The Climate Report - Summer 2017
U.S Regulatory Developments
In response to the federal government's notice that it intends to withdraw from the Paris climate change agreement, an assortment of local and state governments have expressed an intent to take action independently, consistent with the agreement's objectives. As a result, companies could face a patchwork of local and regional climate-related obligations. California lawmakers have passed legislation extending the state's greenhouse gas cap-and-trade program through 2030, when the state aims to have reduced emissions to 40 percent below 1990 levels. The legislation also tightens the availability of free allowances and the use of emission offsets.
Climate Change Issues for Management
The Financial Stability Board, which promotes global financial stability by coordinating regulatory, supervisory, and other financial sector policies, published the findings of its Task Force on Climate-Related Financial Disclosures, detailing voluntary guidelines for climate-related financial risk disclosures. The effect of global free trade agreements on climate change is not settled, but the United States may find it difficult to renegotiate existing trade agreements unless it agrees to include climate-related provisions. A coalition of corporations, state and local government leaders, and universities have formed "We Are Still In" to promote voluntary climate-related action in the wake of the United States' withdrawal from the Paris agreement.
Climate Change Litigation
After a federal district court in Oregon had set a trial date in a lawsuit brought by a group of children against the federal government for failure to prevent the effects of climate change, the U.S. Court of Appeals for the Ninth Circuit stayed the case while the appellate court considered the federal government's writ of mandamus seeking dismissal of the claims. The Fourth Circuit reversed the decision of a West Virginia district court that U.S. EPA had failed to satisfy a statutory duty to assess the effects of its air regulations on coal-related employment. The D.C. Circuit held that U.S. EPA lacked authority to unilaterally stay the effectiveness of an Obama Administration rule regulating methane emissions from the oil and gas industry.
Climate Change Regulation Beyond the U.S.
In response to the United States' announced intention to withdraw from the Paris agreement, China has seized the opportunity to seek a leadership role the international effort to fight climate change. China is poised to launch the world's largest greenhouse gas emissions trading program in 2017, and it could be home to more than one-third of the world's solar panel and onshore wind capacity by 2021. Laurent Fabius, President of the French Constitutional Supreme Court and former President of the Paris Climate Change Conference, has launched the "Global Pact for the Environment," which seeks to establish core principles of environmental law in an international treaty that could be enforced by national courts.
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