Supreme Court Denies Hearing Air Equipment Replacement Case

Apr 30: The U.S. Supreme Court has refused to hear an Administration appeal of the March 17, 2006, decision of the U.S. Court of Appeals, D.C. Circuit in State of New York v. U.S. EPA [See WIMS 3/17/06]. The case, EPA v. State of New York, et al (06-736) addressed the Equipment Replacement Provision (ERP), which amends the Routine Maintenance, Repair, and Replacement Exclusion (RMRR) from the Clean Air Act New Source Review requirements. Under the Clean Air Act, sources that undergo “any physical change” that increases emissions are required to undergo the NSR permitting process. The exclusion has historically provided that routine maintenance, repair, and replacement do not constitute changes triggering NSR. The ERP both defined and expanded that exclusion. EPA explained: "[The] rule states categorically that the replacement of components with identical or functionally equivalent components that do not exceed 20% of the replacement value of the process unit and does not change its basic design parameters is not a change and is within the RMRR exclusion."

Equipment Replacement Provision of the Routine Maintenance, Repair and Replacement Exclusion, 68 Fed. Reg. 61,248, 61,270 (Oct. 27, 2003) (Final Rule); see also 70 Fed. Reg. 33,838 (June 10, 2005)(Reconsideration). Hence, the ERP would allow sources to avoid NSR when replacing equipment under the twenty-percent cap notwithstanding a resulting increase in emissions. The court stayed the effective date of the ERP on December 24, 2003. The Appeals Court vacated the ERP saying that "it is contrary to the plain language of section 111(a)(4) of the Act."

The Appeals Court further explained that it vacated the ERP because it violated section 111(a)(4) in two respects: "First, Congress’s use of the word 'any' in defining a 'modification' means that all types of 'physical changes' are covered. Although the phrase 'physical change' is susceptible to multiple meanings, the word 'any' makes clear that activities within each of the common meanings of the phrase are subject to NSR when the activity results in an emission increase. As Congress limited the broad meaning of 'any physical change,' directing that only changes that increase emissions will trigger NSR, no other limitation (other than to avoid absurd results) can be implied. The definition of 'modification,' therefore, does not include only physical changes that are costly or major. Second, Congress defined 'modification' in terms of emission increases, but the ERP would allow equipment replacements resulting in non-de minimis emission increases to avoid NSR."

A release from Natural Resources Defense Council (NRDC) indicated that the loophole argued in the case would have allowed "more than 20,000 power plants, refineries and other industrial facilities to replace equipment with 'functionally equivalent' equipment without first undergoing the required clean air reviews. The exemption would have applied even if a facility's air pollution increased by thousands -- or tens of thousands -- of tons as a result of the new equipment."

The plaintiffs winning the case included Alabama Environmental Council, American Lung Association, Clean Air Council, Communities for a Better Environment, Delaware Nature Society, Environmental Defense, Group Against Smog and Pollution, Michigan Environmental Council, Natural Resources Defense Council (NRDC), Ohio Environmental Council, Scenic Hudson, Sierra Club, Southern Alliance for Clean Energy, and U.S. PIRG. The groups were represented by Earthjustice, the Clean Air Task Force and NRDC. A group of 15 state attorneys general, led by the State of New York, was also part of the successful lawsuit.

Access the Supreme Court denial order (click here, See page 8 of 10). Access the Supreme Court docket for case 06-736 (click here). Access the complete D.C. Circuit March 17, 2006 opinion (click here). Access a release from NRDC (click here). Access a release from Earthjustice (click here). [*Air]

Most Cap & Trade Cost Will Be Borne By Consumers

Apr 25: The Congressional Budget Office (CBO) has released a brief 8-page report entitled, Trade-Offs in Allocating Allowances for CO2 Emissions. The report explores the implications of a “cap-and-trade” program to reduce U.S. emissions of greenhouse gases (GHG), including carbon dioxide (CO2) which is currently being considered in Congress. Under a cap-and-trade program for carbon dioxide emissions, policymakers would set a limit on the total amount of CO2 that could be emitted in a given period -- the “cap”—and would issue rights, or allowances, corresponding to that level of emissions. Entities that were subject to the cap (such as coal mines, oil importers, refineries, or electric utilities, depending on the proposal) would be required to hold allowances for their CO2 emissions. After the allowances were initially distributed, entities would be free to buy and sell them -- the “trade” part of the program—and the price of allowances would adjust to reflect the cost of meeting the emission cap.

The CBO brief focuses only on CO2 emissions and examines how policymakers’ decisions about allocating the allowances would affect the total cost of the policy to the U.S. economy, as well as the distribution of that cost among households in their various roles as workers, consumers, and investors. CBO points out that the emission allowances (e.g. right to emit, say, 1 ton of CO2) would have substantial value -- perhaps totaling tens of billions or even hundreds of billions of dollars per year. Who received that value would depend on how the allowances were allocated. One option would be to have the government capture their value by selling the emission allowances, as it does for licenses to use the electromagnetic spectrum. Another possibility would be to give the allowances to energy producers or some energy users at no charge -- the approach that the U.S. government adopted in the sulfur dioxide program and that the European Union has used since 2005 in its cap-and-trade program for CO2 emissions.

CBO says that, "Regardless of how the allowances were distributed, most of the cost of meeting a cap on CO2 emissions would be borne by consumers, who would face persistently higher prices for products such as electricity and gasoline. Those
price increases would be regressive in that poorer households would bear a larger burden relative to their income than wealthier households would." In the most regressive of the strategies that CBO examined, average household income would fall by 3.0 percent for the lowest quintile and rise by 1.9 percent for the highest quintile.

