TSCA Reform Deal, Ice Melt Forces Abandonment of Arctic Research Station, Wall Street Journal Editors Attack Tesla, Israel Electric Car Venture Folds (by Bob Percival)

Last week U.S.Senators Frank Lautenberg (D-N.J.) and David Vitter (R-La) announced that they had reached agreement on the Chemical Safety Improvement Act of 2103, bipartisan legislation to update the Toxic Substances Control Act (TSCA).  TSCA was enacted in 1976 and it has not been comprehensively overhauled since then.  The legislation is widely viewed as outdated in light of the EU’s REACH program that requires comprehensive testing of chemicals, which TSCA does not. Industry groups, including DuPont, expressed support for the proposed legislation which reportedly would give EPA more authority to review existing chemicals and to require new chemicals to be tested. EPA would evaluate all chemicals on the market as either a "high" or "low" priority based on risk analysis and high-priority chemicals would be subjected to further action. Environmental groups were cautious about endorsing the legislation, noting that it lacked deadlines and funding for EPA and that it was not as strong as the Safe Chemicals Act that Lautenberg had introduced last month. Serious concerns also have been raised about provisions in the legislation that would preempt state regulation of chemicals.

Russian scientists announced on May 24 that they have been forced to evacuate North Pole-40, an Arctic research station collecting climate data, because the ice it is built on is starting to break up unexpectedly early.  Last September Arctic sea ice reached its lowest extent on record, 18 percent below the previous minimum that had been reached in 2007. Older and more durable sea ice, on which the station was built, has been shrinking.  It made up 26% of the ice cover in March 1988, but only 7% in March 2012.

On Friday May 24 the editorial board of the Wall Street Journal weighed in on the amazing success story of an American start-up company that has developed new technology vaulting it to the forefront of its industry.  The company has been so successful that its stock price is now nearly six times higher than it was at its initial public offering less than three years ago.  On May 8 the company reported that it had earned its first profit and on May 22 the company repaid in full its $465 million loan from the federal government nine years before it was due.  One would think that this American business success story would be cause for celebration by the Journal, but not so fast.  The company is California-based Tesla Motors, which produces the all-electric Tesla S high performance automobile that I have been driving for the last two and a half weeks.  

The editorial, “The Other Government Motors,” Wall St. J., May 24, 2013, at A12, portrays Tesla as an invention of government subsidies that is destined to fail.  While the editorial notes that Tesla’s cars have received “rave reviews,” it does not specify that the Tesla S was named Motor Trend’s “Car of the Year” or that Consumer Reports declared earlier this month that it is simply the finest car they have tested in many years.  It describes Tesla’s profits as “a function of government subsidy and coercion” because buyers qualify for the $7,500 federal tax credit for purchasing  electric vehicles and Tesla can collect $250 million in zero emission vehicle credits from other automakers subject to California’s clean-car mandates.  The editorial repeats Bjorn Lomborg’s canard that the environmental benefits of electric cars are overstated, but its most revealing criticism is that Tesla has made tons of money for rich liberal investors, many of whom it lists by name.  It warns that Tesla’s success may be short-lived because major auto makers soon will have their own electric cars and will not need to buy emissions credits from Tesla, something Tesla already has factored into its financial projections.  What seems to irk the Journal so much is simply that the success of Tesla’s technology sharply contradicts the right-wing narrative that green technology is destined to fail in the marketplace.  How did Wall Street react to the editorial? On Friday Tesla’s stock rose more than $4/share hitting a new all-time high and closing above $97/share.  Not bad for a company whose stock debuted at $17/share in its June 2010 IPO.

This is not to say that all green technology ventures will be winners in the marketplace; many likely will fail, particularly since we do not have a carbon tax that would internalize the true costs of using fossil fuels.  On May 26 Better Place, a company that five years ago announced plans to turn Israel into a mecca for electric cars through quick-service battery-swapping stations, announced that it had filed for liquidation.  Approximately $850 million had been invested in the company, which initially forecast that 100,000 electric cars would be on the road by 2010.  Today there are estimated to be fewer than 1,000 electric cars on the road in Israel.  The failure of this venture and Fisker’s problems seem to stem from lack of public enthusiasm for their technology -- something that has not been a problem for Tesla -- making it all the more curious that Tesla would be singled out for attack by the Journal’s editors.  

