Development Law News
Update 09/30/09 The Boxer-Kerry bill introduced at the press conference this morning – also known as Clean Energy Jobs and American Power Act – dropped the provision requiring the EPA Administrator to promulgate standards for aircraft and aircraft engines. Instead, it includes a more general provision that
. . . the Administrator may establish provisions for
…
I. Introduction
In the grand scheme of things, aviation may not represent a huge source of concern with respect to climate change. But neither should the aviation industry (airports included) ignore the fact that aviation does contribute to climate change not only through the emission of carbon dioxide (CO2) but also through the emission of nitrogen oxides (NOx), aerosols and their precursors (soot and sulfate), and increased cloudiness in the form of persistent linear contrails and induced-cirrus cloudiness. The intent of this series of articles is to examine the effect aviation has on climate change, outline the regulatory and legal framework that is developing, and to suggest avenues for the aviation industry to pursue in the future. The first challenge is to clear up some misconceptions about aviation and climate change so that we can move forward with accurate and up-to-date information.
II. Some Facts About Aviation and Climate Change
In Aviation and Climate Change: the Views of Aviation Industry Stakeholders, the aviation industry makes several claims regarding the impact aviation has on climate change. First, the industry claims that “over the past four decades, we have improved aircraft fuel efficiency by over 70 percent, resulting in tremendous savings.” As a result, the industry continues, “given the significance of fuel costs to the economic viability of our industry, our economic and environmental goals converge.” Second, the industry claims that “because of our aggressive pursuit of greater fuel efficiency, greenhouse gas (GHG) emissions from aviation constitute only a very small part of total U.S. GHGs, less than 3 percent.” However, in order to assist the industry in its obligation “to further limit aviation’s greenhouse gas footprint even as aviation grows to meet rising demand for transportation around the world,” those claims of progress need to come under a microscope.
A. Contribution of Aviation to Climate Change Remains Subject to Debate
First, how much aviation contributes to climate change is still up to debate. Several governmental and aviation industry organizations have been reporting a “less than 3%” number for quite some time while environmental groups, particularly in Europe, claim that the percentage is anywhere from 5 to 9%. In examining the claims and counterclaims concerning emissions of GHG, one has to be very careful about the language and the metrics used in determining the “impact” any given industry will have on “climate change.” Many reports and studies focus only on CO2, since the amount of CO2 produced both naturally and by humans is overwhelming. However, as just about everyone knows by now, there are other gases and anthropogenic actions that exacerbate climate change. For example, the U.S. EPA recently proposed regulations that would require major emitters of six “greenhouse gases” to report their emissions to the EPA on an annual basis. Those six greenhouse gases are: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulfur hexafluoride (SF6), hydrofluorocarbons (HFCs), perfluorochemicals (PFCs), and other fluorinated 20 gases (e.g., nitrogen trifluoride and hydrofluorinated ethers (HFEs)). It also should be kept in mind when discussing climate change, especially with respect to aviation, that water vapor is estimate contribute anywhere from 36% to 72% of the greenhouse effect. This is important because the radiative forcing effect of cirrus cloud formation from the aircraft is a significant contributor to the greenhouse effect. As pointed out above, it is generally accepted that for aviation the GHGs of concern are CO2, nitrogen oxides (NOx), aerosols and their precursors (soot and sulfate), and increased cloudiness in the form of persistent linear contrails and induced-cirrus cloudiness.
John M. Broder, a columnist for the New York Times, writes that:
The changing global climate will pose profound strategic challenges to the United States in coming decades, raising the prospect of military intervention to deal with the effects of violent storms, drought, mass migration and pandemics, military and intelligence analysts say.
Such climate-induced crises could topple governments, feed terrorist movements or destabilize entire regions, say the analysts, experts at the Pentagon and intelligence agencies who for the first time are taking a serious look at the national security implications of climate change.
Against this backdrop, the U.S. Senate Committee on Environment and Public Works held hearing on Thursday, August 6, 2009, on the climate change bill currently under consideration by Senate after being passed by the House earlier this summer. According to Chairman Barbara Boxer (D-Cal.), "the hearing will focus "on ensuring that America leads the clean energy transformation as we address the threat posed by climate change.
