Climate Change Report : Climate Change Lawyer & Attorney : K&L Gates Law Firm : Global Climate Law, Carbon Emissions

By Fred M. Greguras (Palo Alto), Michael J. O'Neil (Washington, D.C.), and Chenhao Zhu (Palo Alto)

The clean technology business sector has become very important to China’s economy. As the U.S. is still a leader in clean technology innovation, the recent sector shakeout makes strategic business or asset targets in the U.S. attractive to Chinese companies. Controlling interests in a number of U.S. solar project developers with project pipelines have already been acquired by foreign solar module companies. The federal government's Exon-Florio review process is a significant planning consideration for any Chinese company looking to complete transactions in the U.S.

This article provides an overview of the Exon-Florio review process, the timeframe for decision-making and practical guidance for Chinese companies considering transactions in the U.S. While the focus is on the clean technology sector, the guidance is applicable to other business sectors as well.

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by Lawrence Patent (Washington, DC) 

The Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) recently published proposed regulations that would further define the term “swap” under the Commodity Exchange Act, as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). 76 Fed. Reg. 29818 (May 23, 2011). 

Three items therein may be of particular interest to energy companies. With respect to the forward contract exclusion from the definition of “swap,” the CFTC stated that it would interpret this provision consistent with its historical interpretation of the forward contract exclusion from the definition of the term “future delivery.” Further, book-out transactions in nonfinancial commodities that meet the requirements of the CFTC’s 1990 “Brent Interpretation,” and that are effectuated by a subsequent, separately negotiated agreement, also will qualify for the forward contract exclusion from the swap definition.

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Following extensive consultations with industry participants, the French Government enacted three new decrees on March 4, 2011 following the initial announcement by the French Prime Minister, François Fillon, of the new regulatory framework on February 23, 2011.

Those decrees have drastically redesigned the solar subsidies framework and will affect both businesses and investments in this sector. The main changes concern medium-sized and large installations, and involve a purchase price cut and a soft cap of 500 MW per year for new installation applications.

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By Martin E. Garza (Dallas)

President Obama has proposed new efforts to make commercial buildings more efficient through his “Better Buildings Initiative” (BBI ). The BBI includes a variety of tools, including tax incentives, loan guarantees, streamlining of regulations and other measures, to further energy efficiency in buildings. If these initiatives move forward, owners and managers of offices, stores, schools, municipal buildings, universities, hospitals, and other commercial buildings may be looking at energy saving upgrades to their facilities. Some industry groups are beginning to line up in support of this initiative, while others may be less than enthusiastic about how such measures would be adopted and implemented.

Outline of the Better Buildings Initiative
According to the White House, in 2010 commercial buildings consumed roughly 20 percent of all energy in the U.S. economy. The Environmental Protection Agency estimates that about 30 percent of energy in buildings is used inefficiently or unnecessarily. Improved energy efficiency in buildings can “create jobs, save money, reduce our dependence on foreign oil, and make our air cleaner,” claims the White House.

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By Cliff L. Rothenstein (Washington, DC), David A. Franchina (Charlotte), Michael W. Evans (Washington, DC) and Cindy L. O'Malley (Washington, DC).

On February 21, 2011, in response to a court order, EPA issued four related rules to control hazardous air pollutants from new and existing industrial, commercial, and institutional boilers and process heaters and from commercial and industrial solid waste incinerators.  The four rules are: the Boiler MACT, Area Source Boiler rule, Commercial and Industrial Solid Waste Incinerators (CISWI), and the Solid Waste rule.

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By Steve Rhyne (Charlotte), as published in Charlotte USA -- The New Energy Capital blog

A year ago as we approached the first Energy Inc. symposium in Charlotte, we were engaged in a serious dialogue, both nationally and here in Charlotte, about the need for policy and regulatory certainty to support our energy industry’s growth.

The need for such certainty was underscored at the symposium by the chief executives who comprised the symposium’s CEO panel. Today, the lack of a national energy policy, including with regard to carbon regulation, continues to significantly hinder the long-term planning for developing our energy infrastructure...

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About the Charlotte USA blog: Charlotte USA is the nation's New Energy Capital. The region's 240+ electric, gas, engineering, alternative energy, research and educational resources create a vibrant hub of energy ideas. The region has more than 26,000 energy-oriented employees advancing the nation's energy future every day. This blog is devoted to discussions about where our nation is today in energy, and where we can go in our energy evolution.

