Auto Standards, Cap & Trade Bill, Tobacco Decision & Schroeder Nomination

This was an exciting week of developments pertaining to U.S. efforts to reduce emissions of greenhouse gases (GHGs). On Tuesday, President Obama announced an historic agreement with automakers and the state of California to increase U.S. fuel economy standards for motor vehicles to 35.5 miles per gallon in 2016. Under the agreement, average fuel economy will be required to increase by 5 percent per year from 2012 to 2016. This accelerates an increase in the standards mandated by Congress in 2007 when it required that they be raised to 35 miles per gallon by the year 2020. The automakers benefit by being able to comply with a single, national standard, rather than separate standards mandated by the U.S. Department of Transportation and by California and states that adopt the California standards. Given the federal government’s heavy involvement in efforts to revive the auto industry, it is not surprising that the White House would be able to get automakers to agree to such a deal. Because motor vehicles account for 17% of U.S. emissions of GHGs, the agreement gives a significant boost to efforts to control these emissions. However, under the agreement, U.S. fuel efficiency standards still will not be as stringent as those in the EU or China. Moreover, as some commentators were quick to point out, in the absence of any increase in the price of gasoline, the emissions savings from an improvement in fuel economy will be partially offset by increased driving since it will cheaper to drive cars that burn less gasoline per mile.

After lengthy and intense debate, on Thursday the House Energy and Commerce Committee approved H.R. 2454, a bill that would create a comprehensive cap and trade program to control U.S. emissions of GHGs. The American Clean Energy and Security Act would require that U.S. emissions of GHGs be reduced by 17% below 2005 levels by the year 2020, by 42% by the year 2030 and by 83% reduction by 2050. The legislation would require electric utilities to generate 15% of their electricity from renewable energy sources by the year 2020. The 946-page bill was approved by a vote of 33 to 25 with all but four Democrats on the committee in favor of the bill and all Republicans opposed except for Mary Bono Mack of California. Despite President Obama’s initial insistence that allowances to emit GHGs be auctioned off, the bill would give away more 85% of the initial allowances to electric utilities, energy-intensive trade-exposed industries, and others, a compromise necessary to reduce political opposition to the legislation. Amendments to suspend the program until China or India agreed to control their GHG emissions were defeated, but provisions to require annual reporting on these countries efforts to control their GHGs were adopted.

Almost forgotten in the news last week was the report by U.S. Energy Information Administration that U.S. emissions of carbon dioxide from the use of fossil fuel declined by 2.8% in 2008, the largest reduction in more than 20 years. This occurred despite a 1% increase in economic growth. It largely, but not entirely, reflects the response to high fuel prices last summer and the slowdown in global economic activity. We can probably expect similar or greater reductions this year due to intensification of the global economic slowdown.

On Friday the U.S. Court of Appeals for the D.C. Circuit surprised many people by upholding a landmark 2006 ruling that tobacco companies violated federal racketeering laws in a scheme to deceive the public about the dangers of smoking. While the court affirmed the lower court’s decision that the companies could not be forced to disgorge $280 billion in profits, it held that nine companies and two trade associations “knew about the negative health consequences of smoking, the addictiveness and manipulation of nicotine, the harmfulness of secondhand smoke, and the concept of smoker compensation, which makes light cigarettes no less harmful then regular cigarettes and possibly more.” The court upheld the trial court’s ban on promotion of “light” or “low tar” cigarettes and its requirement that the companies make corrective public statements about the addictiveness and dangers of smoking.

On Tuesday, President Obama announced that he was nominating Chris Schroeder, the Charles Murphy F. Professor of Law and Public Policy Studies at Duke University School of Law, to head the Office of Legal Policy (OLP) at the U.S. Department of Justice. While OLP often has functioned in the shadow of Justice’s Office of Legal Counsel (OLC), where Chris worked during the Clinton administration, it has important responsibilities for legislation and judicial nominations, issues on which Chris is is eminently qualified given his past service as chief counsel for the Senate Judiciary Committee. Chris is one of the co-authors of my environmental law casebook and we currently are finishing a new sixth edition that will be published this summer.

I am currently in Vancouver where I will be teaching a two-week short course on Comparative Environmental Justice on the campus of the University of British Columbia as part of Southwestern University School of Law’s summer program. In order to enter Canada on Saturday I was required by Canadian Customs to obtain a work permit, which significantly delayed my entry. I am living in a wonderful apartment in the Aquarius complex in the Yaletown neighborhood of downtown Vancouver adjacent to a marina on False Creek.