range of potential project benefits.

Significant attention also needs to be paid to monitoring project performance. FEMA’s soon-to-be well-funded BRIC program is well-positioned to provide money for the deployment of monitoring protocols for resilience projects. Other federal authorities engaged in approving resilience projects, like HUD, Interior, and NOAA, need to be doing the same. Monitoring data and adaptative management experience must then be made available for agencies at all levels to identify gaps, learn from experience, inform investment and reforms, and establish best practices that can be scaled and replicated.

While the federal government should not use its funding leverage to dictate state decisionmaking, the feds can, and should, use their unique vantage to disseminate information about successes and failures of resilience planning and execution practices all around the United States. This will help planners identify best practices and benchmark their projects.

The federal government can contribute this valuable service by building upon approaches like the U.S. Climate Resilience Toolkit and NOAA’s Digital Coast. The concept would be creating a comprehensive adaptation clearinghouse that catalogues and provides benefit-cost and performance data regarding hundreds of coastal protection (and other climate-related) resilience projects. Such a clearinghouse would include detailed information about projects in an accessible format that would enable users to efficiently gather and test out ideas that have been tried in different jurisdictions. Such a clearinghouse also would facilitate direct contacts with state sponsors and project managers, obviating the frustrating sense that jurisdictions are being left to invent the wheel on their own.

As a helpful step for affected agencies and communities, the feds should augment a climate adaptation clearinghouse with a centralized GIS-based mapping service that pulls together data so that states and other interested governments and individuals can evaluate the vulnerability of their communities as well as explore resources in their regions that can reduce climate-related impacts.

In doing mitigation right, it is vital that communities have a voice in decisionmaking. Failures to meaningfully engage with neighborhoods regarding pre-disaster planning and post-disaster responses have led to disparities in recovery outcomes for low-income communities and communities of color. Research has shown that communities of color often never fully rebound after experiencing impacts from extreme weather and are often left worse off than their White neighbors, who have an easier time accessing aid and receive higher disaster payments.

FEMA and other federal agencies involved in funding hazard mitigation planning have a responsibility to provide the resources that communities need to fully consider socioeconomic vulnerabilities and to direct investments to frontline communities that face the greatest threats from climate impacts. To ensure that marginalized communities have a voice in decisionmaking, agencies should provide sustained funding for community-based organizations that can lead planning processes and support meaningful engagement between government decisionmakers and residents.

Louisiana’s Strategic Adaptations for Future Environments initiative provides an example of this type of effort. LA-SAFE is implementing a range of innovative coastal resilience projects that were selected after an extensive, year-long community engagement process that was co-designed and directed by residents of six coastal parishes that were hard hit by Hurricane Isaac in 2012. These community-driven projects were only made possible because of significant funding from HUD and the support of regional philanthropy and academic and nonprofit partners.

Thus, FEMA’s BRIC program and other federal sponsors should provide funding that will enable underserved communities to participate fully in hazard mitigation planning and implementation activities. More generally, Congress should consider increasing the federal cost share for mitigation and resilience investments in economically underserved communities to ensure that resources are being directed to the most at-risk communities. Economically distressed and tribal communities often struggle to raise the needed match, which limits their ability to leverage federal funds to support important investments. While FEMA mitigation programs offer a 90 percent federal cost share for smaller rural communities, larger economically distressed communities still must raise a 25 percent match. Congress should extend more favorable federal cost share to economically disadvantaged communities of any size.

Siloed decisionmaking at the federal level also is limiting the ability of states and communities to identify and implement holistic projects that comprehensively address community challenges. By helping to coordinate funding, permitting, and environmental reviews, federal agencies can support better projects on faster timelines.

Experience confirms that this can be done. After Hurricane Sandy, technical coordinating teams were established to improve coordination among federal agencies administering disaster relief funds and their state counterparts. These teams helped align funding to support a more comprehensive disaster recovery in affected communities. Teams also were established to coordinate permitting across federal agencies and to work with project leads to help them navigate rules and more quickly advance projects. A similar model is being employed in the San Francisco Bay region to coordinate state and federal permitting agencies and speed implementation of restoration and resilience projects that are being funded through Measure AA — a regional parcel tax that is generating $25 million annually to support investments in ecological restoration around the San Francisco Bay.

State and local governments cannot do this work alone. The private sector — including philanthropy, nonprofits, academia, and businesses — also have important roles to play in supporting and enhancing public-sector efforts to build climate resilience. The federal government should support and encourage the private sector to dedicate resources and talent to collective efforts to address the climate crisis.