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by Michael W. Evans (Washington, DC), Cliff L. Rothenstein (Washington, DC) and Cindy L. O'Malley (Washington, DC).

This article is an excerpt from K&L Gates' Global Government Solutions 2011 Annual Outlook, which contains informative articles on some of the most consequential government developments that we anticipate in 2011 across a range of substantive areas.

Efforts in the United States to regulate greenhouse gas (“GHG”) emissions date back to 1998, when the former general counsel of the U.S. Environmental Protection Agency (“EPA”) concluded that GHG emissions were pollutants under the Clean Air Act and could be regulated. A year later, a group of organizations petitioned EPA to regulate GHG emissions from new motor vehicles. In 2003, EPA denied the petition, which was challenged by Massachusetts, among others, in litigation that ultimately was decided by the U.S. Supreme Court.

In 2007, the U.S. Supreme Court found that the EPA had the authority under the Clean Air Act to  regulate GHG emissions. In 2009, the EPA issued an “endangerment finding” under the Clean Air Act that GHG emissions from new motor vehicles may endanger public health or welfare. This finding required EPA to issue GHG emissions standards for light-duty motor vehicles, and it also triggered the need for other regulations, including GHG permitting standards, the installation of best Available Control Technology (“BACT”) for controlling GHG from new or modified stationary sources, and New Source Performance Standards (“NSPS”) for GHG emissions.

As the 112th Congress kicks off and the new House majority is set to begin intensive oversight of  EPA rules, EPA recently took two significant actions that will affect the schedule for issuing GHG regulations...

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by Christopher Tung (Hong Kong) and Vanessa C. Edwards (London).

This article is an excerpt from K&L Gates' Global Government Solutions 2011 Annual Outlook, which contains informative articles on some of the most consequential government developments that we anticipate in 2011 across a range of substantive areas.

In 2008, the European Commission took the major step of including aviation in the European Union Emissions Trading Scheme (EU ETS) from 2012. This unprecedented action created controversy between the EU regulator, the aviation industry and states as to the legality of the extension of the EU ETS to aviation and the best approach to regulate aviation emissions. The International Civil Aviation Organization (ICAO), the United Nations agency responsible for International civil aviation, has led key aviation industry efforts to advocate coordinated actions against climate change.

At the Sixteenth Conference of the Parties of the United Nations Framework Convention on Climate Change (COP-16) held in Cancun from November 29, 2010 to December 10, 2010, the aviation industry put forward, through ICAO, the consolidated statement of continuing ICAO policies and practices related to environmental protection – climate change.

The main thrusts of the ICAO submission at Cancun were (i) to reiterate the determination of ICAO member states to continue to play a leading role in global efforts to address climate change by working through ICAO to limit or reduce greenhouse gas (GHG) emissions from international aviation and (ii) to outline ICAO Assembly Resolution A37-19 of October 2010 (A37-19). Highlights of Resolution A37-19 include...

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by Olivia Lê Horovitz (Paris) and François Lan (Paris)

This article is an excerpt from K&L Gates' Global Government Solutions 2011 Annual Outlook, which contains informative articles on some of the most consequential government developments that we anticipate in 2011 across a range of substantive areas.

As France continues to develop its renewable energy industry and struggles to recover from the global economic crisis, we expect to see a number of trends in 2011 affecting both businesses and investments in this sector.

Since the 2007 “Grenelle de l’environnement” conference, France has adopted an  ambitious strategy for developing renewable energies. The conference brought together representatives of the central government, local authorities, trade unions, businesses and nonprofit organizations for the purpose of developing a concrete action plan to tackle environmental issues. The conference participants recognized that renewable energies (such as wind and solar power) were underdeveloped in France and called for the French government to stimulate this sector... 

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by Cliff L. Rothenstein (D.C), Michael W. Evans (D.C), Cindy L. O'Malley (D.C)

The 112th Congress, which kicked off on January 5th, has a vastly different makeup and profile than the just completed 111th Congress.  A new, more conservative Republican House majority, with a new Speaker, new committee chairmen anxious to make their mark, new Tea Party members, coupled with a more liberal House minority due to the defeat of 20 plus so-called Blue Dogs and longtime fixtures of the likes of Ike Skelton, John Spratt and Jim Oberstar, may make for a rather polarizing couple of years.  

