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Tuesday, November 30, 2010

International Financing of Responses to Climate Change


Jane A. Leggett
Specialist in Energy and Environmental Policy

Many voices, domestically and internationally, call for the United States to increase its international financing of measures to address climate change. Financing would help low-income countries pay for the extra costs of development incurred to reduce their emissions of greenhouse gases (GHG) and to adapt to climate variability and change. The United States and other industrialized countries committed to financial assistance in the United Nations Framework Convention on Climate Change (UNFCCC, 1992) and the Copenhagen Accord (2009). In the Copenhagen Accord, countries pledged (1) $30 billion in 2010 to 2012 as fast-start financing, and (2) to seek $100 billion annually by 2020, with funds to come from both public and private sources. The Obama Administration has not yet specified what shares of the two pledges it envisions the United States providing, nor a strategy to fulfill the 2020 pledge.

For FY2010, Congress appropriated approximately $1,007 million for all “core” international climate assistance, up from $315 million for FY2009. The Administration requested that this increase to $1,391 million in FY2011, with another $104 million proposed for complementary programs in other agencies, such as the Department of Energy. Alternatives to appropriations could generate new financing. (Some options are compared in Appendix A).

The United States incurs direct and indirect costs if subsidizing overseas investments to address climate change, and gains a variety of benefits. Financial assistance to low income countries could help achieve, more efficiently than domestic action alone, the global reductions of GHG emissions deemed necessary to slow and stabilize human-related climate change. Financing could facilitate more rapid advance and cost reductions of emerging low-emitting technologies, and assist U.S. companies to acquire access to and sell new technologies. Additional benefits could include suppression of world fossil fuel prices, improved international security, a reduction in longer-term demands for development and humanitarian assistance (including relief following natural disasters), and a boost to diplomatic credibility and effectiveness (by following through on past pledges).

Low income countries have stated that fulfilling their commitments under the UNFCCC will depend on financial and technical support from the industrialized countries. Low income countries seek resources that are new, additional to previous flows, adequate, predictable, and sustained. Studies have estimated the needs for incremental financing to range from US$4 billion to several hundred billion annually for adaptation by the year 2030, in addition to comparable amounts for extra investment in clean energy and agriculture (Table 1). The International Energy Agency estimates that mitigation costs could be more than offset by energy cost savings.

Part of the U.S. pledge of climate change financing is being provided by federal appropriations. Congress may consider new mechanisms for further amounts, especially amounts beyond 2012. For example, the House-passed American Clean Energy and Security Act of 2009 (H.R. 2454) provided for a portion of allowances or revenues generated by a GHG cap-and-trade program to fund international climate-related actions. Congress also may exercise oversight of the operations and performance of existing programs that provide financial and other assistance.

Internationally, climate change negotiators continue to debate priorities among assistance recipients and activities, mechanisms for generating and disbursing funds, and other questions. If negotiations were to produce a new treaty intended to be legally binding, the Congress would have to consent to its ratification before it could legally bind the United States.



Date of Report: November 23, 2010
Number of Pages: 37
Order Number: R41500
Price: $29.95

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Tuesday, November 23, 2010

Litigation Seeking to Establish Climate Change Impacts as a Common Law Nuisance


Robert Meltz
Legislative Attorney/Acting Section Research Manager

Congressional inaction on climate change has led various entities to pursue climate change measures off Capitol Hill. Either in hopes of realizing substantive measures or to pressure Congress to act, such entities have looked to international forums, treaty negotiations, Environmental Protection Agency (EPA) action under the Clean Air Act, state and regional efforts, and—the topic here—lawsuits seeking to establish climate change impacts as a common law nuisance. If congressional efforts to block or delay EPA from addressing greenhouse gas (GHG) emissions are successful, that likely will give added importance to such nuisance suits. As background, a private nuisance is a substantial and unreasonable invasion of another’s interest in the private use and enjoyment of land, without involving trespass; a public nuisance is an unreasonable interference with a right common to the general public.

