Environment & Energy Insights

The Reemergence of the Social Cost of Carbon as an Important Policy Tool in Tackling Climate Change

Posted by Jeffrey Karp on 7/19/21 2:58 PM

By Jeffrey Karp, Senior Counsel, and Pratishtha Date, Summer Associate

In January 2021, President Biden signed an executive order "Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis."[1] This order provided a clear signal that the Biden administration was recommitting the United States to climate initiatives "guided by the best science."[2] With a renewed federal focus on addressing the climate crisis, federal agencies have been tasked with "captur[ing] the full cost[] of greenhouse gas emissions as accurately as possible" in order to engage in informed decision and policy making.[3] Consequently, agencies have been examining both old and new methods of measuring greenhouse gas emissions. One such measure that government agencies have readopted is the "social cost of carbon."

In light of this reinstatement, the Environmental Law Institute (ELI) hosted a webinar at which environmental experts discussed the social cost of carbon and its use as an analytical tool in measuring climate change.[4] Carol Jones, Ph.D., a visiting scholar at the ELI, moderated the webinar and hosted four distinguished panelists working in various areas of the environmental sphere. The panelists (in order of presentation) were Ann Wolverton, Ph.D., senior research economist at the U.S. EPA, Richard Newell, Ph.D., President and CEO of Resources for the Future, Rachel Cleetus, Ph.D., policy director and lead economist of the climate and energy program at the Union of Concerned Scientists, and Steven Rose, Ph.D., senior research economist at Electric Power Research Institute.

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New Developments Could Raise the Temperature of Climate Change Disclosure

Posted by Jeffrey Karp on 7/8/21 2:37 PM

By Jeffrey Karp, Senior Counsel; Zachary Altman, Associate; and Laura Jarvis, Summer Associate

The buzz around climate change is expanding to include the potential effects it could have on businesses’ physical operations and value in the marketplace. Climate-related business risks typically fall into two categories: physical risks (extreme weather events, changes in climate patterns that can affect physical facilities and supply chains) and transition risks (the cost of transitioning to a low-carbon economy, including reputational effects).[1] As climate change can directly and indirectly impact a company’s present value and prospects for the future, the natural question follows: should companies have to disclose a broader range of risks to the public? A bill passed in the House, a recent Biden Executive Order, and actions by the Securities and Exchange Commission ("SEC") signal that the answer to that question is shifting toward "yes."

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Topics: Climate change, Executive Orders, Securities and Exchange Commission

Another Iteration of the WOTUS Rule Likely to be Served Up Shortly

Posted by Jeffrey Karp on 6/23/21 11:44 AM

By Jeffrey Karp, Senior Counsel, and Edward Mahaffey, Law Clerk

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Topics: Environmental Protection Agency, Clean Water Act, Navigable Waters Protection Rule (NWPR), WOTUS

The Federal Reserve’s Role in Implementing President Biden’s Executive Order on Climate-Related Financial Risk

Posted by Jeffrey Karp on 6/14/21 11:47 AM

By Jeffrey Karp, Senior Counsel, and Edward Mahaffey, Law Clerk

On May 20, 2021, President Biden issued an Executive Order on Climate-Related Financial Risk. The Executive Order seeks "to advance consistent, clear, intelligible, comparable, and accurate disclosure of climate-related financial risk." According to the president, the Order is necessary due to "[t]he failure of financial institutions to appropriately and adequately account for and measure these physical and transition risks," which "threatens the competitiveness of U.S. companies and markets, the life savings and pensions of U.S. workers and families, and the ability of U.S. financial institutions to serve communities."[1] Physical risks are damages caused by an increase in the frequency or severity of weather events or other climate shifts.[2] Transition risks are more indirect; they arise from changes in policy, technology, or consumer behavior that lead to a lower-carbon economy.[3]

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Topics: Climate change, ESG, Federal Reserve, Climate-related financial risk

Supreme Court Overturns U.S. Government's Effort to Insulate Navy from Liability to Territory of Guam for Landfill Cleanup

Posted by Jeffrey Karp on 5/25/21 3:39 PM

By Jeffrey Karp, Senior Counsel, and Edward Mahaffey, Law Clerk

On May 24, 2021, in an opinion written by Justice Thomas, a unanimous Supreme Court ruled that Guam’s lawsuit against the US Navy was not barred by

CERCLA, thus restoring the Territory’s claim for recovery of costs to remediate a dumpsite the Navy had created, operated and used beginning in the 1940s.