The Rockefeller Foundation’s collaboration with HUD and its support for the National Disaster Resilience Competition is one model. Conservation land trusts — like Katy Prairie Conservancy in the Houston region — are also supporting flood resilience initiatives by acquiring flood-prone properties and restoring natural ecosystem functions. And nonprofits like Audubon are working with community-based partners to provide technical support and assistance to help neighborhoods design natural infrastructure that enhances climate resilience for both people and wildlife. For example, Audubon California is working with Shore Up Marin City — a multi-racial environmental coalition in a lower-income community in Marin County — to design and restore tidal wetlands that will reduce flood risks and also provide other environmental and recreational amenities in an underserved community. Federal programs should remove barriers to and create incentives for the private sector to support state and local resilience efforts in these ways.

With significant new resources flowing to efforts to reduce risks before disasters strike, the Biden administration has an important opportunity to ensure that state and local governments have the funding and capacities needed to create effective projects that will meet multiple community needs. By implementing the common-sense approaches above, the Biden administration can ensure that communities have the tools and resources needed to build a better future. TEF

LEAD FEATURE With new funding to reduce risks before calamity strikes, the Biden administration has an opportunity to ensure that state and local governments have the resources and capacities needed for effective mitigation projects that will meet multiple community needs.

World’s Coal Lender of Last Resort Doubles Down as Warming Worsens
Author
Bruce Rich - Environmental Law Institute
Environmental Law Institute
Current Issue
Bruce Rich

In the midst of accelerating global warming, tens of billions of dollars continue to flow from private and public international banks into financing new coal-fired power plants, especially in Asia and Africa. Until recently, Japan has been one of the biggest culprits, accounting in 2019 for over 10 percent of the external financing of new coal plants in developing countries, particularly in South and Southeast Asia — some 24.7 gigawatts.

The nation’s export credit agency, the Japan Bank for International Cooperation, has been a major funder, and so has Tokyo’s bilateral development assistance agency. Over the past year or so, international criticism of Japanese coal funding has grown sharply, encountering nothing less than “opprobrium” at the last conference of the parties to the climate convention, according to the Financial Times. Protests by local nongovernmental groups against Japanese coal projects in Indonesia and Bangladesh have proliferated as well.

In June, a climate shareholder resolution introduced at the annual meeting of Japan’s third-largest bank, Muzuo Fincancial Group, obtained nearly 35 percent of the votes cast. It was backed by major northern European banks and investment funds — something that would have been unthinkable several years ago. Although the resolution did not pass, Muzuo has already agreed to halt approval of new loans for coal-fired plants, although it still has $2.8 billion outstanding in already-approved financing for coal energy.

In July this year, the Japanese environment minister announced that the government will change its public finance policies to drastically limit funding coal in developing nations. South Korea too is jumping on board. It has been a major financer of new coal plants in the developing world, but recently Seoul endorsed its own green new deal, aiming to exit coal financing both domestically and internationally. These changes are coming about in part because Japan and South Korea have relatively transparent public and private financial sectors, where the voices of concerned foreign investors and civil society can be heard.

Unfortunately, the world’s largest financer of coal by far, both at home and abroad, has actually been increasing its coal finance over the past year — and it is not known for transparency. In 2019, China reversed its policy, announced in 2016, of drastically cutting back (by around two thirds) domestic construction of coal-fired plants. As of June, it is committed to adding 249.6 GW of new coal power. That is roughly equal to total installed coal power in the United States. According to Global Energy Monitor and the Center for Research on Energy and Clean Air, “plans for new coal plants have steadily increased since 2019, after the central government began relaxing restrictions on new coal plant development.”

Beijing has become the lender of last resort for coal plants in developing countries, accounting for 70 percent built in the world outside China. Last year 60 coal plants abroad supported by China (over 70 GW worth) were under construction or in planning, nine of which are delayed because of protests or legal opposition, for example in Kenya and Turkey.

In Sub-Saharan Africa, Chinese coal finance dominates, with 13 projects under construction and another nine in planning. In South Africa, Power China is constructing a 3 GW coal plant in Limpopo Province that the South African press and civil society have vehemently criticized. In the words of Business Insider South Africa, the Limpopo coal plant “will only be used by the Chinese,” since it will serve a multi-billion-dollar China-controlled industrial park with seven metallurgical plants.