In litigating a climate-change/nuisance suit, several issues arise at the outset and, if resolved against the plaintiff, prevent the suit from proceeding. First, there is the question whether the federal common law of nuisance has been displaced yet by EPA regulation of GHG emissions under the Clean Air Act. A second threshold issue is standing to sue, which asks whether a given party is an appropriate one to invoke the jurisdiction of a federal court. As developed by the Supreme Court, the Constitution requires that for a plaintiff to have standing in federal court, he/she must show injury in fact, that the injury was caused by the defendant, and that the remedy sought likely will ameliorate the injury. Suits seeking relief based on climate change claims have run into difficulty with one or more of these requirements. A third threshold issue is the political question doctrine, which is designed to restrain the judiciary from inappropriately interfering in matters reposed in the other branches of government. For example, the defendants in one case argued that one indicium of a political question—the Constitution’s textual commitment of the issue to the executive or legislative branch—is displayed by climate change because using a nuisance case to reduce U.S. CO
2 emissions undermines the President’s constitutional authority to manage foreign relations—in particular, to induce other nations to reduce their CO2 emissions.

There are five common law/nuisance suits addressing climate change now or formerly active. Of the two no longer active, neither resulted in a judgment against the defendants. The three stillactive cases are (1) Connecticut v. American Electric Power Co., Inc., a suit against five coalfired electric utilities alleged by plaintiffs to be responsible for the most GHG emissions (following a Second Circuit decision, on petition for certiorari to the Supreme Court on threshold issues); (2) Comer v. Murphy Oil USA, a suit against certain oil, coal, and chemical companies in Mississippi arguing that their GHG emissions contributed to making Hurricane Katrina more severe and thus damaged plaintiffs’ property (now before the Supreme Court on a mandamus petition challenging the Fifth Circuit’s dismissal of the appeal based on the circuit’s lack of a quorum); and (3) Native Village of Kivalina v. ExxonMobil Corp., in which a coastal Eskimo village sued 24 oil and energy companies, claiming that the large quantities of GHGs they emit contribute to climate change, which is causing coastal erosion that will require relocating the village (now pending before the Ninth Circuit).



Date of Report: November 19, 2010
Number of Pages: 12
Order Number: R41496
Price: $29.95

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Monday, November 22, 2010

International Climate Change: A Negotiations Side-by-Side

Jane A. Leggett
Specialist in Energy and Environmental Policy

Parties to the United Nations Framework Convention on Climate Change (UNFCCC), signed in 1992, gather for their 16th annual meeting in Cancun, Mexico, from November 29 to December 10, 2010. Several formal and informal negotiating sessions in 2010, intended to resuscitate the global negotiations to address climate change beyond the year 2012, have followed the 2009 meeting in Copenhagen, with which many countries and observers were disappointed.

Under the UNFCCC, 194 governments, including the United States, have taken on obligations to address climate change through enhanced scientific and technological cooperation, assessment of sources of greenhouse gas (GHG) emissions and removals, and policies and measures to mitigate GHG and to promote adaptation to climate changes. By the time the UNFCCC entered into force in 1994, countries agreed that these obligations were inadequate to achieve the objective of “stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.” By 1995, a Berlin Mandate called for negotiation of a new agreement for deeper abatement, but with no new obligations for developing countries. The resulting Kyoto Protocol established emission reduction targets in aggregate of at least 5% below 1990 levels during 2008-2012 for the “Annex I” (developed) Parties. It also established GHG reduction targets (“assigned amounts”) for all Annex I Parties. For the European Union, Japan, and the United States, the assigned amounts were 8%, 7%, and 6%, respectively, below their 1990 levels of GHG emissions. The Kyoto Protocol allowed some credits for enhanced sequestration by forests, and for three new emissions trading mechanisms. President Clinton signed the Kyoto Protocol in 1997. In 2001, President George W. Bush indicated that the United States would not become a Party to that agreement, citing its omission of GHG commitments for all major emitters, and possible adverse effects on the U.S. economy. U.S. policy continues to reject becoming a Party to the Kyoto Protocol.