The battlelines were drawn in the opening statements. The Democrats emphasized the national security aspects of the failure of the United States to address climate change adequately. Sen Lautenberg (D-N.J.) said in his opening remarks:
We have also heard from our military leaders that global warming is a serious threat to our national security. As many as 800 million people are going to face water and cropland scarcity in the next 15 years, setting the stage for conflict and breeding the conditions for terrorism.
These sentiments were echoed by Sen. Cardin (D-Md.) who stated that addressing climate change was "important for national security."
The Republicans seemed to acknowledge the fact that movement on climate change is necessary, but that the energy policy of the United States should focus first and foremost on the economy. This resulted in Sen. Bond (R-Mo.) calling for off-shore drilling for natural gas and oil, Sens. Voinovich (R-Ohio) and Alexander (R-Tenn.) calling for more nuclear energy, and all of them calling for "Clean Coal," describing the United States the "Saudia Arabia" of coal. Nuclear energy, in particular because of its "no carbon emissions," is high on the Republican’s agenda.
The basic issue between the two parties seems to be this: the Republicans believe that the status quo should be protected, because the alternative proposed by the Democrats is too costly and uncertain. The Democrats, on the other hand, believe that while the costs will be high in some sectors, other sectors will pick up the slack. While Sen. Voinovich is correct that the economy must be protects, Sen. Whitehouse (D-R.I.) is also correct in stating that to
move the government’s hands in a way that supports a better clean energy future is not a distrubance in the "state of nature" . . . it’s actually making better decisions with the same power we use now.
Panel One: Views From the Obama Administration
Putting aside for the moment the prepared testimony by the witnesses, the nuclear question was addressed through a question from Sen. Boxer to panel by stating "under the analysis of the House Bill, 161 new 1000 megawatt nuclear power plants would result from that bill." The panelists confirmed that the cap-and-trade system sets up the market mechanisms that would allow the power and energy companies to move forward with the development of nuclear power plants in addition to solar and wind.
Sen. Inhofe attempted to move the discussion away from climate change and toward the issue of reliance on foreign oil. His point was that we need to develop our oil reserves that we have here, presumably instead of developing solar, wind and nuclear resources. Hon. Strickland, from the Interior Department, replied that the Interior Department is moving toward developing all of the natural resources of the United States in "responsible manner." But that should not mean that we should not also develop "renewable" resources.
Panel Two: Industry and Environmental Group Representatives
The second panel of the day concentrated a little more on reductions of carbon emissions. Interestingly enough, Mr. Fehrman of the Mid-American Energy seemed to support a hard cap, without any trading of allowances. His belief is that introducing market mechanisms only raise the costs for energy companies. In addition, he believes that carbon capture and sequestration will be "commericially available" in 5 to 10 years.
On the other hand, Mr. Krupp advocated in favor of cap-and-trade to achieve real emission reductions in the nation. Mr. Krupp also noted that "carbon capture is ready to roll" – in Norway. The reason why? Because there is a price on carbon and the rechonology was developed as a result.
Shortly after the hearing was over, the Senate recessed for the rest of the month of August, leaving the big questions regarding climate change until the Fall.
The witness list and a link to the video webcast of the hearing after the jump.Continue Reading Climate Change and Clean Energy Headline U.S. Senate Committee Hearing
Day Two of the Hearings on the American Clean Energy and Security Act, also known as the Waxman-Markey bill, proved to be as contentious as expected. There was much evidence that the Bill would not have an easy road ahead of it, since the Committee is deeply divided. Although there were a few forays into the ridiculous, (Rep. John Shimkus (R.-Ill.: "I think this is the greatest assault on democracy and freedom that I’ve ever seen in Congress;" Energy Secretary Steven Chu comparing the Bill to Wayne Gretsky’ famous comment that "I was good because I skated to where the puck will be" (upon reflection, that comparison does work)), the Committee focused its questions to Panels (which featured EPA Administrator Lisa Jackson, Energy Secretary Steven Chu and Transportation Secretary Ray LaHood) on the issues of jobs, allowances, energy costs, and American leadership in the world.
