States Ask Supreme Court to Stay CPP, Hungarian Court Acquits Defendants in 2010 Sludge Spill, EPI Released, China's Petroleum Price Stabilization Tax (by Bob Percival)

On January 26th, 25 states and four state environmental agencies asked Chief Justice John Roberts to issue a stay of EPA’s Clean Power Plan while the U.S. Court of Appeals for the D.C. Circuit considers their legal challenges to it.  On January 21 the D.C. Circuit denied the states’ request for a stay.  The Chief Justice asked EPA to file a response to the motion by Thursday February 4 at 3pm. Sixty electric utilities filed a separate stay application with the Chief Justice, who handles emergency requests originating in the D.C. Circuit.  When it denied the stay request, the D.C. Circuit agreed to expedite its consideration of the legal challenges and scheduled oral argument for June 2.

Last week a court in Veszprem, Hungary acquitted 15 employees of a Hungarian aluminum company that owned a dam that collapsed in 2010, spilling toxic sludge into the Tisza River and killing 10 people. The court found that the collapse of the reservoir wall could not have been foreseen by the defendants because it was caused by “loss of stability originating in the subsoil.” Greenpeace condemned the verdict, which resolves all criminal charges brought in the wake of the spill, including reckless endangerment and violations of waste management regulations.  Civil suits still remain against the company.  Hungary’s governing Fidesz party and opposition parties condemned the verdicts and urged prosecutors to appeal them.

At the World Economic Forum in Davos, Switzerland, Yale University released its 2016 Environmental Performance Index (EPI), which seeks to rank countries on how well they protect the environment.   The report found overall improvements in reducing the health impacts of pollution and improving access to drinking water and sanitation, but “troubling declines” in global fisheries and air quality.  Finland topped the list, while the United States ranked #26, China #109, and India #141.  A copy of the report is available online at: http://issuu.com/2016yaleepi/docs/epi2016_final/1?e=23270481/32968129

Several media outlets have been questioning whether the plunge in global oil prices will undercut the pledges to reduce greenhouse gas emissions made in Paris last December.  Several countries have taken advantage of the oil price decline by reducing or eliminating energy subsidies.  The New York Times reports that China has adopted what appears to be the most progressive policy of all by essentially adopting a petroleum price stabilization tax, a measure I have long recommended.  China has placed a floor under the price of gasoline and diesel as though the world price of oil still was at $40 a barrel. The extra profits from this price floor go to a fund to finance energy conservation and pollution control. Clifford Krauss & Diane Cardwell, Climate Deal’s First Big Hurdle: The Draw of Cheap Oil, N.Y. Times, Jan. 25, 2016.  Professor Zhao Huiyu of Shanghai Jiatong University notes that the Ministry of Finance’s State Administration of Taxation has issued a series of decrees to implement the new policy whose purpose is described by them as “to promote environmental governance, energy conservation, and emission reduction.”

On Wednesday January 27 Commander Mark P. Nevitt and I gave a luncheon talk to the Maryland faculty on “Polar Opposites: Should Arctic Environmental Governance Follow the Antarctic Model?” Mark, who formerly was the regional counsel responsible for environmental compliance by the U.S. Navy in the Mid-Atlantic region, now is a Pentagon official.  We presented the preliminary results of our research, which will become a law review article, comparing environmental protection of Antarctica with the Arctic model.  The Antarctic Treaty, which was signed in 1959 and entered into force in 1961, and its Madrid Protocol, which was signed in 1991 and entered into force in 1998, suspend claims of sovereignty over Antarctica and strictly protect its environment.  The Arctic is not governed by a similar treaty, but the eight nations with sovereignty over it use the Arctic Council seeking to coordinate policy, another example of the growth of “global environmental law.”  In the afternoon Mark and I gave a lecture on the same topic to my Global Environmental Law seminar and then we were joined by several students for a happy hour near campus.