The Kyoto Protocol had always been viewed as a first step toward deeper and longer term reductions of GHG emissions. In 2007, the Parties established an Ad Hoc Group on Further Commitments under the Kyoto Protocol (AWG-KP) to negotiate GHG reductions after 2012, when the Kyoto Protocol’s first commitment period ends. Also in 2007, Parties to the UNFCCC agreed to the Bali Action Plan, which set a mandate for negotiations among all Parties for future commitments on a “shared vision” for the long term, climate change mitigation, adaptation, technology, and financing. This second track, under the Ad Hoc Group on Long Term Cooperation (AWG-LCA), proceeds in parallel, with conflicting views among Parties as to how the two possible agreements may relate to each other or converge into one.

In 2009, many observers and Parties hoped that the hard-negotiated Copenhagen Accord might serve as the vehicle to bridge deep divides between the two negotiating tracks and various regional and economic groupings of countries. During formal and informal meetings in 2010, some Parties seemed to back away from their pledges under the Copenhagen Accord, although some progress was made on several technical issues. Some Parties seek to codify that progress in decisions by the Cancun Conference of the Parties. Others, including the United States, insist that all major issues be resolved in a “balanced package” of agreement(s).

Few expect much progress at the Cancun talks, although many seek a decision to extend the negotiating mandates with a deadline of 2011 for comprehensive, legally binding agreements on further GHG mitigation, financing, technology cooperation, and adaptation.



Date of Report: November 18, 2010
Number of Pages: 23
Order Number: R41494
Price: $29.95

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Tuesday, November 16, 2010

Reorganization of the Minerals Management Service in the Aftermath of the Deepwater Horizon Oil Spill


Henry B. Hogue
Analyst in American National Government

On April 20, 2010, an explosion and fire occurred on the Deepwater Horizon drilling rig in the Gulf of Mexico, resulting in the largest oil spill in U.S. waters. This event drew additional attention to previously identified management challenges at the Minerals Management Service (MMS) in the Department of the Interior (DOI), the lead regulatory authority for leasing activity related to offshore oil and gas recovery. It also influenced administrative and congressional reform efforts that were already underway.

Prior to the oil spill, DOI and congressional investigations had identified a number of management shortcomings, ethical lapses among personnel, and conflicts of interest at MMS. Such concerns had been raised in oversight hearings and in reports by the DOI inspector general and the Government Accountability Office. The Obama Administration and the 111
th Congress were taking action to make changes at MMS in response to these findings prior to the oil spill.

In the aftermath of the oil spill, some observers and governmental officials raised concerns about potential conflicts among the missions that were vested in MMS. The three potentially conflicting missions of the agency, as articulated by the department, were “Outer Continental Shelf (OCS) resource management, safety and environmental oversight and enforcement, and revenue collection….” Within a month of the Deepwater Horizon incident, the Administration had initiated an administrative reorganization to address these perceived mission conflicts. As part of this reorganization, MMS was renamed the Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE).

During the 111
th Congress, bills were introduced that would reorganize BOEMRE/MMS and its functions. H.R. 3534 was introduced on September 8, 2009. The bill, as amended, was passed by the House on July 30, 2010. It would, among other things, abolish MMS and establish three new units within DOI, each charged with one of the three missions identified above. S. 3516 was introduced on June 21, 2010, and it was reported by the Committee on Energy and Natural Resources on July 28, 2010. This bill, as reported, would direct the Secretary of the Interior to use administrative authority to establish three new entities within the department. Two of the new organizations would carry out OCS leasing, permitting, and safety and environmental regulatory functions. The Secretary would be directed to eliminate “to the maximum extent practicable, … any potential organizational conflicts of interest related to leasing, revenue creation, environmental protection, and safety.” The third entity would be responsible for revenue and royalty management functions. Bills introduced by the Senate minority leader (S. 3643) and the Senate majority leader (S. 3663), and subsequently placed on the Senate Legislative Calendar, also included these provisions. H.R. 3736 and H.R. 5572, each of which would also affect the organization of BOEMRE/MMS, were introduced and referred during the 111th Congress, but had not been acted upon as of November 8, 2010.