In the Senate, the leadership and committee chairmen and composition will look very similar to the last Congress.  But with the Democrats holding only a razor thin majority, overcoming real or threatened filibusters will continue to be a challenge.  

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By Cliff L. Rothenstein (D.C.), Michael W. Evans (D.C.), Cindy L. O'Malley (D.C.)

As the 112th Congress kicks off and the new House majority is set to begin intensive oversight of EPA rules, two significant actions occurred that will affect the schedule for issuing greenhouse gas (GHG) regulations. These actions will ultimately affect the level of GHG emissions controls that will be required at power plants and other large stationary sources. 

The first action goes into effect on January 2, 2011, requiring that permits issued under the Clean Air Act for large stationary sources begin to address GHG emissions as well as require Best Available Control Technology (BACT) to control these emissions.   To prepare for this requirement the EPA issued a series of rules on December 23, 2010 to (1) narrow the permitting requirement so facilities with GHG emissions below the levels set in the tailoring rule do not need permits and (2) to give EPA authority to issue GHG permits in states that need to revise their permitting regulations to cover GHG emissions.  In a related action, the U.S. District Court of Appeals for the District of Columbia granted an emergency stay order, blocking EPA from issuing permits in Texas. 

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By Fred Greguras (Palo Alto) and Charles Purcell (Seattle).

The Section 1603 cash grant program was extended through December 31, 2011 as part of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 which was signed into law on December 17, 2010 (the "2010 Tax Act"). The cash grant was the most important policy for driving renewable energy growth in the United States during 2009 and 2010. The 2010 Tax Act also created another important incentive for renewable energy project finance for 2011 -- 100% bonus depreciation.

These incentives will stimulate investment in renewable energy projects in 2011. The cash grant extension will strengthen job creation in the construction and operation of renewable energy projects and the bonus depreciation could cause significant investment in manufacturing plants in a number of business sectors which could also result in many new jobs.

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by Stephen K. Rhyne (Charlotte)

Uncertainty seems to pervade almost any discussion of climate change and its consequences. This is especially true when discussing climate change legislation and regulation.

Notwithstanding, the Securities and Exchange Commission (SEC) in January sought to bring some clarity to the question of whether climate change and its consequences, including pending legislative and regulatory proposals, are appropriate matters of disclosure for public companies. In its detailed interpretive release, the SEC sets forth the analytical framework and process for a public company to follow in determining whether climate change and its consequences are to be disclosed in the company’s public filings.

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By Edward P. Sangster (San Francisco)

A tsunami is a wave that washes over lands far distant from the geological event that caused it. So it will be with California's "Regulations for Safer Products," which will shortly be released for public comment. These regulations will have far reaching impacts in markets throughout the United States and beyond.

The Green Chemistry Initiative
The Regulations for Safer Products will comprise one part of California's Green Chemistry Initiative. The Green Chemistry Initiative surfaced in April 2007 as a directive from the Secretary of California’s Environmental Protection Agency to its subsidiary agencies and boards. The Green Chemistry Initiative was described at the time as a "preemptive strategy to stop toxic substances before they contaminate the environment and our bodies." The Secretary directed agencies to place new emphasis on enforcing existing statutes and regulations, and to develop new regulations focused on eliminating exposures, rather than regulating wastes.

The official motto for the Green Chemistry Initiative succinctly, if quixotically, states its ultimate goal: "cradle to cradle" regulation.  The motto signifies the intention of California regulators to compel the design of chemical products and processes that will reduce or eliminate the use of hazardous substances and the generation of hazardous wastes. 

In 2008, the California Legislature empowered the Green Chemistry Initiative by enacting Assembly Bill ("AB") 1879. AB 1879 requires California's Department of Toxic Substances Control ("DTSC") to enact regulations by January 1, 2011 to identify Chemicals of Concern in consumer products, and then to impose life cycle regulation on consumer products containing such chemicals...

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Authored by Tim L. Peckinpaugh (Washington, D.C.)

With this spring’s passage of landmark healthcare legislation and the likely enactment this summer of the financial reform bill, the White House is looking for a third legislative victory with the passage of comprehensive climate change and clean energy legislation. Much like horse racing, however, the odds of achieving this legislative trifecta are exceedingly small.   