On Thursday January 28 I was interviewed by Jeremy Tordjman from the Agence France-Presse about whether Volkswagen’s emissions test cheating and lead in drinking water in Flint, Michigan were the result of budget cutbacks and gaps in U.S. environmental law.  Instead I argued that they both illustrate the wisdom of encouraging civil society groups to serve as a backstop when government agencies fail to protect the public.  See “Volkswagen, Flint Point to Weakness in U.S. Environmental Protections,” Agence France-Presse, January 31, 2016, online at: http://news.yahoo.com/volkswagen-flint-point-weakness-us-environmental-protections-081901452.html.

DC Circuit Refuses Stay of Clean Power Plan, Supreme Court Upholds FERC Demand-Response Rule, IUCN Academy Meeting (by Bob Percival)

On January 21 the U.S. Court of Appeals for the D.C. Circuit refused to stay EPA’s Clean Power Plan regulations requiring states to develop plans to control greenhouse gas (GHG) emissions from existing power plants.  The decision was unanimous by a panel consisting of Judges Rogers, Henderson and Srinivasan.  The panel did agree to expedite consideration of the litigation challenging the legality of the plan.  Oral argument is scheduled for June 2, 2016.  In an interview I gave to Law360 I predicted that the D.C. Circuit ultimately will uphold EPA’s regulations. Ketih Goldberg, D.C. Circuit Panel Tapped for CPP Fight Gives EPA Early Edge, LAW360, Jan. 22, 2016, online at: http://www.law360.com/articles/720999/dc-circ-panel-tapped-for-cpp-fight-gives-epa-early-edge

On January 25 the U.S. Supreme Court surprised most observers by upholding a demand-response regulation issued by the Federal Energy Regulatory Commission (FERC) to encourage large users of electricity to reduce their consumption during peak hours.  The surprise was that the decision was by a 6-2 vote with Chief Justice Roberts and Justice Kennedy joining the four Justices (Ginsburg, Breyer, Sotomayor and Kagan) who are most sympathetic to environmental regulations.  Justice Alito recused himself from the case. The oral argument in this case was described in my October 27, 2015 blog post.  It was the subject of a field trip for students in my Environmental Law classes in College Park and at the law school last fall.  Based on the oral argument, none of my students predicted that the D.C. Circuit would be reversed.  

In her majority opinion for the Court, Justice Kagan found that the Federal Energy Regulatory Commission unambiguously has authority under the Federal Power Act to regulate the rules used by operators of wholesale electricity markets to pay for reductions in electricity consumption and to recoup those payments through adjustments to wholesale rates. The Court majority also held that the U.S. Court of Appeals for the D.C. Circuit erred in holding that the rule issued by the Federal Energy Regulatory Commission is arbitrary and capricious.  Justice Scalia wrote a dissenting opinion joined only by Justice Thomas.  I believe that this surprising decision may be enormously significant as a signal that the Chief Justice and Justice Kennedy understand the importance of the transition the U.S. is making to a more efficient, greener energy infrastructure.  It certainly bodes well for the chances of EPA’s Clean Power Plan being upheld by the U.S. Supreme Court.

I spent Friday January 22 in New York City.  In the morning I participated in a meeting at United Nations Headquarters hosted by the IUCN’s Permanent Observer to the UN, David O’Connor for members of the governing board of the IUCN Academy of Environmental Law.  Gabriele Goettsche-Wanli, Director for the Division of Ocean Affairs and the Law of the Sea in the UN’s Office of Legal Affairs, discussed the launch of negotiations for a legally binding instrument on conservation and sustainable use of marine biological diversity in areas beyond national jurisdiction.  The hope is that the negotiations will produce an instrument by the end of 2017 that can be considered by the UN General Assembly in 2018.