Access the CBO report (click here). [*Climate]

No Progress On Toxic Wastes & Race

Apr 10: Environmental injustice in people-of-color communities is as much or more prevalent today than 20 years ago, according to researchers commissioned to conduct a follow-up to the 1987 landmark study, Toxic Wastes and Race in the United States. The new report, Toxic Wastes and Race at Twenty, 1987-2007: Grassroots Struggles to Dismantle Environmental Racism in the United States, shows that 20 years later, disproportionately large numbers of people of color still live in hazardous waste host communities, and that they are not equally protected by environmental laws.

Robert Bullard, director of the Environmental Justice Resource Center at Clark Atlanta University and the principal investigator for the study said, "People of color across the United States have learned the hard way that waiting for government to respond to toxic contamination can be hazardous to their health and health of their communities." The 160-page report, which was commissioned by the United Church of Christ and produced by scholars at Clark Atlanta University, the University of Michigan, the University of Montana and Dillard University, points to the dismal post-Katrina response in New Orleans as one poignant example of unequal treatment of minorities in hazardous waste emergencies. The findings also show that environmental laws don't protect communities of color any more than they did 20 years ago when the original report was commissioned.

According to a release, the report is the first national study to use a new method of data analysis that better locates people in relation to hazardous waste sites, and uses 2000 census data to show that the racial disparities are much greater than previously reported. Robin Saha, assistant professor of environmental studies at University of Montana said, "We think this study and the findings in it, as well as the case studies that show the human side to the national statistics, make a really strong case for environmental injustice to be on the policy agenda of Congress. It's clear the policies we are trying aren't working and that something else needs to be done."

The report indicates that more than nine million people are estimated to live in host neighborhoods within three kilometers of one of 413 hazardous waste facilities nationwide. Host neighborhoods are typically economically depressed, with poverty rates 1.5 times that of non-host communities. The report makes more than three dozen recommendations for action at the Congressional, state and local levels to help remedy the disparities. It also makes recommendations for nongovernmental agencies and industry.

Access a lengthy release with links to the complete report an Executive Summary and university contacts (click here). [*All]

Stakeholders Recommendations On Climate Change Legislation

Apr 19: Representatives John Dingell (D-MI), Chairman of the Committee on Energy and Commerce, and Rick Boucher (D-VA), Chairman of the Subcommittee on Energy and Air Quality, made public the responses of more than 70 industry groups, non-governmental organizations and labor unions to a letter soliciting recommendations on prospective climate change legislation. Leaders from the energy industry and environmental community responded to questions focusing on the ramifications of greenhouse gas emissions and cap-and-trade policy. The responses comprise an important summary collection of interest group positions on climate change.

Dingell said, “These responses illustrate the challenge we have before us in balancing our environmental and economic needs. As we continue our effort to craft sensible policies to address the matter of rising greenhouse gas emissions, we will take into consideration the variety of concerns that have been expressed to the committee. The responsibility to solve this problem does not lie solely with one industry. Each will be asked to make an appropriate contribution to the collection box.” Dingell said the outreach effort is part of the Committee’s ongoing examination of climate change. The Committee has conducted 11 climate change hearings featuring testimony from more than 50 witnesses, including former Vice-President Al Gore.

Boucher said, "The challenge before the subcommittee is to write a mandatory greenhouse gas control measure with economy wide application that does not dislocate any economic sector. The responses we received from this diverse group of industry, environmental, and other organizations with a strong interest in climate change legislation offer beneficial insight for the subcommittee as we continue to consider the best method to accomplish this goal.”

Access a release with links to both solicited and unsolicited responses (click here). Access additional information from the Committee on climate change (click here). [*Climate]

Senate Hearing On Supreme Court GHG Ruling

Apr 24: The Full Senate Environment and Pubic Works Committee, Chaired by Senator Barbara Boxer (D-CA), held a hearing on, The Implications of the Supreme Court’s Decision Regarding EPA’s Authorities with Respect to Greenhouse Gases under the Clean Air Act. On April 2, 2007, in a 5-4 decision, the U.S. Supreme Court decided the historic case about global warming (Massachusetts, et al. v. EPA, et al., No. 05-1120), and ruled that EPA has existing authority under the Federal Clean Air Act to regulate greenhouse gas (GHG) emissions from motor vehicles. EPA had previously refused to regulate such gases, arguing it lacked statutory authority [See WIMS 4/2/07].

Those testifying at the hearing included: Stephen Johnson, Administrator U.S. EPA; former EPA Administrator William Reilly, Senior Advisor, TGP Capital Founding Partner, Aqua International Partners; former EPA Administrator Carol Browner,Principal The Albright Group, LLC; former EPA General Counsel and EPW Committee Chief Counsel Ann R. Klee a Partner with Crowell and Moring; David Doniger, Policy Director, Climate Center Natural Resources Defense Council; and Peter Glaser, a Partner with Troutman Sanders, LLP who represented the Washington Legal Foundation in the Supreme Court case.

In a brief statement Senator Boxer said, "Mr. Johnson used the word ‘complex’ many times. The Supreme Court case is not complex. It is clear. EPA should grant the waiver to California and the 11 other states who have asked for it, and they should make an endangerment finding that global warming emissions are a danger and will be controlled by law.” Boxer was referring to a waiver that would allow California and eleven other states to limit global warming pollution from vehicles.