Climate change is a vexing legislative issue that has become increasingly complex and politically problematic. The failure to produce a binding agreement at the Copenhagen conference late last year highlights the intricate politics that permeate the climate change debate. These same politics have largely stymied Congress and the White House in moving forward on “cap and trade” legislation.

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By Fred Greguras (Palo Alto).

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By Barry M. Hartman (Washington, DC), Mark Ruge (Washington, DC), Susan B. Geiger (Washington, DC) and Stephen P. Roberts (Washington, DC).

 

Why is this study important?

In an apparent major step forward toward performance-based regulation of vessel discharges, the Environmental Protection Agency (EPA) has sent to Congress a draft report on the discharges from fishing vessels of all sizes and non-recreational vessels less than 79 feet in length. 

In December 2008, the EPA issued its first Vessel General Permit (VGP), which regulated the discharge of everything from deck runoff to chain effluent on large commercial cargo and tankers.[1] At the time, fishing vessels and non-recreational vessels under 79 feet were exempt, pending a further study.[2] Unlike when EPA issued its requirements for the VGP,[3] the EPA conducted its own testing of discharges from these currently exempt vessels to provide a foundation for Congress to determine whether to continue a two-year moratorium from VGP requirements on discharges for fishing vessels and these smaller vessels. 

What does the study say?

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Authored by Tim L. Peckinpaugh (Washington, D.C.)

As the historic climate change conference in Copenhagen comes to a close, much of the world’s attention will return to the U.S. Congress, and whether comprehensive climate change legislation will be enacted as a sign of American resolve to tackle this vexing issue.

The dramatic story unfolding in Copenhagen highlights the intricate politics that permeate the climate change issue. These same politics will be on display again when the Congress returns to grapple with climate change “cap and trade” legislation next year.

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Written by Akilah Green (Washington, DC)

The impact that the Copenhagen Accord will have on the global effort to reduce greenhouse gas emissions remains uncertain just two days after the Copenhagen talks have concluded.   Many observers believe that the United States' participation in the global effort to mitigate the effects of climate change hinges on the passage of legislation that will mandate U.S. efforts to reduce greenhouse gas emissions.  Thus, following Copenhagen, the world has now shifted its attention to the U.S. Congress.  The House of Representatives passed its comprehensive climate change bill in June.  President Obama's next step is to push climate change legislation through the United States Senate.  See below a few articles that I found most interesting.

Is the Copenhagen Agreement a Disappointment or Relief?
From Greenbiz.com

The climate treaty announcement is legitimately catching some heat for being too little, too late. The enormity of the crisis cries out for strong binding pollution reduction targets by all countries and massive infusions of public and private capital to catalyze a fast-track transition to a low-carbon economy...Read More

Climate Accord In Hand, Obama Turns To Senate
From npr.org

President Obama returned to the White House from the U.N. Climate Conference in Copenhagen in the wee hours of the morning, having secured a modest, nonbinding, three-page deal aimed at combating global warming...Read More

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Where are we now?

The political and economic changes of the last 15 years have brought into question some of the basic principles on which the Kyoto Protocol is based. The challenge faced by negotiators at Copenhagen can be summed up by contrasting the position between the United States and China. The United States is the largest emitter of GHG on a per capita basis while China has the highest overall emissions. Negotiators need to achieve an outcome that will curb greenhouse gas emissions while allowing developing nations to grow their economies without damaging the economies of the developed nations. This challenge has caused a roadblock in negotiations between the parties in the run-up to Copenhagen.

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Written by Patricia Tiller, Paul de Cordova, Neal R. Brendel.

This alert is a description of the main elements of the law newly issued by the UAE regarding the peaceful uses of nuclear energy.

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Written by Dr. Christian Hullmann (Berlin) and Mirko Zorn (Berlin).

Being "green" has never had a higher profile. Under the German Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz - EEG) producers of electricity from renewable energy sources are entitled to compensation for electricity fed into the grid. The grid system operator must accept all respective offers and pay a fixed price guaranteed under the law. For almost every kind of green energy the guaranteed price is higher than the market price.

The advantage is obvious: Producers of green energy and investors in this market segment can rely upon such prices and find a sound base to calculate investments on.

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