In the afternoon I moderated a program on “Comparative Environmental Law: Regional Insights” at the Pace Midtown Center.   The program included fascinating presentations from professors about new developments in environmental law in several countries.  These included discussions of the Supreme Court of Brazil’s recognition of “moral harm” to the environment (which sounds like a kind of increased risk cause of action), the Turkish Council of State halting the Green Road Project at the behest of the environmental NGO Tema, and Singapore’s use of burden-shifting laws to combat transboundary pollution from fires in Indonesia.  

The massive snowstorm that hit the east coast on Friday and Saturday stranded me in New York until Sunday.  It has resulted in the cancellation of classes at the University of Maryland Carey School of Law until Wednesday.  Fortunately, I am not teaching on Mondays or Tuesdays this semester.  

U.S. Sues VW, TransCanada Sues over Keystone XL, Record Investments in Renewables, Pause in Federal Coal Leasing (by Bob Percival)

On January 4th the U.S. Department of Justice filed a civil suit against Volkswagen for its extensive use of software that defeated emissions tests on its diesel vehicles.  The complaint alleges that 499,000 cars sold in the U.S. between 2009 and 2015 emitted much higher levels of pollution than test data showed.  The Justice Department is seeking both an injunction to stop the cheating and civil penalties that will range into the billions of dollars.  More than 450 private lawsuits have been filed against Volkswagen.  These have been consolidated in the U.S. District Court for the Northern District of California.  Several state attorneys general have complained that Volkswagen is refusing to comply with their discovery requests, citing German privacy law.  

EU regulators are now realizing that their ability to uncover cheating on emissions tests is not as advanced as in the U.S.  They are seeking greater authority to monitor actual emissions.  Jim Brunsden, Brussels Seeks More Powers to Monitor Carmakers Emissions, Financial Times, January 6, 2016, at 2.  Tesla founder Elon Musk wrote a letter to the California Air Resources Board suggesting that Volkswagen should not be required to retrofit existing cars with better pollution control devices, but rather should be required to accelerate its development of electric cars. Musk argues that this is the best way to mitigate the damage to the environment caused by the Volkswagen vehicles.

On January 6 TransCanada filed a lawsuit in federal court challenging President Obama’s rejection of the Keystone XL pipeline.  The company also announced that it will file a petition challenging the pipeline rejection as a breach of U.S. obligations under the North American Free Trade Agreement (NAFTA).  Opponents of the new Trans Pacific Partnership trade liberalization agreement quickly seized upon the latter to argue that it illustrated how trade agreements can jeopardize implementation of environmental measures.

Bloomberg New Energy Finance estimates that 2015 was a record year for investment in renewable energy projects even as the price of fossil fuels plunged.  A total of $329 billion was invested in wind, solar, and biomass energy projects (large hydropower projects were not counted in Bloomberg’s analysis).  More than one third of these investments were made in China, where $110.5 billion in renewable investments were made. A total of $56 billion was invested in projects in the U.S.  Chris Mooney, Clean Energy Is Expanding Even with Cheap Fossil Fuels, Washington Post, Jan. 15, 2015, at A14.

The Saudi government is joining what several other countries have done by taking advantage of plunging oil prices to cut energy subsidies it provides to its citizens.  Adam Taylor, Saudi Arabia Tightens Its Belt as Cheaper Oil Pulls Down Revenue, Washington Post, January 3, A16.

Last week President Obama announced that the federal government would temporarily suspend leasing of coal deposits on federal lands.  The moratorium is designed to give the government time to determine whether criticisms that it is selling federal coal deposits for below market rates.  Obama’s action is yet another indication of the administration’s efforts to promote a shift in the U.S. energy infrastructure away from fossil fuels, a theme the President reiterated in his State of the Union Message last Tuesday.

After my last blog post on the top ten developments in environmental law in 2015, I have concluded that there are two other events I should have mentioned: the UN’s adoption of new sustainable development goals in September and the move to phase out HFCs by the parties to the Montreal Protocol.

