While it is unlikely that the 113th Congress will take any action on climate change (especially not in advance of the November 2014 elections),  many major public companies aren’t waiting for Congressional action and are instead proactively beginning to factor internal carbon pricing into their business decisions.  According to a new report issued by the CDP, 29 major companies in the United States already incorporate a carbon price into their business planning and risk management strategies. Of the 2,100 companies surveyed throughout the world, 638 companies have disclosed that regulations related to carbon pricing (cap-and-trade & carbon taxes) present opportunities for their businesses (although companies in heavy emitting countries and industries continue to report that they feel competitively disadvantaged by carbon pricing). Moreover, 500 of these surveyed companies reported that they are already regulated and price carbon through global carbon markets.  Nearly a fifth of these are U.S.-based companies.    

Another interesting observation that can be gleaned from the CDP report is the significant variability in the price that companies are setting per ton of carbon.  For example, in North America, the price per ton ranges from $8-$80; in Europe, the price per ton ranges between $15-$324. The variability can be explained, at least in part, on the regulatory regime where those companies are operating.  For example, companies operating in California are estimating carbon prices on the basis of California’s cap and trade program which prices carbon at between $14-$15 per metric ton. Companies that primarily operate in Europe rely more upon Europe’s Emissions Trading Scheme, although the current price per metric ton under the EU ETS (£6 per metric ton) is significantly lower than the above-referenced range so these companies are obviously projecting a higher price per ton in the future.  

During last week’s United Nations Climate Summit, many governments and  companies also expressed support for establishing a price for carbon emissions. The World Bank identified many countries, states, provinces and cities, as well as over 1,000 businesses and investors that were in favor of carbon pricing.  The CDP report  noted that “[c]ompanies in the US and worldwide are already advanced in their use of carbon pricing.  They are ahead of their governments in planning for climate change risks, costs and opportunities. These companies want, and are calling for, clear pricing and regulatory certainty to help them plan their climate-related investments, and they want to see more certain, internationally linked carbon markets.”  

Regardless of what side of the climate change debate one embraces, what is clear is that the business community has already made a decision to incorporate climate change related risks into its business strategy decision making.  For those of us that represent the business community, it probably would be a good idea to get on the train or be left at the station.    

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Categories: Climate Change

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On June 25, 2013, in a speech at Georgetown University, President Obama unveiled his Climate Action Plan (CAP) which sidesteps Congress and instead focuses on executive branch action, and more specifically, U.S. EPA action in an effort to reduce greenhouse gas (GHG) emissions.  As part of the CAP, the President recommitted the United States to reduce greenhouse gas (GHG) emissions by 17% below 2005 levels by 2020 (but only if all other major economies agree to similarly limit their GHG emissions).  In an effort to meet this commitment, the CAP targets, at least in part, GHG emissions from new and existing power plants.  

More specifically, in the CAP, the President directs U.S. EPA to promulgate regulations that limit GHG emissions at existing power plants. The CAP also directs U.S. EPA to re-propose New Source Performance Standards (NSPS) for newly constructed power plants. U.S. EPA had previously issued proposed NSPS rules in April 2012; however, U.S. EPA had missed its one-year deadline for issuing a final NSPS for new coal- and natural gas-fired utilities.  

Other key elements of the President’s CAP include: 

An end to public financing of coal-fired power plants abroad that do not include carbon capture and sequestration technology, except in developing nations where no viable alternatives exists; 
Setting a target for the Department of Interior to double renewable energy production on public lands (from 10 gigawatts to 20 gigawatts) by 2020; 
Directing federal agencies to streamline the siting, permitting and review process for electricity transmission projects; 
Directing U.S. EPA and the Department of Transportation to work on a second round of heavy-duty vehicle emission limits for post-2018 model years; 
Making available up to $8 billion in loan guarantees for advanced fossil energy projects that are intended to avoid, reduce, or sequester anthropogenic emissions of GHGs; 
Directing federal agencies to ensure that new roads and other taxpayer-funded projects are built to withstand extreme weather events and anticipated rising sea levels; 
Establishing a new energy efficiency standards goal for consumer products; 
Efforts to craft a free trade agreement on environmental goods and services that will seek to lower tariffs and other market barriers; 
Initiatives to curb emissions of hydrofluorocarbons and methane; and 
Directing agencies to focus on the impacts of climate change in key sectors, including health, transportation, food supplies, oceans and coastal communities and implement strategies to mitigate the impact of climate change on these key sectors. 