On Saturday May 25 the  Wall Street Journal editors were decrying the lack of accountability in China’s legal system that has produced weak enforcement of Chinese environmental laws, citing the discovery of cadmium contamination in Chinese rice. China’s Toxic Rice Bowl, Wall St. J., May 25-26, 2013, at A12.  The editorial also decried “American elites who like to praise China’s government as a green model.”  At the risk of being considered one of those, I should point out that on May 24 the Chinese government sent a draft of a proposed Environmental Protection Tax Law to industry associations for their review.  The proposed law would establish a carbon tax while raising the level of other existing pollution charges in China.  The Journal editors are correct that it is important to have strong accountability mechanisms to ensure enforcement of the environmental law, like the citizen suit provisions of the U.S. environmental laws, something that they have not been a fan of when used in the U.S.

Arctic Council, BLM Fracking Regs, Chinese Refinery Protests, Indonesian Logging Ban, Tesla Road Trip (by Bob Percival)

On Wednesday May 15 the eight nations that are members of the Arctic Council (Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden and the United States) agreed to grant observer status to six other nations -- China, India, Italy, Japan, Singapore and South Korea.  The strong interest in the Arctic Council is a reflection of the growing interest in exploiting resources there as climate change renders the polar ice cap less of an obstacle to development.  The Council, which had been largely a symbolic organization when created in 1996, has now begun to play an important role in coordinating regulation of resource extraction in the Arctic.  Meeting in Sweden’s northernmost city of Kiruna, the Council reached a legally-binding agreement on preventing and responding to spills of oil and gas in Arctic regions. Steven Lee Myers, Arctic Council Adds 6 Nations as Observer States, Including China, N.Y. Times, May 15, 2013.

On Friday May 17 the U.S. Bureau of Land Management proposed regulations to control the use of hydraulic fracturing on 700 million acres of federal land and 56 million acres of tribal land.  Most of the estimated 13,000 wells on which fracking occurs are on private land, where regulation is left to the states, but the proposed federal rules will apply to the approximately 3,000 fracking wells that are located on federal land.  The proposed rules are somewhat weaker than environmentalists had hoped.  They require disclosure of the contents of fracking fluids only after drilling has been completed.  Industry groups criticized the rules by arguing that the federal government should not regulate fracking.

On May 16 hundred of residents of Kunming, China took to the streets to protest plans by China National Petroleum Co. to build a chemical plant to produce the chemical paraxylene (PX) from crude oil piped in from Myanmar.  Kunming’s mayor Li Wenrong met with the protesters and opened an online account on Sina Weibo to hear public opinion.  Approximately 4,000 comments from the public were posted online.  Li Chengpeng, a prominent Chinese social critic, has helped encourage the demonstrations, which are part of a growing trend by China’s middle class to oppose projects that may increase pollution in their neighborhoods. Brian Spegele, Behind Chinese Protests, Growing Dismay at Pollution, Wall St. J., May 18-19.  The protesters are not opposed to building the plant per se. They simply argue that it should be relocated to a less populated area and be subjected to advance environmental review. 

On May 15 the government of Indonesia announced that it was extending for two years its moratorium on logging virgin forests. The moratorium initially was imposed two years ago as part of a $1 billion conservation plan arranged with the government of Norway.  Some industry groups criticized the extension as prolonging a measure that hurt the Indonesian economy. Greenpeace argued that the Indonesian government should have gone further and strengthened the existing moratorium. 

On May 17 the University of Maryland Carey School of Law graduation ceremonies were held for  300 students in the Class of 2013. U.S. Senator Ben Cardin was the commencement speaker.  On May 16 the University of Maryland Environmental Law Program hosted a party in honor of the 24 students in the graduating class who qualified for the certificate of concentration in Environmental Law.