In a 19-page testimony, Administrator Johnson commented on what he called "the President’s comprehensive climate change agenda as we consider the ramifications of the Supreme Court’s decision." In commenting on the Supreme Court decision, Johnson said, "Importantly, the Court did not hold that EPA was required to regulate greenhouse gas emissions under Section 202, or any other section, of the Clean Air Act. Rather, the Court merely concluded that greenhouse gas emissions were 'air pollutants' under the Clean Air Act, and, therefore, they could be regulated under Section 202 by the EPA subject to certain determinations. . . The Court held that, on remand, EPA must decide whether or not greenhouse gas emissions from motor vehicles cause or contribute to air pollution that is reasonably anticipated to endanger public health or welfare, or to explain why scientific uncertainty is so profound that it prevents making a reasoned judgment on such an endangerment determination. Importantly, the Court’s decision explicitly left open the issue of whether EPA can consider policy considerations when writing regulations in the event EPA were to make an endangerment finding. Indeed, the Court seemed to recognize that EPA has significant latitude with regard to any such regulations."

Johnson stated further, "The Agency fully recognizes the decision as one of the most important environmental law decisions in years--accordingly, we are trying to assure that the Agency is in the best possible position to address its ramifications. However, given the complexity of the decision and the very short time that has elapsed since the Court issued the opinion, at this early date it is impossible today to understand and explain fully how the decision may have any specific impact. . . the Court left open the question of what procedure EPA is to follow on remand regarding a potential endangerment finding [i.e. whether GHGs emitted by new motor vehicles may reasonably be anticipated to endanger public health or welfare]. Any such process should be public and transparent and based on the best available science. Additionally, there are various procedural options to consider, including whether we should reopen the public comment period on the petition; whether we should hold a public hearing or hearings; and whether we should, or, are required to, use rulemaking procedures to decide the petition."

EPA's former General Council testified, ". . .the decision has changed the regulatory landscape. The determination that greenhouse gases are air pollutants will likely lead EPA to regulate greenhouse gas emissions, and carbon dioxide (CO2) in particular, from new motor vehicles. It also likely will lead to regulation of stationary sources of greenhouse gases since the Clean Air Act’s stationary source provisions are also triggered by an 'endangerment' finding. In this respect, the decision is a significant one -- an endangerment finding under one program will make it very difficult for EPA not to regulate under other programs.

"The decision will not, however, have any meaningful impact in terms of addressing global climate change. Forcing the square peg of greenhouse gas emissions through the round holes of EPA’s existing regulatory tools – tailpipe standards, national ambient air quality standards, new source performance standards, etc. -- may have the effect of reducing U.S. emissions over time, but it will do nothing to reduce atmospheric concentrations of greenhouse gases, which is the true measure of effectiveness of regulation for climate change purposes. Unless our trading partners, China and India in particular, are also part of the effort to reduce global emissions of greenhouse gases, piece-meal regulation in the United States will not only achieve little; it may, in fact, have the unintended effect of leading to increased emissions by encouraging the relocation of U.S. businesses to countries not subject to greenhouse gas regulation."

Access the hearing website for links to all testimony and an archive webcast (click here). Access a statement from Senator Boxer (click here). [*Air, *Climate]

U.S. v. Atlantic Research Corp. Oral Arguments

Apr 23: The U.S. Supreme Court heard oral arguments in the case of U.S. v. Atlantic Research Corp. (Docket: 06-0562). The case is being appealed from the Eighth Circuit Court of Appeals decision of August 11, 2006 [See WIMS 8/14/06]. The primary questions presented in the case is: "Whether a party that is potentially responsible for the cost of cleaning up property contaminated by hazardous substances under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), but that does not satisfy the requirements for bringing an action for contribution under Section 113(f) of CERCLA, 42 U.S.C. 9613(f), may bring an action against another potentially responsible party under Section 107(a), 42 U.S.C. 9607(a)?"

The arguments included appearances from Thomas Hungar, Deputy Solicitor General for petitioner United States; Thomas Armstrong of Von Briesen & Roper for respondent Atlantic Research; and Jay Geck, the Deputy Solicitor General of Washington State, an amicus party supporting respondent Atlantic Research. An extensive list of amicus parties are referenced in the contacts below. A group of 40 states, Ford Motor Company, General Motors, Natural Resources Defense Council, former EPA officials and others are supporting respondent Atlantic Research. (See link to the complete transcript below).

In the Eighth Circuit opinion, which the Solicitor General says is incorrect, the Appeals Court said, "We agree with our sister Circuit [referring to the Second Circuit decision in Consolidated Edison Co. v. UGI Utilities, Inc., 423 F.3d 90, 100 (2d Cir. 2005], and hold that it no longer makes sense to view § 113 as a liable party’s exclusive remedy. This distinction may have made sense for parties such as Dico, which was allowed to seek contribution under § 113. But here, Atlantic is foreclosed from using § 113. This path is barred because Atlantic – like Aviall – commenced suit before, rather than 'during or following,' a CERCLA enforcement action. Atlantic has opted to rely upon § 107 to try to recover its cleanup costs exceeding its own equitable share. We conclude it may do so."

In its brief, the U.S. Solicitor General indicated, "This case presents the principal question left open by this Court two Terms ago in Cooper Industries, Inc. v. Aviall Services, Inc., 543 U.S. 157 (2004): Whether a party that is potentially responsible for the cleanup of property contaminated by hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. 9601 et seq., but is not eligible to bring an action for contribution under Section 113(f) of CERCLA, 42 U.S.C. 9613(f), may nevertheless bring an action against another potentially responsible party under Section 107(a), 42 U.S.C. 9607(a). In this case, the Eighth Circuit, consistent with an earlier decision of the Second Circuit but in conflict with a later decision of the Third Circuit, held that a potentially responsible party could pursue such an action under Section 107(a).