From January 6-10 I attended the annual conference of the American Association of Law Schools (AALS). On January 7th I participated in a field trip to the United Nations sponsored by the International Law Section of the AALS.  Chile’s UN Ambassador gave a luncheon address that reviewed some of the work he performed in monitoring the application of sanctions to African countries while Chile was a member of the UN Security Council last year.

On Friday January 15, the U.S. Supreme Court announced that it would review an obscure takings decision.  In Murr v. Wisconsin, No. 15-214, the Court may address the long-suffering “parcel as whole” issue in regulatory takings doctrine in the context of a property that was subdivided.  The question presented in the case is whether in a regulatory taking case, the "parcel as a whole" concept described in Penn Central Transportation Company v. City of New York, 438 U.S. 104, 130-31 (1978), establishes a rule that two legally distinct, but commonly owned contiguous parcels, must be combined for purposes of takings analysis.

The lead poisoning crisis in Flint, Michigan, intensified last week as Michigan Governor Rick Synder called out the National Guard to help distribute bottled water to citizens whose drinking water is polluted with lead. President Obama also issued an emergency declaration.  The crisis arose when the city of Flint decided to use the Flint River for its drinking water instead of receiving its drinking water from Detroit.  The new water source corroded lead pipes and resulted in significant quantities of lead in the city’s drinking water.  Allegations that government officials knew about the lead poisoning but failed to take action are now being investigated.

Some updates on my previous work follow.  A video of the joint presentation I made with John Cruden, the Assistant Attorney General for the Justice Department's Environment and Natural Resources Division, on "Leading Cases and Other Highlights of the Past Year" is now available on Vimeo at https://vimeo.com/148115157.  Our presentation was to the annual meeting of the American College of Environmental Lawyers in New York. We reviewed the top developments in environmental law in 2015 and make some predictions concerning what will be the top cases in 2016.  

I am the featured guest on the "Justice on Trial" podcast, discussing the Paris Climate Agreement.  See “Paris Climate Change Agreement,” Justice on Trial Podcast: Episode 14, Jan. 4, 2016 (http://jotpodcast.com/justice-on-trial-podcast-14-climate-change).

My New Republic/The Conversation piece on the legal durability of U.S. pledges at the Paris climate conference has now been translated into Chinese.  The Mandarin version now appears on several Chinese websites, including:

China Economic Net, Dec. 28, 2015, available online at: : http://intl.ce.cn/specials/zxgjzh/201512/28/t20151228_7909236.shtml

China Daily, Dec. 28, 2015, available online at: a http://cnews.chinadaily.com.cn/2015-12/28/content_22843166.htm

163 News, Dec. 28, 2015, available online at: http://news.163.com/15/1228/17/BBUIN59N00014JB5.html

China Ministry of Industry and Information Technology (MIIT), Center for International Economic and Information Technology (MIIT), Center for International Economic and Technological Cooperations (CIETC), Dec. 30, 2015, available online at: http://mp.weixin.qq.com/s?__biz=MzAwNDcxNDE1Mw==&mid=402615351&idx=1&sn=1a6e44aa17825fccd5730f303b6b9382&3rd=MzA3MDU4NTYzMw==&scene=6#rd

China University of Political Science and Law, Environmental Law Research Institute, Jan. 7, 2016, available online at: http://mp.weixin.qq.com/s?__biz=MzA4OTk2ODk5Mw==&mid=401481377&idx=2&sn=fb872ba1db682ecc7d33fb9d64ad8a3a&3rd=MzA3MDU4NTYzMw==&scene=6#rd Technological Cooperations (CIETC), Dec. 30, 2015, available online at: http://mp.weixin.qq.com/s?__biz=MzAwNDcxNDE1Mw==&mid=402615351&idx=1&sn=1a6e44aa17825fccd5730f303b6b9382&3rd=MzA3MDU4NTYzMw==&scene=6#rd