On Saturday my son and I made our first road trip in my new all-electric Tesla S.  We traveled to Atlantic City where we attended the Lamont Peterson/Lucas Mathysse boxing match at Boardwalk Hall.  We had no problem recharging the car during the 400-mile roundtrip, stopping at Tesla’s supercharger at the Delaware Welcome Center in Newark, Delaware.  In 45 minutes the car was fully charged.  While attending the fight, which was won by Argentinian Matthysse on a third-round knockout, we charged the car at a nearby municipal parking lot.  On the return trip today it took only 25 minutes to recharge at the Delaware supercharger.  I’ve now driven 900 miles in the ten days that I’ve had the car with absolutely no problems.

Nanjing Conference, Global CO2 Levels Hit 400ppm, Chinese Enforcement & Tesla Delivery (by Bob Percival)

On Monday and Tuesday May 6-7, I participated in a conference on “The Performance of Environmental Governance Systems: Comparing America and China.”  The conference was co-sponsored by the School of the Environment at Nanjing University and the Bren School of Environmental Science and Management at the University of California Santa Barbara.  The conference website is located at: http://hjxy.nju.edu.cn/en_wbe/news%5Cpegs%5Cpegs.htm. On Monday afternoon Professor Zhao Huiyu of Shanghai Jiaotong University Law School and I jointly presented our paper on “The Role of Civil Society in Environmental Governance.”  The paper compares how civil society influences the adoption, implementation and enforcement of environmental standards in China and the United States.  We argue that while it may be easier to pass environmental legislation in China, it may be harder to enforce such laws because they are not the product of hard-fought compromises with the regulated community.  The three types of NGOs in China - officially endorsed NGOs, international NGOs, and grassroots NGOs -- are playing an increasing role in Chinese environmental policy, though their greatest successes appear to be through transparency initiatives rather than litigation.  This may reflect the more limited opportunities open to NGOs in China compared to the U.S.

There were several excellent presentations at the conference by prominent political scientists and environmental lawyers from China and the U.S. A major conference theme was an effort to discern which environmental initiatives had worked best and why.  One of the most interesting commentaries was by China University of Political Science & Law Professor Wang Canfa who has been asked to help draft climate change legislation for the National People’s Congress.  The Chinese bureaucracy is pushing back against this project from several quarters with arguments questioning why China should control its greenhouse gas (GHG) emissions when it is not legally required to do so by any international agreement.  The answer to this question is because China’s GHG emissions are the highest in the world and still increasing rapidly.  Although U.S. GHG emissions remain much higher than China’s on a per capita basis, China’s per capita emissions have been increasing to the point where they now are approaching those of the European Union.

These emission increases are a major reason why scientists discovered on May 10 that concentrations of carbon dioxide in the atmosphere have passed 400 parts per million (ppm) for the first time since the Pliocene Epoch several millions of years ago.  This discovery was made by scientists at Hawaii’s Mauna Loa observatory.  The 400 ppm level is a dramatic increase from the level of 316 ppm measured at Mauna Loa in 1958.  At the dawn of the industrial revolution in the 1700s, it is estimated that global CO2 levels were approximately 260 ppm.  The last time levels of CO2 were above 400 ppm is believed to be in the Pliocene Epoch when the earth was 5 to 7 degrees warmer than today and sea levels tens of feet higher. Brian Vastag & Jason Samenow, Carbon Dioxide Levels Hit Troubling Milestone, Scientists Say, Wash. Post, May 10, 2013.  The group 350.org has been campaigning for measures that would dramatically reduce GHG emissions in order to reduce CO2 levels in the atmosphere to 350 ppm.

During my trip to China much of the discussion focused on whether the recent horrendous environmental conditions experienced there would force the Chinese government to strengthen environmental regulation in some dramatic fashion.  Yet the larger problem seems to be simply enforcing existing laws, as illustrated by an article in this morning’s Washington Post.   Steven Mufson, In China, Pollution Resists Change, Wash. Post, May 12, 2013, at A12.  The article reports that Huadian, one of China’s largest power companies, turned off the scrubbers at its Datong coal-fired power plants allowing its emissions of SO2 to soar to four times above legal limits.  It then falsified paperwork in order to be able to sell its electricity at higher rates given to plants with lower emissions.  While 80% of China’s coal-fired power plants have scrubbers, China continues to add one coal-fired power plant per week and the scrubbers are not always used.  Huaneng, another Chinese electric producer, was fined $13,000 for turning off its scrubbers in February 2012, but the fine did not recoup the economic benefit of the violation, which was repeated last November. In the U.S. intentional violations of the Clean Air Act would result in criminal prosecutions, but at present there is little prospect of such strict enforcement in China.  