Access the complete transcript of the oral arguments (click here). Access a Medill News Service summary of the action (click here). Access the U.S. Supreme Court Docket listing all amici curiae parties for the case (click here). Access the Eight Circuit opinion (click here). Access the SCOTUS Blog preview of the argument (click here). Access links to various media coverage of the argument (click here). [*Remed]

IPCC Releases Impacts, Adaptation and Vulnerability Report

Note: WIMS is on Spring publication break for the next 2-weeks.
We will resume regular publication on Monday, April 24, 2007

Apr 6: At the 8th Session of Working Group II (WGII) of the Intergovernmental Panel on Climate Change (IPCC) meeting in Brussels, the group released its 4th assessment report, Climate Change 2007: Impacts, Adaptation and Vulnerability. The report assesses the latest scientific, environmental and socio-economic literature on "Impacts, Adaptation and Vulnerability." It provides a comprehensive analysis of how climate change is affecting natural and human systems, what the impacts will be in the future and how far adaptation and mitigation can reduce these impacts. The report also contains chapters on specific systems, sectors and regions. The government delegates from more than one hundred countries, together with the WGII Lead Authors, worked through the night to approve its Summary for Policymakers.

The release of the report follows the February 2, 2007, Working Group I report, Climate Change 2007: The Physical Science Basis, that assessed the current scientific knowledge of the natural and human drivers of climate change, observed changes in climate, the ability of science to attribute changes to different causes, and projections for future climate change [See WIMS 2/2/07]. The Working Group III report on Mitigation of Climate Change, is scheduled to be released on May 4, in Bangkok, Thailand.

In general, the Working Group reports are in two parts -- an underlying technical report, which is a very large, thousand-page or greater document, that is written by scientists around the world and which reflects a compilation, a summary of the existing literature on the topic of the report. And then a second piece, which is a much shorter document, called the Summary for Policymakers which are about 20-25 pages.

The WGII report is organized into five major sections including: A – Introduction; B – Current knowledge about observed impacts of climate change on the natural and human environment; C – Current knowledge about future impacts; D – Current knowledge about responding to climate change; and E – Systematic observing and research needs.

A United Nations release described the report saying, it indicates that warmer global temperatures are causing profound changes in many of the earth's natural systems. Approximately 20-30 per cent of plant and animal species assessed so far are likely to be at increased risk of extinction if increases in global average temperature exceed 1.5-2.5 degrees centigrade. According to IPCC forecasts, the earth is likely to warm by 3 degrees centigrade during this century, a temperature that would have largely negative consequences for biodiversity and ecosystem goods and services, such as water and food supply.

As a result of warmer temperatures, springtime events are occurring earlier, such as increased run-off and peak discharge in many glacier- and snow-fed rivers; "greening" of vegetation; and migration and egg-laying by birds. More animal and plant species have also been observed shifting toward higher latitudes. The report found that while some efforts are underway to adapt to climate change, they are, by and large, insufficient in dealing with the scope of the potential problems.

The new report indicates that changes are affecting regions differently, and in the coming years, the impacts of climate change will be even more dramatic. The IPCC forecasts that by mid-century, the annual average river runoff and water availability will increase by 10-40 per cent at high latitudes and in some wet tropical areas, while decreasing by 10-30 percent in some dry regions at mid-latitudes and in the dry tropics. The number of drought-affected areas is expected to increase, and regions that currently rely on glacier-fed rivers for their drinking water, presently providing water to about one-sixth of the world's population, will likely see reduced availability.

Dr. Sharon Hays, White House Office of Science and Technology Policy and Jim Connaughton, Chairman, White House Council on Environmental Quality held a press briefing and the briefing was released by the U.S. Department of State. Dr. Hays described the report to policymakers highlighting the following:

(1) A section of the report deals with actual observations -- actual observations in terms of climate change impacts. The summary indicates that climate change is having impacts on natural systems - so plants, animals, ecosystems, and human systems - and the example of a human system would be agriculture for example - and that scientists are able to measure and monitor these impacts that are occurring in different places around the world.

(2) A second part of the report deals with projections -- projections of the range of different impacts that scientists believe may happen in the future. These projected impacts are expected to get more pronounced at higher temperatures. Hays said not all projected impacts are negative; and for higher potential future temperatures, the range of projected impacts becomes increasingly negative and there are significant impacts that are possible.

(3) Another key message is that climate change is clearly a global challenge and requires global solutions. But most impacts of climate change will be felt very regionally. Some parts of the world are more vulnerable than others - for example, Africa, small islands, the Polar Regions and so forth. The report contains a review of discussion about going forward, what happens and the key role of adaptation. Societies are going to need to and, indeed, are able to lessen the impacts of climate change through adaptation. Not all regions of the world have the same capacity to adapt.

United Nations Secretary-General Ban Ki-moon, who said called climate change is one of his top priorities, hailed the new report and urged nations to make decisive efforts to alleviate the worst consequences brought on by global warming. He called on States which are party to the UN Framework Convention on Climate Change (UNFCCC) to act quickly to create a plan to tackle future needs in time to replace the Kyoto Protocol -- the agreement requiring 35 industrialized countries and the European Community to reduce greenhouse gas emissions which is set to expire in 2012. He voiced hope that countries will take steps towards creating a new environmental framework at the UN Climate Change Conference to be held in Bali, Indonesia, in December 3-14 (COP 13 and COP/MOP 3).

The UN’s top climate change official pointed to the potential danger of climate change triggering conflicts over water, the spread of diseases and an increase in world-wide migration unless adequate adaptation measures are developed and integrated into long-term development planning. The Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC), Yvo de Boer said, “These projected impacts tell us that we urgently need to launch an agreement on future international action to combat climate change, as well as look for effective ways to generate the funds needed for adaptation. Our current sources of funding are insufficient to cover these adaptation needs. So the international community needs to investigate new and innovative sources of finance, not least through the carbon market, in order to ensure that the most vulnerable communities are able to
cope. In many cases this financing, while addressing adaptation to climate change, will contribute to the economic and sustainable development of the communities."