Both sides of the debate have weighed in on the CAP.  Not surprisingly, the coal industry is critical of the CAP, with the American Coalition for Clean Coal Electricity noting that “taking American’s most significant source of electricity offline would have disastrous consequences for our nation’s economy.”  On the other side of the fence, the Natural Resources Defense Council applauded the President, stating “the President’s commitment to set the first-ever carbon limits on power plants is an important first step … to protect Americans and future generations from the dangerous pollution fueling climate change.”  However, notwithstanding the diatribe from both sides of the debate, climate change doesn’t seem to be a priority for the average U.S. citizen.  Although a recent Pew Research Center poll of 37,000 respondents in 39 countries identified climate change and fiscal volatility as top global threats, in the United States, only 28% of Americans think climate change should be a top priority for the Administration.  It will be interesting to see if the President is able to convince the average citizen that climate change is an important issue that needs to be addressed, especially if the President’s CAP results in increased utility bills.    

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Categories: Climate Change | Environmental Law

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It is a fairly well established rule that CERCLA does not provide for the recovery of personal injury damages; rather, CERCLA is intended to govern the remediation of contaminated sites.  Many states have passed their own mini-CERCLA regulations which also are intended to address the remediation of contaminated sites.  

The Florida mini-CERCLA is no exception.  The private party provision of the statute provides that “[n]otwishstanding any other provision of law, nothing contained in [the statute] prohibits any person from bring a cause of action in a court of competent jurisdiction for all damages resulting from a discharge or other condition of pollution….”  Fla. Stat. § 376.313(3).  The statute further provides that the only defenses to an action brought pursuant to this section are the typical CERCLA defenses such as act of war, act of god, act or omission of a third party, etc.  Fla. Stat. § 376.308.  

On its face, and as would typically be the case for a state mini-CERCLA statute based upon the federal CERCLA statute, the Florida legislature likely intended that the statute be used to allow private parties to recover for property damage caused by the releases of hazardous substances into the soil and/or groundwater.  However, a 1990 Florida appellate court decision held that the statute applied to an action by a former employee against its employer to recover for personal injuries allegedly suffered by exposure to hazardous substances in the workplace.  Cunningham v. Anchor Hocking Corp., 558 So.2d 93 (Fla. 1st DCA 1990).  The Cunningham court also noted, in dicta, that workers’ compensation immunity was not one of the listed defenses, which of course it wouldn’t have been since the statute was never intended to allow for the recovery of personal injury damages.  

Following Cunningham, things were relatively quiet in Florida for almost a decade and a half.  However, in the past year, there have been a number of toxic tort lawsuits filed in Florida state courts that seek to recover for personal injuries under Florida § 376.313.  In these lawsuits, Plaintiffs seek to recover from current and former owners and operators of contaminated sites for personal injuries allegedly caused by exposure to hazardous substances released into the groundwater, soil or air.  A troubling issue in these lawsuits is that many of the plaintiffs are former employees.  Since workers’ compensation immunity is not specifically listed as an enumerated defense under the statute, these employee-plaintiffs are using the statute to make an end run around the Florida workers’ compensation statute in an effort to recover for injuries allegedly suffered in the course of their employment.  

The issue of whether Florida’s mini-CERCLA statute can be used as a vehicle for the recovery of personal injury damages and whether workers’ compensation immunity is an applicable defense to such claims are issues that have not yet been (but are soon likely to be) addressed by the Florida Supreme Court.  The implications of how the Florida Supreme Court resolves this issue will be significant for owners and operators (current and former) of contaminated sites in Florida.  There is also a concern that this could spill over into other states.  State mini-CERLCA statutes are often not as carefully drafted as the federal CERCLA statute (to the extent one believes that the federal statute was carefully drafted).  If plaintiffs are successful with this theory in Florida, it remains to be seen whether these types of claims spread.  

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Categories: Personal Injury

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