After the Nanjing conference concluded on May 7, I took a very comfortable high-speed train from Nanjing to Shanghai.  On the morning of May 8 I presented a lecture on the law and politics of environmental protection to students in Professor Zhao’s class at Shanghai Jiaotong University Law School.  The students asked some terrific questions about China’s environmental prospects, U.S. public opinion about the environment, the constitutional basis for U.S. environmental regulation, and other matters.  It always is a great pleasure for me to be able to engage directly with Chinese law students who hopefully will one day be directly influencing their country’s policies.  After the lecture I flew from Shanghai to Beijing to catch my return flight to the U.S.

I returned to the U.S. from China on the evening of May 8.  On Thursday May 9 I took delivery of my new all-electric, Tesla S Performance car at Tesla’s Rockville Service Center.  Tesla’s service rep showed me the car’s cool features and we downloaded Tesla’s iPhone app that lets me remotely monitor the car’s charging status and location. I then drove the car from Rockville to Baltimore and plugged it in at one of the University of Maryland’s electric vehicle (EV) charging stations.  I have now driven my Tesla nearly 200 miles and it is truly amazing.  It is hard to believe that an automobile can have such incredible performance capabilities.  The car became a traffic stopper on Saturday as I drove to Nationals Stadium in D.C.  A policeman directing traffic started to wave me along and then suddenly stopped me in the middle of an intersection to ask about the car.  Next weekend I will take my Tesla on its first trip outside of the Baltimore/Washington area when my son and I go to Atlantic City to see the welterweight championship boxing match between Lamont Peterson and Lucas Matthysse.  In July when I teach the Comparative China/U.S. Environmental Law course at Vermont Law School (VLS), I am hoping to drive my Tesla to South Royalton since VLS has its own EV charging station.

Delayed May 4th Blog Post: China Trip, Is China Really a Green Leader? BP Spill

I posted this on my parallel blog at www.globalenvironmentallaw.com on May 4th.  I was unable to post on blogspot because I was in mainland China where the site is blocked.  Here is the post: I have been in China during the last week.  I left D.C. last Sunday, arriving in Beijing on Monday afternoon.  On Monday night I had a wonderful dinner in downtown Beijing with my former student Huang Jing and her new husband.  I then spent three days in Hong Kong.  It is always refreshing to read the Hong Kong press, which is not subject to the same censorship as the mainland media.  A dock workers’s strike in Hong Kong and Wednesday’s May 1 celebration of International Labor Day, drew considerable commentary about the abysmal state of worker’s rights in Hong Kong. 

Tom Holland, a columnist for the South China Morning Post wrote a column challenging recent reports by Australia’s Climate Commission and the Pew Charitable Trusts that had lauded China as a green energy leader.  Holland does not dispute that China now has 152 gigawatts of renewable energy capacity, more than the U.S.’s 133 gigawatts and the EU’s 128 gigawatts.  But, he notes, China’s emissions of greenhouse gases are “climbing at a truly spectacular rate.” Tom Holland, China a Green Leader? Don’t Make Me Laugh, South China Morning Post, May 1, 2013, at B8.  In 2011 China’s carbon dioxide emissions rose by 820 million tons, more than total emissions that year by Germany and Romania combined. Holland notes that during the first three months of 2013, coal-fired power plants were the source of 81% of China’s electricity generation, followed by hydropower (11%), natural gas (4%), wind energy (2%) and nuclear (2%).