U.S. Senator Barbara Boxer (D-CA), Chair of the Environment and Pubic Works Committee issued a release and said, “Here in the United States, some of these impacts are already happening, and the report makes clear they will only worsen over time. Our water supplies, particularly in the Western States, are threatened by reduced snowpack. Our forests are at increased risk from pests and fire. And the health effects of severe global warming will be most dangerous to our elderly and children... Our next step will be to call the EPA before the committee, since it is clear the EPA has the authority to regulate greenhouse gas emissions, and the agency has thus far failed to do so..." [Sen. Boxer was referring to the April 2, Supreme Court decision in Massachusetts, et al. v. EPA, (See WIMS 4/2/07)]

House Science & Technology Committee Chair, Bart Gordon (D-TN) said, "For the first time, the world’s top scientists are able to confidently attribute changes in a wide variety of ecosystems in all parts of the world to human-induced global warming. This report, a tremendous scientific achievement, delivers a powerful and sobering message about the current state of our climate system... The Working Group II report discusses impacts over a range of temperature changes in five categories: water and food availability, coastal zones, natural ecosystems and human health. Most of these impacts are negative." Gordon said his Committee would hold a hearing on the report on April 17.

Access an advance release on the IPCC Working Group II report (click here). Access the webcast of the news conference releasing the WGII report (click here). Access the 23-page WGII Summary for Policymakers (click here). Access the IPCC website for additional information (click here). Access a release from the UN Secretary (click here). Access a release from the UNFCCC (click here). Access a release of the press briefing by the U.S. State Department (click here). Access a detailed and lengthy summary of the complete WGII meeting including discussion of language changes in the final summary report from The International Institute for Sustainable Development Earth Negotiations Bulletin (click here). Access the IPCC website for additional information (click here). Access a release from Senator Boxer (click here). Access a release from Representative Gordon (click here). Access links to various media coverage of the report release (click here). [*Climate]

Fiduciary Guide To Toxic Chemical Risk

Apr 4: According to a release from the Investor Environmental Health Network (IEHN), in the wake of costly litigation, product sales bans, and reputational damage arising from asbestos, toxic materials in cosmetics and toys, and Teflon-related chemicals, U.S. investors are becoming increasingly wary of toxic chemical risks -- in products, in supply chains, and in their own portfolios. The number of companies facing resolutions dealing with toxic product risks jumped from three in 2004-2005 to 17 in 2006-2007, including 13 resolutions introduced for the ‘07 proxy season at such leading U.S. corporations as Apple, CVS, Dow, DuPont, Sears, and ServiceMaster.

In response, IEHN, which represents 20 investment organizations with $22 billion in assets under management, released the 52-page, Fiduciary Guide to Toxic Chemical Risk. The guide for institutional investors examines the financial dimensions of toxic chemical risk, including how to quantify such risk, the theory behind the danger posed by toxic chemicals to the wealth of shareholders, and a comprehensive set of action steps that can be taken by investors to translate the long-term threats and opportunities associated with toxic chemical issues into prudent portfolio stewardship.

The report is authored by Jane Ambachtsheer, Mercer Investment Consulting, Jonas Kron, Attorney at Law, Richard Liroff, Investor Environmental Health Network, Tim Little, Rose Foundation for Communities and the Environment, and Rachel Massey, Global Development and Environment Institute.

The IEHN primer for institutional investors concludes, “Researchers are increasingly detecting scores of these substances in human blood, breast milk, and amniotic fluid, and scientists are increasingly recognizing the particular vulnerability of fetuses and young children to them. These and related findings are contributing to rising awareness that the strategic choices businesses make about managing toxic chemicals in their products can have major financial consequences. As DuPont has been discovering with PFOA, a chemical used to produce Teflon and stain and grease repellants, consumers and industrial customers may abandon product lines over toxicity concerns. At the same time, liability litigation and government enforcement actions may further undermine bottom lines and reputations.”

IEHN is a collaboration of investment managers encouraging companies to adopt "safer chemicals" policies for cosmetics and other products. Members of the network are concerned that companies will be locked out of markets and suffer financial and reputational damage, if they don't systematically identify and eliminate hazardous chemicals in their products.

Access a release from IEHN (click here). Access the complete report (click here). Access the IEHN website for additional information (click here). [*Toxics]

House Investigates Honey Bee Colony Declines

Mar 29: Congressman Dennis Cardoza (D-CA), Chairman of the House Agriculture Committee’s Subcommittee on Horticulture and Organic Agriculture, held a hearing to investigate colony collapse disorder in honey bee colonies across the United States. The so-called Colony Collapse Disorder (CCD) is characterized by the sudden die-off of honey bee colonies. The cause of CCD has not been determined, and the Subcommittee heard about the situation and its impact on agriculture from scientists and bee keepers, as well as a farmer who relies on bees to pollinate his crops.

Cardoza said, “I am deeply committed to raising awareness of CCD and its impact on American agriculture. Farmers and beekeepers across the country are dependent on honey bees for their livelihoods. It is imperative that we move swiftly to get to the bottom of this, before the problem becomes even more serious. The insight and perspectives we heard in today’s hearing will be very useful as we consider the next steps in addressing this threat to honey bees, and to the livelihoods of commercial beekeepers and crop producers.”

Subcommittee Ranking Member Randy Neugebauer (R-TX) said, “Honey bee pollination is vital to flowers and many fruit, vegetable, nut and forage crops, as well as forages and flowers. In addition, pollination from honey bees increases yield and food quality and creates billions of dollars of crop value for farmers. Agriculture has a strong interest in maintaining a sound supply of pollinators, and I encourage researchers to work closely with producers to find a solution to the current colony collapse."