This report provides additional information on these legislative initiatives. It then provides background and context on the origins of MMS and its organization at the time of the oil spill. It discusses Secretary Kenneth L. Salazar’s use of his administrative reorganization authority to address perceived conflicts among the agency’s missions and his call for Congress to enact organic legislation. The report then identifies potential congressional options with regard to BOEMRE/MMS reorganization. The report also includes historical examples of reorganizations elsewhere in the federal government that may provide useful insights during consideration of the organizational arrangements for carrying out BOEMRE/MMS functions
.


Date of Report: November 10, 2010
Number of Pages: 34
Order Number: R41485
Price: $29.95

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EPA’s Boiler MACT: Controlling Emissions of Hazardous Air Pollutants


James E. McCarthy
Specialist in Environmental Policy

On June 4, 2010, the U.S. Environmental Protection Agency (EPA) proposed Maximum Achievable Control Technology standards for boilers (the “Boiler MACT”), as Congress required in the 1990 amendments to Section 112 of the Clean Air Act. Boilers are used as power sources throughout industry and for power or heat by large commercial and industrial establishments as well. There is widespread interest in the proposed rule’s requirements and their potential effects.

EPA proposed the regulations because it has found, based on emissions data, that boilers (including coal-fired and biomass-fired boilers) are major sources of hazardous air pollutants (HAPs). The Clean Air Act defines a major source as any facility that emits 10 tons or more of a single listed HAP or 25 tons of any combination of HAPs annually. The HAPs themselves (187 substances) were listed by Congress in the 1990 Clean Air Act Amendments.

The proposed rule would replace a rule promulgated September 13, 2004, and subsequently vacated and remanded to the agency by the D.C. Circuit Court of Appeals. EPA is under a court order to promulgate a replacement rule by January 16, 2011. Existing facilities would then have three years to comply with the standards, unless the courts intervene again.

EPA estimates that the rule as proposed would affect 13,555 boilers and process heaters, with capital costs of $9.5 billion; annualized costs, which spread the costs of capital over the expected life of the equipment and include operating and maintenance costs as well, are estimated at $2.9 billion per year. A majority of these costs would be borne by coal-fired and biomass-fired boilers, which together account for only 7.4% of all the existing units covered by the rule. In order to comply, the coal-fired and biomass-fired units may need to install fabric filters (also known as baghouses) to achieve control of mercury and particulate matter; wet scrubbers to meet limits on hydrogen chloride and other acid gases; replacement burners, tune-ups, and combustion controls for carbon monoxide and organic HAPs; and carbon injection for mercury, dioxins, and furans. Most boilers—85% of those affected by the rule—are fueled by natural gas. Natural-gas-powered boilers would experience cost savings under the rule, according to the agency.

EPA estimates that the benefits—including the avoidance of 1,900 to 4,800 premature deaths annually—would outweigh the costs by at least $14 billion each year. Nevertheless, the affected industries have raised a number of objections to the proposal. Besides the potential economic impacts, one issue is whether EPA should have identified additional subcategories within the boiler universe, giving it greater flexibility to set standards. Others maintain that the agency should have used its authority to set less stringent standards for hydrogen chloride and other acid gases (which make up 61% of the total emissions of HAPs) under a section of the statute that gives the Administrator flexibility to set less stringent standards for HAPs that have a health threshold. Another issue is whether EPA’s method of identifying the emissions of the best performing existing units correctly interprets the agency’s authority under the statute. Each of these issues is discussed in this report. The report also briefly discusses three related rules that EPA proposed at the same time as the Boiler MACT, dealing with smaller “area source” boilers and with commercial and industrial boilers that burn solid waste (the “CISWI Rule”).

Numerous congressional offices have written the EPA Administrator concerning the proposed rule. EPA must address these and other public comments when it promulgates the final version, expected in January 2011. Following promulgation, if they wish to challenge the standards, interested parties have 60 days to file a petition for court review.



Date of Report: November 2, 2010
Number of Pages: 19
Order Number: R41459
Price: $29.95

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