Insights

The Climate Report

The Climate Report

Read the Climate Report Winter 2017.

Initially...

In contrast to the near certainty that the Obama Administration's signature Clean Power Plan will never be implemented, the best advice regarding the Trump Administration's expected policy on climate change is to "wait and see." After campaign statements that seemed unequivocally dismissive of government action to address climate change, recent statements by those members of the new Cabinet whose job descriptions most directly touch the issue, and by President Trump himself, suggest the new Administration's policies may be informed more by aversion to the perceived economic burdens of climate change regulation than by philosophical hostility to the underlying goals of such regulation.

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U.S. Regulatory Developments

As Oklahoma's Attorney General, new U.S. Environmental Protection Agency Administrator Scott Pruitt joined with officials of other states to challenge EPA regulations, including the Clean Power Plan, that he believed exceeded EPA's legal authority. It remains to be seen how he will refocus the Agency's approach to the issue of climate change. California air regulators have released the 2017 Climate Change Scoping Plan Update, which proposes significant changes to the state's greenhouse gas cap and trade program, new efficiency standards for petroleum refineries, and plans to reduce emissions from the transportation sector.

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Climate Change Issues for Management

Finance Ministers and Central Bank Governors of the G20 have asked the Financial Stability Board, an international body that monitors and makes recommendations about the global financial system, to review how the financial sector can account for climate-related risks and opportunities, with attention to corporate governance, planning, risk management, and targets. Eighty-four companies have joined RE100, which describes itself as "a collaborative, global initiative of influential businesses committed to 100% renewable electricity, working to massively increase demand for—and delivery of—renewable energy."

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Renewable Energy and Carbon Markets

President Trump is filling key energy regulatory positions, nominating former Texas Governor Rick Perry to be Secretary of Energy, appointing Federal Energy Regulatory Commissioner Cheryl LaFleur as the acting FERC Chair, and naming Nuclear Regulatory Commissioner Kristine Svinicki as the new NRC Chair. To incentivize utilities not to retire nuclear power plants whose operating costs exceed those of carbon-emitting fossil fuel plants, New York and Illinois enacted "zero-emissions credit" requirements, based on the model of existing renewable energy credit programs. However, New York electricity providers required to purchase such credits are asserting that such programs are preempted federal regulation of the wholesale energy market.

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Climate Change Litigation

An Oregon district court declined to dismiss a lawsuit filed against the U.S. government by a group of children, ages 8 to 19, alleging that governmental action and inaction results in carbon pollution of the atmosphere, climate destabilization, and ocean acidification, in violation of plaintiffs' constitutional rights, including substantive due process rights, and the public trust doctrine. The U.S. Court of Appeals for the Ninth Circuit has, for the second time, reversed an Alaska district court decision overturning a endangered species listing based on the projected habitat impacts of climate change, and a third such case is in the appellate pipeline.

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Climate Change Regulation Beyond the U.S.

Recent French legislation has strengthened the powers of the country's Financial Markets Authority to investigate and regulate the greenhouse gas emissions allowance market. To mixed reviews, the European Commission has released a set of legislative proposals designed to put energy efficiency first, achieve global leadership in renewable energy, and provide a fair deal for consumers. China is launching a national cap and trade program addressing greenhouse gas emissions from eight major industrial sectors. The program will regulate twice the emissions of the European Union's ETS and create a carbon market larger than all existing markets combined.

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