A March 27, Congressional Research Services (CRS) report on the subject examines the recent sharp decline in U.S. honey bee colonies or CCD. The phenomenon first became apparent among commercial migratory beekeepers along the East Coast during the last few months of 2006, and has since been reported nationwide. Honey bees are the most economically valuable pollinators of agricultural crops worldwide. Many scientists at universities and the U.S. Department of Agriculture (USDA) frequently assert that bee pollination is involved in about one-third of the U.S. diet, and contributes to the production of a wide range of fruits, vegetables, tree nuts, forage crops, some field crops, and other specialty crops. The monetary value of honey bees as commercial pollinators in the United States is estimated at about $15 billion annually.

CRS indicates that honey bee colony losses are not uncommon. However, current losses seem to differ from past situations in that: colony losses are occurring mostly because bees are failing to return to the hive (which is largely uncharacteristic of bee behavior); bee colony losses have been rapid; colony losses are occurring in large numbers; and, the reason why these losses are occurring remains still largely unknown.

At the Subcommittee hearing it was indicated that a unique aspect of CCD is that there is a significant delay in robbing of the dead colony by bees from other colonies or invasion by pest insects such as waxworm moths or small hive beetles; this suggests the presence of a deterrent chemical or toxin in the hive. It was indicated that researchers have found have found species like Aspergillus and Mucor among the fungi in CCD colonies. These fungi were previously reported to be bee pathogens in the 1930’s and are associated with toxin production; however, since that time, the fungi have been rarely of concern in bee colonies.

The CRS report indicates that another possible causes of CCD being examined, one that has become the subject of debate is whether certain chemicals or combinations of chemicals could be contributing to CCD, including some pesticides and possibly some fungicides. One class of insecticide being studied are neonicotinoids, which contain the active ingredient imidacloprid, and similar other chemicals, such as clothianidin and thiamethoxam. Honey bees are thought possibly to be affected by such chemicals, which are known to work their way through the plant up into the flowers and leave residues in the nectar and pollen.

Access a release from Representative Cardoza (click here). Access a listing of witnesses and links to testimony (click here, See March 29). Access the CRS report (click here). [*Wildlife]

DHS Security Regs For High Risk Chemical Facilities

Apr 2: The U.S. Department of Homeland Security (DHS) released an interim final rule that imposes for the first time comprehensive Federal security regulations for high risk chemical facilities. The department sought and reviewed comments from state and local partners, Congress, private industry, and the public to develop consistent guidelines using a risk-based approach. The new rule gives the department authority to seek compliance through the imposition of civil penalties, of up to $25,000 per day, and the ability to shut non-compliant facilities down. Homeland Security Secretary Michael Chertoff said, “The safety and security measures that we take need to be tough and balanced. We will significantly reduce vulnerability at high-consequence chemical facilities, taking into account important efforts in certain states.”

The department will require owners of chemical facilities housing certain quantities of specified chemicals to complete a preliminary screening assessment that determines the level of risk associated with the facility. If a chemical facility preliminarily qualifies as high risk, its owners will be required to prepare and submit a security vulnerability assessment and site security plan. Submissions will be validated through audits and site inspections. The department will provide technical assistance to facility owners and operators as needed. Security standards will be required to achieve specific outcomes, such as securing the perimeter and critical targets, controlling access, deterring theft of potentially dangerous chemicals, and preventing internal sabotage.

Covered facilities contacted by the department will have 120 days from the publication of the regulation in the Federal Register to provide information for the risk assessment process. Other requirements follow that time period. Additional facilities will follow a similar timeframe after future Federal Register publications.

Some states have existing laws for regulating chemical facilities. Only state laws and requirements that conflict or interfere with these regulations, or the purpose for the regulations, will be preempted. Currently, the department has no reason to conclude that any existing state laws are applied in a way that would impede the federal rule. DHS said that in proposing a regulation for comment and then publishing an interim final rule prior to April 4, the Department has met an aggressive timeline set by Congress. The final regulation will be published later this week in the Federal Register. Comments related only to the addition of Appendix A, DHS Chemicals of Interest, to part 27 will be accepted for 30 days after publication in the Federal Register.

Senator Frank Lautenberg (D-NJ) called the Bush Administration's new chemical security regulations "unacceptable" saying they would preempt New Jersey and other states with stronger chemical security laws from protecting their communities. He said, "This is unacceptable. It prevents New Jersey and other states from continuing to pursue stronger chemical security laws. Congress is on record supporting the right of states to protect their communities from a chemical attack. It's time for the Federal Government to follow Congress' lead and make sure our states have that right."

Last week, the Senate passed the FY 2007 Supplemental Appropriations Bill with a chemical security provision authored by Lautenberg which was strongly opposed by the American Chemistry Council (ACC). Lautenberg said his language would preserve states' rights to craft stronger chemical security laws than the Federal government, if they deem those laws necessary to protect their residents. Lautenberg said Democrats, Republicans and the National Governors Association voiced their support for his language in the Supplemental.

ACC issued a statement on the new DHS regulations saying, “The nation is safer today, thanks to landmark federal regulations that will drive enhanced security protections for America’s chemical industry. This rule is the culmination of years of hard work by members of Congress, the Department of Homeland Security and industry leaders working cooperatively to improve national security.

“For the first time, a federal agency is authorized to enforce national risk-based performance standards to ensure that chemical facilities assess security vulnerabilities and implement security plans to address them. Equally important, DHS has clear authority to inspect these facilities and apply strong penalties, including facility shutdowns, for those that fail to act. These new regulations will complement existing state programs and the significant security enhancements already undertaken voluntarily by our members to protect the chemical industry and the nation."