In the case of Guam v. United States, Guam had sued the Navy in 2017 seeking cost recovery under CERCLA section 107. Alternatively, Guam sought contribution from the Navy under CERCLA section 113(f). The federal government countered that a 2004 Clean Water Act (CWA) settlement with U.S. EPA requiring that Guam pay a civil penalty, and close and cover the landfill, had resolved Guam’s liability for a CERCLA response action under section 113(f)(3)(B), thus limiting Guam to a contribution claim as its exclusive remedy under CERCLA. The government further asserted that Guam’s contribution claim was time-barred by a three-year statute of limitations and sought dismissal of the case.

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Topics: United States Supreme Court, Environmental Protection Agency, CERCLA

Committee Hearing Held on Superfund Program Reforms Sought in CLEAN Future Act

Posted by Jeffrey Karp on 5/18/21 10:24 AM

By Jeffrey Karp, Senior Counsel, and Edward Mahaffey, Law Clerk

The CLEAN Future Act (Act), introduced in its current form on March 2, 2021 by the House Committee on Energy and Commerce, is designed primarily to achieve net zero greenhouse gas emissions by 2050. Reflecting the environmental policy goals of the new administration, which Democrats in Congress are seeking to effectuate, the bill addresses a broad range of topics, including clean electricity standards, funding for electric vehicle infrastructure, building code changes, climate risk disclosure requirements, Superfund program reforms, and environmental justice initiatives.

The most recent of the Congressional hearings on the legislation was held on May 13, 2021, to address proposed reforms of the Superfund program, including backlog problems, decreased public funding for cleanups, and a heightened risk of additional releases of hazardous substances from contaminated sites due to more frequent occurrences of natural disasters. Thus, for example, the Act would require that potentially responsible parties at sites in the Superfund program provide financial assurance of their capability to cleanup such facilities, to a degree consistent with exposure to risk of additional releases of hazardous substances. The bill also would impose a 10-year deadline on the remediation of such sites with a higher risk of additional releases due to climate-related concerns.

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Topics: Superfund, CLEAN Future Act, Energy & Commerce

Guam v. U.S. - A Case of Environmental Injustice?

Posted by Jeffrey Karp on 4/27/21 3:45 PM

By Jeffrey Karp, Senior Counsel, and Edward Mahaffey, Law Clerk

President Biden has made environmental justice a cornerstone of his administration. While all government departments and agencies have a role to play, the U.S. EPA has taken on the environmental justice mantle as reflected in the 1) new Administrator’s April 7th memo to agency staff setting forth the specifics of the EPA’s renewed commitment to environmental justice; and 2) substantial funding the President is seeking from Congress for EPA equity initiatives in his proposed 2022 budget. That budget proposal also identifies the Environment and Natural Resources Division within the Department of Justice (DOJ) to receive funds to engage in equity initiatives. To highlight this enhanced role, it even has been suggested that "Environmental Justice" be added to the DOJ Division’s name.

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Topics: United States Supreme Court, Department of Justice, Environmental Protection Agency, CERCLA

U.S. EPA Fast-Tracking Implementation of Environmental Justice Initiatives

Posted by Jeffrey Karp on 4/13/21 3:23 PM

By Jeffrey Karp, Senior Counsel and Edward Mahaffey, Law Clerk

A cornerstone of the Biden Administration is environmental justice, which EPA defines as "the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation and enforcement of environmental laws, regulations and policies."

On April 7, EPA Administrator Michael Regan sent an email to all agency staff discussing the agency’s renewed commitment to environmental justice, and included four specific directives to all EPA offices. The first directive is stronger "enforcement of violations of cornerstone environmental statutes and civil rights laws in communities overburdened by pollution." (The memo does not identify what Mr. Regan considers "cornerstone environmental statutes" or which civil rights laws over which the EPA has enforcement authority.) The second is immediate incorporation of environmental justice considerations into the work of all EPA offices, "including assessing impacts to pollution-burdened, underserved, and Tribal communities in regulatory development processes and considering regulatory options to maximize benefits to those communities." The third directive involves "early and more frequent engagement with pollution-burdened and underserved communities affected by agency" actions, including regular consultation with Tribal officials. Finally, the email states that EPA offices should "consider and prioritize direct and indirect benefits to underserved communities in the development of grant applications and in making grant award decisions, to the extent allowed by law." Regan also noted that he and the rest of EPA’s senior leadership would establish more detailed plans and "measures of accountability" for environmental justice over the next few months.

