Gloom in Durban, Bali Montreal Protocol COP, Fracking Contracts, Supreme Court RCRA Case, Lovins Workshop (by Bob Percival)

After a week of meetings in Durban, South Africa, the Conference of the Parties to the UN Framework Convention on Climate Change (COP-17) remains sharply divided on most major issues, including how to fund the Green Climate Fund to provide financial assistance to developing countries and whether a global post-Kyoto treaty should be adopted. Some critics have begun to refer to the COP as the “Conference of Polluters”. There were a few positive developments with the Chinese delegation for the first time indicating that it eventually might support global limits on greenhouse gas emissions in a treaty to be negotiated by 2020. The International Chamber for Shipping, representing 80% of the world’s merchant marine, joined Oxfam and WWF to support a carbon tax on emissions from ships. COP-17 is scheduled to conclude on Friday and, as usually happens, it is likely that the most significant developments will occur in the waning hours of the meetings.

In a belated bit of news, the Bali meeting of the parties to the Montreal Protocol on Substances that Deplete the Ozone Layer on November 21-25 failed to adopt a proposal backed by the U.S. for a 30-year phaseout of hydrofluorocarbons that are potent greenhouse gases. India, China and Brazil led opposition to the proposal, which had been supported by a significant majority of the participating parties. It is now widely appreciated that the Montreal Protocol, while directed to protecting the ozone layer, also has reduced greenhouse gas emissions by even more than the reductions required by the Kyoto Protocol.

Last week the New York Times ran a major story reporting that many owners of properties that have been leased for hydraulic fracturing (“fracking”) to extract natural gas have misunderstood the contractual terms of the leases. Ian Urbina & Jo Craven McGinty, Learning Too Late of Perils in Gas Well Leases, N.Y. Times, Dec. 2, 2011, at A1. The companies generally do not describe the environmental risks to the property owners and most of the contracts do not require the companies to provide compensation for environmental damage. At least two-thirds of the leases allow the companies unilaterally to extend the lease term. This article could provide terrific material for law students to study in a first-year Contracts course.

The U.S.-based battery maker Johnson Controls reported last week that its Shanghai factory has been cleared to resume production after a temporary shutdown to investigate lead pollution near the plant. James T. Areddy, Battery Maker Is Cleared in Shanghai Lead Probe, Wall St. J., Dec. 1, 2011, at B4. As reported in this blog on September 18, 2011, the plant had been shut down by Chinese authorities after the discovery of severe lead poisoning in children living nearby.

On November 28 the U.S. Supreme Court announced that it had agreed to review a case challenging the amount of a fine imposed on a corporation for illegally storing hazardous mercury waste in violation of the Resource Conservation and Recovery Act (RCRA). The Court’s motivation for taking the case over the opposition of the federal government may be a desire to clarify the limits of its 2005 opinion in Apprendi v. United States holding that enhanced sentences could not be imposed based on certain factual findings not proven before a jury. In the case before the Court -- Southern Union Co. v. United States, No. 11-94 -- the company claims that it should have been fined only $50,000 for a single incident of illegally storing waste, rather than the $18 million penalty imposed based on daily penalties for more than 2 years of illegal storage.

I have spent the last few days in one of the most beautiful parts of the world at a wonderful workshop on “The Tao of Global and Personal Ecology” with Amory Lovins and Chungliang Huang. The workshop was held at California’s Esalen Institute, which is located atop cliffs overlooking the Pacific Ocean near Big Sur. Lovins discussed his Rocky Mountain Institute’s new book “Reinventing Fire: Bold Business Solutions for the New Energy Era” which outlines a program for greening the four energy-intensive sectors of the economy: transportation, buildings, industry and electricity. See http://rmi.org/ReinventingFire. I was impressed with Lovins’s relentless optimism (“I don’t do problems, I only do solutions”) and his emphasis that the transition to a green economy could be accomplished not by emphasizing government intervention, but rather by convincing business leaders that it would be profitable. Lovins has been advising business leaders and the U.S. military on how to transform their use of energy. He and Chungliang Huang have been doing work in China where Lovins’s book “Natural Capitalism” was embraced by the Chinese leadership in part because of the many positive ways the title’s Chinese translation resonated with them. By contrast, I have long been told that the title of Al Gore’s “An Inconvenient Truth” did not translate well into Chinese, making it far less popular there.