In Zimbabwe, the Industrial and Commercial Bank of China, and Sinosure (the Chinese export credit insurance agency), approved in May support for the first phase of the $4.2 billion, 2.8 GW Sengwa coal plant complex, including a 250-kilometer pipeline to transport its cooling water all the way from the Kariba Dam reservoir. According to the Japan Times, the reservoir is already seriously depleted by recurrent droughts associated with climate change — the dam’s power turbines are forced to operate at seriously reduced capacity.

China for the past decade has been the world’s largest producer and financer of climate-friendly renewable energy infrastructure, both at home, and abroad. The central government continues to claim its commitment to a greener, cleaner energy path. But the only thing that counts in terms of avoiding a looming global climate disaster will be a much more rapid switch from fossil fuels, particularly coal. Given the scale of China’s global energy footprint, like it or not, our climate fate is literally in China’s hands.

World’s Coal Lender of Last Resort Doubles Down as Warming Worsens.

Get Ready for Corporate Carbon Goals Visible with Every Purchase
Author
Sally R. K. Fisk - Pfizer Inc.
Pfizer Inc.
Current Issue
Issue
5
Sally R. K. Fisk

Imagine picking up a product at the grocery store and checking its label for ingredients, nutrition information, and third-party certifications — when you notice something new. You have already compared the USDA Certified Organic product with 100 calories against its competitor that boasts 90 calories and 70 percent post-consumer recycled packaging. You are about to make your choice. But now imagine the label also tells you the carbon footprint of each product. How will that information inform your purchasing decision? It’s a question you might be soon asking yourself as a few intrepid companies embark on carbon labeling.

Ernst & Young reported in May that, with the exception of healthcare providers, consumers lack trust in all major institutions, with brands and retailers being especially low. EY noted important “possible influences on purchasing behavior” to be “authenticity; honest, clear labeling; and transparent origin or product source.”

To help develop trust, individual and corporate consumers are demanding more disclosure on issues such as climate impact, supply chain, ingredients, conservation of resources, and public stance on key social issues. Carbon labeling can help individuals and businesses understand the impact a product has on global greenhouse gas emissions. This is important information for customers interested in reducing their indirect carbon emissions footprint. Perhaps in recognition of this trend, consumer goods giant Unilever is considering carbon labeling for its 70,000 products.

To date, companies primarily communicate climate and sustainability progress through public goals aimed at enterprise-level reporting — consider Microsoft’s pledge to be carbon negative by 2030. Other leading companies are making similar pledges. These goals are incredibly important, but do not necessarily provide a customer with useful product-specific decisionmaking information. This is particularly true for customers who are trying to reduce their carbon footprint.

Enter carbon labeling. This evolution of corporate environmental impact communications speaks directly to the consumer at the time of purchase and has the potential to drive social improvements through the power of markets, while the law works to catch up.

There are challenges for firms considering applying a carbon label, as the plant-based food companies Oatly and Quorn have already done. Oatly provides the climate footprint of their products in terms of kilograms of carbon dioxide equivalent. But, is this the right measure? Oatly itself points out the problem with this metric is that it doesn’t tell you much unless you have something to compare it with, and for that we need entire industries to adopt a standard methodology.

Carbon labeling raises many questions. What methodology should apply to developing the carbon footprint of a product? Should a label have the amount of carbon dioxide equivalent or just a “climate friendly” certification if the manufacturer meets certain thresholds? How will a customer know what a product’s footprint means? Is there a daily or annual carbon budget each customer will have, much as dieters count calories, or will customers simply make a decision with each purchase by comparing labels and selecting the lower-carbon product? How will the label be verified? And what if competitors develop different approaches to accounting and disclosure (a current challenge across the spectrum of corporate environmental-social-governance reporting)?

Unless governments start regulating this area, as they have done with food nutrition labels at the federal level and California’s Proposition 65 requirements for toxic and carcinogenic ingredient disclosures, application of private governance principles to ensure transparent and verifiable standards will be critical.

In the meantime, there are existing regulations that likely apply. For instance, carbon labeling is a “green claim” and requires meeting the Federal Trade Commission’s rules for products sold in the United States (although the rules do not specifically cover carbon labels), other countries’ laws, and (as good practice) the ISO standard for environmental labels and declarations. While carbon labeling could be messy for a while, as more consumers demand information and companies seek to implement their own standards to meet expectations, order will follow.

I anticipate it will take time before we are comparing products on the basis of carbon labels, but the concept is in motion. However, without a verifiable standard to enable comparison, competitive advantage and environmental benefit could both be hard to prove. Thus, there is a role for rule of law and private environmental governance to establish the transparency consumers are demanding to gain their trust.

Get Ready for Corporate Carbon Goals Visible with Every Purchase