China University of Political Science and Law, Environmental Law Research Institute, Jan. 7, 2016, available online at: http://mp.weixin.qq.com/s?__biz=MzA4OTk2ODk5Mw==&mid=401481377&idx=2&sn=fb872ba1db682ecc7d33fb9d64ad8a3a&3rd=MzA3MDU4NTYzMw==&scene=6#rd

Top 10 Developments in Global Environmental Law in 2015 (by Bob Percival)

“Happy New Year,” or “Feliz Año Nuevo” as they say here in Puerto Rico.  As this is my first blog post of 2016, I will resume the tradition of naming the top developments in global environmental law during the past year.  (Last year I was in Antarctica on New Years and was understandably  too distracted to put such a list together). To make up for last year’s omission, this year I will be bold and try to list the ten stories in what I consider to be their reverse order of importance.

When dealing with environmental issues it is hard to choose ten discrete events because “everything is connected to everything else,” so inevitably I have mixed some together.  

10.  Republican Leaders Demonize EPA but Pass Chemical Reform Measures: As the 2016 presidential campaign began, Republican candidates sought to demonize the U.S. Environmental Protection Agency to appeal to a radical conservative base, but Republicans in Congress were largely unsuccessful in enacting anti-EPA measures due to Senate rules and President Obama’s willingness to veto such legislation.  Surprisingly, comprehensive reform of the Toxic Substances Control Act passed both houses of Congress, though in somewhat different forms that will need to be reconciled in 2016.  Congressional action was spurred in part by the realization that U.S. chemical control law had fallen far behind that of the EU and even China, although the explosions from illegally stored chemicals that killed 173 people in Tianjin, China, in August confirmed that Chinese law is poorly enforced.  The U.S. Congress also adopted the Microbead Free Waters Act of 2015 that amended the Federal Food, Drug & Cosmetic Act to ban the use of cosmetics that contain synthetic plastic microbeads because of their environmental impact. 

9.  Australia and Canada Replace Anti-Environmental Leaders: Fiercely anti-environmental leaders left office in Australia and Canada.  Australian Prime Minister Tony Abbott was replaced in office by his own Liberal Party by Malcolm Turnbull whose environmental policies are more moderate. Canada’s Steven Harper lost a parliamentary election and was replaced as Prime Minister by Justin Trudeau whose policies are viewed as far more environmentally friendly.  While Trudeau favored the Keystone XL pipeline, he was gracious and understanding when President Obama announced in November that he would not approve it.  A new, more environmentally-friendly provincial government in Alberta, where the pipeline would have originated, announced that it would adopt a province-wide carbon tax.

8. Conflicts between Multinational Extractive Industries and Indigenous Populations: In the long-running dispute between Chevron and indigenous populations in Ecuador, the Supreme Court of Canada rejected Chevron’s claim that its Canadian assets cannot be used to satisfy a $9.5 billion judgment issued against it by a court in Ecuador for oil pollution there.  In April the U.S. Court of Appeals for the Second Circuit heard oral argument in the appeal of a RICO judgment issued against the plaintiffs’ lawyers by New York federal district judge Lewis Kaplan, but it has yet to release its decision.  Penguin Random House published an excellent book, Law of the Jungle, written by journalist Paul M. Barrett, which covers the history of this litigation to redress massive oil contamination in Ecuador. The litigation started in New York federal court in 1993, but initially was dismissed there in favor of the courts of Ecuador at the oil company’s behest.  As the book makes clear, Chevron would have been far better off if it had done what Occidental Petroleum did last March when it reached a settlement with the Achuar for oil contamination associated with its drilling operations in Peru.

7. Tailings Dam Collapse Causes Massive Sludge Spill in Brazil: On November 5 a dam collapse at an impoundment used to store mining tailings by Vale and BHP Billiton Ltd. in Brazil killed 19 people, destroyed several villages and polluted hundreds of miles of rivers and the Atlantic Ocean.  Rocked by public protests over corruption, the Brazilian government responded by seeking the equivalent of $5 billion in fines and damages.