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Topics: Environmental Protection Agency, Environmental Law, Environmental Justice

Supreme Court to Again Consider the Interplay Between a CERCLA Cost Recovery and Contribution Action

Posted by Jeffrey Karp on 4/2/21 9:24 AM

Written by Jeffrey Karp, Environment, Energy and Natural Resources Group Leader, and Edward Mahaffey, law clerk.

Liability for clean-up of hazardous substances pursuant to the Comprehensive Response, Compensation and Liability Act of 1980 ("CERCLA," "Act" or "Superfund") can be extremely costly, amounting to hundreds of millions of dollars. Under CERCLA’s broad liability net, the United States Environmental Protection Agency ("EPA") can obtain reimbursement of response costs from or require potentially responsible parties ("PRPs")[1] to conduct response actions to address releases or threatened releases of hazardous substances from a facility. See 42 U.S.C. § 9607(a); 42 U.S.C. § 9601(9)(B).

Although CERCLA does not specify the liability standard in government cost recovery cases under Section 107, most courts have accepted the application of strict, joint and several liability for PRPs who cannot prove divisibility of the harm they caused from the total harm. See O’Neil v. Picillo, 883 F.2d 176, 178-79 (1st Cir. 1989) ("The rule adopted by the majority of courts, and the one we adopt, is based on the Restatement (Second) of Torts: damages should be apportioned only if the defendant can demonstrate that the harm is divisible."). In Burlington Northern & Santa Fe Railway Co. v. United States, 556 U.S. 599 (2009), the U.S. Supreme Court recognized apportionment as a judicially created affirmative defense to joint and several liability under CERCLA. It instructed the lower courts to follow the Restatement (Second) of Torts § 433A in determining whether harm is divisible in any specific case, which occurs when "there is a reasonable basis for determining the contribution of each cause to a single harm." 556 U.S. at 614. The burden of proof, however, is placed on defendants to establish that such a reasonable basis exists. See Restatement (Second) of Torts § 433B(2); Burlington Northern at 617 (there must be "facts contained in the record reasonably support[ing] the apportionment of liability."). The practical effect of placing the burden on defendants to prove divisibility is that responsible parties rarely escape joint and several liability, which means that any one PRP may be held responsible for the entire cost of a cleanup. See Guam v. U.S., 950 F.3d 104, 107 (D.C. Cir. 2020).

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Topics: United States Supreme Court, Environmental Protection Agency, CERCLA

U.S. EPA's Interim Guidance on PFAS Destruction and Disposal Lacks Adequate Precision

Posted by Jeffrey Karp on 1/20/21 1:31 PM

Authors: Jeffrey Karp and Edward Mahaffey, Sullivan & Worcester LLP; Graham Ansell, PhD and Brett Winters, PhD, GSI Environmental, Inc.

Section 7361 of the National Defense Authorization Act ("NDAA") for Fiscal Year 2020 requires the US Environmental Protection Agency (EPA) to "publish interim guidance on the destruction and disposal of perfluoroalkyl and polyfluoroalkyl substances and materials containing perfluoroalkyl and polyfluoroalkyl substances," reflecting increasing concern about the human health risks posed by these substances, commonly known as PFAS. On December 18, 2020, the EPA issued the interim guidance document, on which it will accept public comments until February 22, 2021.[1] However, as discussed below, the guidance appears to be prematurely issued, given EPA’s uncertainty throughout in advising on the likely efficacy of various PFAS disposal and destruction methods.

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Topics: EPA, PFAS

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The Environment & Energy Insights blog analyzes developments in the law, as well as provides updates and perspectives on trends and polices.

The material on this site is for general information only and is not legal advice. No liability is accepted for any loss or damage which may result from reliance on it. Always consult a qualified lawyer about a specific legal problem.

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