Jobs
In these times of economic uncertainty, no issue pulls at the hearts of politicians than jobs, especially when it can be used to hammer a point home. Rep. Joe Barton (R.-Texas) led the way citing statistics from the National Association of Manufacturers, the Heritage Foundation, and Charles Rivers Associate claiming that the bill would result in anywhere from 1.8 to 7 million jobs "destroyed." Rep. Shimkus made his statement about jobs in a more theatrical way, stating that "those of us who want jobs are going to try to defeat this bill" while hoisting a small lump of coal for the panelists to see.
On the other hand, the proponents of the Bill were not about to concede that the Bill would cause mass unemployment. Rep. Waxman asked EPA Administrator Jackson, Secretary Chu, and Secretary LaHood if they believed that the Bill would create jobs. Administrator Jackson replied that she believed the Bill is a "jobs bill." Secretary LaHood added that the legislation would create jobs, "especially green jobs." Secretary Chu agreed that the Bill would create millions of jobs and reduce America’s dependence on foreign oil.
Cap-And-Trade and Allowances
The part of the Bill that drew the most fire were the allowances: should they be given away or should be they auctioned or should there be some sort of hybrid. Administrator Jackson stated for the record that the Obama Administration supported the idea that 100 percent of the allowances should be auctioned. In response to Rep. Jay Inslee’s (D.-Wash.) statement that we have to multiple approaches to addressing the problem through EPA regulations and a cap passed by Congress, Administrator Jackson stated that she "could not agree more." A cap-and-trade law, she continued, was "powerful and necessary," but we need other regulations as well.
Understandably, the energy company officials who testified were not so eager to embrace a 100% auction. They wanted at least some free allowances, while various scientists ad economists stated that a cap-and-trade with an auction is the only way to go. Rep. Cliff Stearns (R.-Fla.) stated that "free carbon credits were windfall profits in Europe." Contrast that statement with Rep. Ralph Hall’s (R.-Texas) statement that "we’ll be in a weakened position if adopt cap-and-trade." Thus, there is much work to get to a point where there can be agreement on whether there should be a cap-and-trade, let alone whether it should be a 100% auction of allowances or something else.
Energy Costs
The other big issue at the Hearing, particularly with respect to the later panels, was energy costs. Rep. Barton told the Committee that "the debate is not about whether cap-and-trade legislation will raise energy costs; the only dispute is by how much." He then went on to cite "findings" that the Bill would increase household energy costs up to $3,128 per year and that "filling your gas tank will cost anywhere from 60 to 144 percent more. The cost of home heating oil and natural gas will nearly double." Rep. Fred Upton (R.-Mich.) commented that this was not a "cap-and-trade," this was a "cap-and-tax."
The response to this onslaught was a little more nuanced. Secretary Chu responded that "it would be unwise to want to increase the price of gasoline" and then went on to outline the plans to lower transportation costs with electric cars, and low-carbon fuels, among other things. In response to a question from Rep. Jane Harman (D.-Calif.) Secretary Chu indicated that refrigerators use one quarter the amount of energy they used in 1975 and these are real savings seen by households. He then concluded by stating his belief that the "overall costs of living . . . can be held constant." Even the ConocoPhilips Executive Red Cavaney stated that although there will be costs "the benefits to the overall American economy will outweigh these costs."
American Leadership
Another area of concern addressed at the Hearing was the wisdom of the United States regulating climate change when there are no assurances that the number one and two emitters in the world – China and India – will also take steps to reduce their emissions. Rep. Ed Whitfield (R-Ky.) asked Secretary Chu: "If we unilaterally move to take steps and China and India and other countries are not, how do we deal with that?" Chu responded that that he believed that the United States should take a leadership role on this issue. This sentiment was echoed by Rep. Diana DeGette (D-Colo.) who stated that she believed that America should lead and not wait for India and China to get their act together.
Compromise
Outside the Committee Room Rep. Rick Boucher (D.Va.) and Rep. Jim Matheson (D.Utah) stated that they would meet with Chairman Waxman to discuss a comprehensive amendment that could be presented on Thursday. Rep. Boucher stated that the Bill’s schedule was "achievable" but it would depend on whether an agreement could be quickly reached on issues including how to allocate credits to existing industries, the schedule for reducing carbon emissions and flexibility in meeting renewable electricity requirements.
Click on "continue reading" for a complete Witness List with links to the witnesses written testimony and links to the video of the Hearing.Continue Reading Day Two of Waxman-Markey Hearings: EPA, Energy and Transportation All Show Up
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