Greenpeace USA issued a statement saying, “The Department of Homeland Security's (DHS) new regulations on chemical plant security are too little too late. As a result, millions of Americans living as far as 20 miles from ultra-hazardous chemical plants will remain at risk until Congress enacts permanent legislation. The DHS has previously identified 4,391 chemical plants that put 1,000 or more people at risk inside chemical 'kill zones.' It remains to be seen how or when these facilities will be prioritized for the minimal fence-line security the regulations allow.

"In a clumsy attempt to lesson a confrontation with the Congress, DHS Secretary Chertoff sent a letter (April 1) to Congress claiming that the DHS narrowed their regulations barring states from setting stricter security standards. However, the new regulations continue to claim broad authority to preempt any "state law, regulation or administrative action" even though no such authority exists in the 740 word law that their regulations are based upon..." Greenpeace points out that the DHS rules are based on language in the 2007 DHS appropriations bill which it says was enacted with expectation that the next Congress would enact permanent legislation before it expires in October 2009.

Access a release from DHS (click here). Access an overview and links to the 226-page regulation and Appendix A (click here). Access a release from Senator Lautenberg (click here). Access a release from ACC with links to additional information (click here). Access a release from Greenpeace (click here). Access the WIMS eNewsUSA Blog for a history of information on the chemical facility security regulations issue (click here). [*Haz, *Toxics]

High Court Rules In Two Major Environmental Cases

High Court Rules In Massachusetts v. EPA Climate Change Case

Apr 2: In a 5-4 decision, the U.S. Supreme Court has decided what has been called an historic case about global warming (Massachusetts, et al. v. EPA, et al., No. 05-1120). Justice Stevens delivered the opinion of the Court with Justices Kennedy, Souter, Ginsburg and Breyer joining. Justice Roberts filed a dissenting opinion with Justices Scalia, Thomas, and Alito joining. Justice Scalia also filed a dissenting opinion with Justices Thomas and Alito joining.

The questions presented in the case include: (1.) Whether the EPA Administrator may decline to issue emission standards for motor vehicles based on policy considerations not enumerated in section 202(a)(1); and (2.) Whether the EPA Administrator has authority to regulate carbon dioxide and other air pollutants associated with climate change under section 202(a)(1).

In the summary for the majority, the High Court ruled, "A well-documented rise in global temperatures has coincided with a significant increase in the concentration of carbon dioxide in the atmosphere. Respected scientists believe the two trends are related. For when carbon dioxide is released into the atmosphere, it acts like the ceiling of a greenhouse, trapping solar energy and retarding the escape of reflected heat. It is therefore a species -- the most important species -- of a 'greenhouse gas.' Calling global warming 'the most pressing environmental challenge of our time,' a group of States, local governments, and private organizations, alleged in a petition for certiorari that the Environmental Protection Agency (EPA) has abdicated its responsibility under the Clean Air Act to regulate the emissions of four greenhouse gases, including carbon dioxide. Specifically, petitioners asked us to answer two questions concerning the meaning of §202(a)(1) of the Act: whether EPA has the statutory authority to regulate greenhouse gas emissions from new motor vehicles; and if so, whether its stated reasons for refusing to do so are consistent with the statute.

"In response, EPA, supported by 10 intervening States and six trade associations, correctly argued that we may not address those two questions unless at least one petitioner has standing to invoke our jurisdiction under Article III of the Constitution. Notwithstanding the serious character of that jurisdictional argument and the absence of any conflicting decisions construing §202(a)(1), the unusual importance of the underlying issue persuaded us to grant the writ. 548 U. S. __ (2006)."

The states, local governments and organizations petitioners included: California, Connecticut, Illinois, Maine, Massachusetts, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, and Washington. District of Columbia, American Samoa, New York City, and Baltimore. Center for Biological Diversity, Center for Food Safety, Conservation Law Foundation, Environmental Advocates, Environmental Defense, Friends of the Earth, Greenpeace, International Center for Technology Assessment, National Environmental Trust, Natural Resources Defense Council, Sierra Club, Union of Concerned Scientists, and U. S. Public Interest Research Group.

The intervening states and six trade associations included: Alaska, Idaho, Kansas, Michigan, Nebraska, North Dakota, Ohio, South Dakota, Texas, and Utah. Alliance of Automobile Manufacturers, National Automobile Dealers Association, Engine Manufacturers Association, Truck Manufacturers Association, CO2 Litigation Group, and Utility Air Regulatory Group.

On the "standing" issue the Majority ruled, "In sum -- at least according to petitioners’ uncontested affidavits -- the rise in sea levels associated with global warming has already harmed and will continue to harm Massachusetts. The risk of catastrophic harm, though remote, is nevertheless real. That risk would be reduced to some extent if petitioners received the relief they seek.We therefore hold that petitioners have standing to challenge the EPA’s denial of their rulemaking petition." The Majority also ruled, "Because greenhouse gases fit well within the Clean Air Act’s capacious definition of 'air pollutant,' we hold that EPA has the statutory authority to regulate the emission of such gases from new motor vehicles."

The ruling also indicates, "In short, EPA has offered no reasoned explanation for its refusal to decide whether greenhouse gases cause or contribute to climate change. Its action was therefore "arbitrary, capricious, . . . or otherwise not in accordance with law." 42 U. S. C. §7607(d)(9)(A). We need not and do not reach the question whether on remand EPA must make an endangerment finding, or whether policy concerns can inform EPA’s actions in the event that it makes such a finding. Cf. Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 843–844 (1984). We hold only that EPA must ground its reasons for action or inaction in the statute... The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion."