6.  Effects of Global Warming and Climate Change Become More Readily Apparent:  It is widely believed that 2015 will have been the hottest year on record as the effects of global warming and climate change become more apparent.   The Obama administration’s EPA adopted its Clean Power Plan to control emissions of greenhouse gases (GHGs) from existing powerplants.  Courts in the Netherlands and Pakistan ruled that their governments were not doing enough to control emissions of GHGs. Major EU oil companies announced their support for a carbon tax.

5. Shell Cancels Arctic Drilling Amid Oil Glut as Oil Prices and Costs of Renewables Plummet: A global glut of oil sent prices of crude plunging well below $40/barrel, sharply reducing the profits of major oil companies.  After receiving a permit and conducting exploratory drilling in U.S. waters off the north shore of Alaska, Royal Dutch Shell announced that it was suspending oil exploration in the Arctic.  Lord Browne, former chairman of BP, had criticized Arctic drilling as too risky for the industry.  Despite the plunge in the price of oil, solar and wind energy continued to expand, aided by significant reductions in the costs of installing these renewables, particularly solar.

4. As New Chinese Environmental Law Spurs Citizen Suits, “Airpocalypses” Return to Major Cities: Amendments to China’s Basic Environmental Law, which became effective in January, spurred a new wave of citizen suits that Chinese courts were required to accept.  While most of these lawsuits dealt with water pollution, horrendous air pollution (“airpocalypses”) returned to Beijing and other cities near the end of the year.  Record air pollution also gripped Delhi, Tehran and Milan, spurring controls on vehicle use, and Southeast Asia was plagued in the fall by enormous pollution from fires caused by illegal land clearing in Indonesia.  

3. Volkswagen Emissions Cheating Scandal Stuns Corporate World:  The global corporate world was stunned in September by the revelation that for many years Volkswagen installed software on 11 million diesel vehicles worldwide to deceive emissions tests.  The software enabled these vehicles to pass emissions tests even though the vehicles emitted levels of pollution many times greater than allowed.  The revelation led to the resignation of the company’s CEO and universal condemnation of the company.  Because this clearly involved deliberate violations of the environmental laws at the behest of high corporate officials, it severely undermined public trust in both corporate responsibility and the enforcement of the environmental laws.  Volkswagen now potentially faces some of the greatest penalties in history for violation of environmental law.

2. Pape Francis Issues “Laudato Si” Encyclical: On June 18 the Vatican released Pope Francis’s long-anticipated encyclical on the environment, Laudato Si (Praise Be to You) On Care for Our Common Home. The gist of Laudato Si is that mankind has a strong moral obligation to protect the environment that has not been honored despite repeated global environmental summits.  As a result we face an “ecological crisis” that particularly harms the poorest and most vulnerable.  We must pursue intergenerational equity and hear “both the cry of the earth and the cry of the poor”.  Pope Francis repeated some of these themes in an address to a joint session of the U.S. Congress in September.  The Vatican used the encyclical to press world leaders to adopt a new global agreement to respond to global warming, which they did in Paris in December. 

1. World Adopts Paris Agreement to Respond to Climate Change:  On December 12th 195 nations unanimously endorsed a new global climate agreement in Paris at the conclusion of the 21st Conference of the Parties to the UN Framework Convention on Climate Change (COP21).  This is a historic achievement because it commits virtually every country in the world for the first time to take action to control emissions of greenhouse gases (GHGs).  While it is well recognized that the intended nationally determined contributions (INDCs) each country made will not, taken together, be sufficient to meet the global target of keeping the rise in global temperatures well below 2 degrees Celsius, countries intend to strengthen their commitments every five years and a robust system of transparency and monitoring will be used to measure progress.  One of the most important factors laying the groundwork for the success of the Paris negotiations was the climate agreement announced in November 2014 between China and the U.S., the countries who are the two largest emitters of GHGs.