The reason for my trip to China is to present a paper on “The Role of Civil Society in Environmental Governance in the United States and China” at a conference on comparative environmental governance at the University of Nanjing. I have co-authored the paper with Professor Zhao Huiyu from Shanghai Jiaotong University School of Law.  Civil society in China has been very active in protesting environmental conditions and opposing the siting of chemical plants.  The Hong Kong press reported that provincial authorities in Chengdu, capital of Sichuan province, have temporarily halted a controversial $6 billion PetroChina chemical plant project in Pengzhou because of concerns over its proximity to an earthquake fault.  On April 25 a 33-year old Chinese woman posted on a microblog a call for demonstration on April 27 to oppose the plant, a protest she said had been approved by the authorities. The following day she was arrested by local authorities and her blog post was removed, generating considerable public anger. Patrick Boehler, Chengdu Halts Plant Work Amid Quake Fears, South China Morning Post, May 1, 2013, at A6.

While waiting to fly to Shanghai on May 3 I was able to watch part of the Washington Nationals/Atlanta Braves baseball game in high definition on my laptop due to the superb free wifi in the Hong Kong airport.  On Friday night I had dinner in Shanghai with my co-author Professor Zhao, who is one of the very top environmental law scholars in China.  Tomorrow we will be traveling by train to Nanjing for the conference.

Other environmental news items from China include the following.  The Guangzhou Daily reported that beginning next month water quality reports for 50 rivers in China will be posted online on a monthly basis.  Guangzhou officials also announced plans to build three waste treatment facilities to enable the city to treat 94 percent of its sewage.  A construction site in the Pudong area of Shanghai is under investigation for illegally discharging polluted wastewater into a stream that turned the stream black and resulted in a fish kill.  Residents posted pictures of the polluted water online, which helped spur the investigation.  The Fujian provincial government announced that it had ordered 392 mineral mines to shut down by 2015 because of safety and environmental concerns.  Not all of the mines were not found to be violating existing regulations, but they all were deemed to be using substandard safety technology and some were found to be causing pollution of soil and rivers.

In a financial report last week BP revealed that as of March 6 it was facing 2,200 lawsuits over its 2010 Deepwater Horizon oil spill.  As the deadline for avoiding a three-year statute of limitations approaches, BP expects to face more lawsuits.  BP disclosed that it increased the amount it set aside to pay for claims by private parties pursuant to a settlement it reached last year from $7.8 billion to $8.2 billion. Guy Chazan, BP Hit by Flood of Fresh Lawsuits As Gulf Disaster Claims Deadline Nears, Financial Times, May 1, 2013, at 11.  The oil services company Halliburton had revealed the previous week that it increased its reserve to settle Deepwater Horizon claims from $363 million to $1 billion, perhaps a reflection that it has not fared well in the trial that commenced in federal court in New Orleans in February.

A report published last week by the group Climate Central estimates that Hurricane Sandy resulted in nearly 11 billion gallons of raw sewage being released into U.S. waters in October 2012.  Storm surges, heavy rain, and electrical outages caused by the storm overwhelmed sewage collection and treatment systems, causing the releases.  The report illustrates a serious infrastructure problem.  As sea levels rise due to climate change, sewage systems in coastal areas are at increasing risk of being overwhelmed by storms.  A copy of the report, Sewage Overflows from Hurricane Sandy, is available online at: http://www.climatecentral.org/pdfs/Sewage.pdf

Tesla now has a dealership in Hong Kong and there are a fair number of electric vehicle charging stations in the city.   I will be taking delivery of my all-electric Tesla car on May 9, the day after

I return from China.

Parallel Blogs and the "Great Firewall of China"

The reason I run parallel blogs at this site and at www.globalenvironmentallaw.com is because sometimes one site or the other is blocked when I am on the Chinese mainland due to the government's "Great Firewall of China."  Earlier this week when I was having dinner with friends in Beijing one complained that she cannot view my website from China.  She was referring to this site because apparently blogspot is currently blocked on the mainland.  I told her to use www.globalenvironmentallaw.com instead, which is not currently blocked.  I am currently in Hong Kong, which is outside the government firewall so I am able to make this post.  But I am flying to Shanghai later today and I will be in China until Wednesday May 8.  If you do not see my regular Sunday post this week, go to my parallel site at www.globalenvironmentallaw.com, which I am confident I will be able to use even when I am inside the Chinese firewall.