In his dissenting opinion Justice Roberts said, "Global warming may be a 'crisis,' even 'the most pressing environmental problem of our time.' Pet. for Cert. 26, 22. Indeed, it may ultimately affect nearly everyone on the planet in some potentially adverse way, and it may be that governments have done too little to address it. It is not a problem, however, that has escaped the attention of policymakers in the Executive and Legislative Branches of our Government, who continue to consider regulatory, legislative, and treaty-based means of addressing global climate change. Apparently dissatisfied with the pace of progress on this issue in the elected branches, petitioners have come to the courts claiming broad-ranging injury, and attempting to tie that injury to the Government’s alleged failure to comply with a rather narrow statutory provision. I would reject these challenges as nonjusticiable. Such a conclusion involves no judgment on whether global warming exists, what causes it, or the extent of the problem. Nor does it render petitioners without recourse. This Court’s standing jurisprudence simply recognizes that redress of grievances of the sort at issue here “is the function of Congress and the Chief Executive,” not the federal courts. Lujan v. Defenders of Wildlife, 504 U. S. 555, 576 (1992). I would vacate the judgment below and remand for dismissal of the petitions for review."

In his dissenting opinion Justice Scalia said, "I join the Chief Justice's opinion in full, and would hold that this Court has no jurisdiction to decide this case because petitioners lack standing. The Court having decided otherwise, it is appropriate for me to note my dissent on the merits."

Massachusetts Attorney General Martha Coakley issued a release saying, "In this case... the Court ruled that the Federal Environmental Protection Agency (EPA) has existing authority under the Federal Clean Air Act to regulate greenhouse gas emissions from motor vehicles. Greenhouse gas pollutants, such as carbon dioxide, cause the warming of the earth’s atmosphere. The EPA previously refused to regulate such gases, arguing it lacked statutory authority. The Court also concluded that the grounds the EPA gave for refusing to regulate greenhouse gases were legally insufficient, and directed the agency to reconsider its refusal based on the factors set forth in the law. Despite acknowledging that global warming poses serious dangers to our environment and health, the Bush Administration has done little or nothing to regulate greenhouse gas emissions. As a result of today’s landmark ruling, EPA can no longer hide behind the fiction that it lacks any regulatory authority to address the problem of global warming."

Dave McCurdy, president and CEO of the Alliance of Automobile Manufacturers (AAM) issued comments on the decision saying, “The Alliance of Automobile Manufacturers believes that there needs to be a national, federal, economy-wide approach to addressing greenhouse gases. This decision says that the U.S. Environmental Protection Agency will be part of this process. The Alliance looks forward to working constructively with both Congress and the administration, including EPA and the National Highway Traffic Safety Administration, in developing a national approach.”

Access the complete opinion, dissents and syllabus (click here). Access a release from the Massachusetts AG (click here). Access the statement from Environmental Defense (click here). Access a release from Sierra Club (click here). Access a release from Earthjustice (click here). Access a release from AAM (click here). Access the WIMS Special Report on the Massachusetts v. EPA Supreme Court Case for background and additional information (click here). [*Climate, *Air]

High Court Rules In Environmental Defense v. Duke Energy

Apr 2: Justice Souter delivered the opinion for the court's near unanimous decision in Environmental Defense v. Duke Energy (No. 05-848). Only Justice Thomas delivered a concurring in part opinion. In its summary of its opinion, the High Court said, "In the 1970s, Congress added two air pollution control schemes to the Clean Air Act: New Source Performance Standards (NSPS) and Prevention of Significant Deterioration (PSD), each of them covering modified, as well as new, stationary sources of air pollution. The NSPS provisions define the term "modification," 42 U. S. C. §7411(a)(4), while the PSD provisions use that word 'as defined in' NSPS, §7479(2)(C). The Court of Appeals concluded that the statute requires the Environmental Protection Agency (EPA) to conform its PSD regulations on 'modification' to their NSPS counterparts, and that EPA’s 1980 PSD regulations can be given this conforming construction. We hold that the Court of Appeals’s reading of the 1980 PSD regulations, intended to align them with NSPS, was inconsistent with their terms and effectively invalidated them; any such result must be shown to comport with the Act’s restrictions on judicial review of EPA regulations for validity."

The case involves U.S. EPA lawsuit brought against Duke Energy Corp. for failing to upgrade pollution controls when undertaking major renovations at eight coal-fired power plants. The questions presented in the case were: (1.) Whether the Fourth Circuit's decision [U.S. v. Duke Energy Corp, June 15, 2005, Case No. 04-1763, See WIMS 6/16/05] violated Section 307(b) of the Act, which provides that national Clean Air Act regulations are subject to challenge "only" in the D.C. Circuit by petition for review filed within 60 days of their promulgation, and "shall not be subject to judicial review" in enforcement proceedings, 42 U .S.C. 7607(b); and, (2. ) Whether the Act's definition of "modification," which turns on whether there is an "increase" in emissions and which applies to both the NSPS and PSD programs, rendered unlawful EPA's longstanding regulatory test defining PSD "increases" by reference to actual, annual emissions.

Justice Thomas issued a concurring in part separate opinion indicating, "I join all but Part III–A of the Court’s opinion. I write separately to note my disagreement with the dicta in that portion of the opinion, which states that the statutory cross-reference does not mandate a singular regulatory construction."

Environmental Defense President Fred Krupp issued a statement saying, "...the Court ruled that industrial smokestacks and power plants must meet today's cost-effective pollution control standards when facilities are refurbished. This is a huge win for clean air. The Court ruled unanimously that companies have to use the latest cost effective technology to reduce pollution when they upgrade their plants. This is not a legal abstraction -- it means we'll have cleaner air and less childhood asthma. We're very proud of our work in this case -- it's going to make a real difference in people's lives."

Access the complete opinion and syllabus (click here). Access the statement from Environmental Defense (click here). Access the WIMS Special Report On The Duke Energy Supreme Court Case for background and additional information (click here). [*Air]