Monday, March 13, 2017

The Puzzle of California’s Climate Leadership

By: Lesley McAllister

Last Friday, UC Davis School of Law’s Environmental Law Society and the Environs journal held their 2017 Symposium, The Future of Climate Change Law & Policy: View to 2030.  It was an excellent event, with many great speakers and terrific attendance -- big congratulations to the student organizers: Sophie Wenzlau, Dane Jones and Jamie Katz!  Panels dealt with California’s new SB32 (which updates AB32 by writing into law California’s 2030 goal of reducing its emissions to 40% below 1990 levels by 2030); climate change and agriculture; zero emissions vehicles; and California’s leadership in international climate law. 

A couple speakers on the final panel about international connections couldn’t come at the last minute, so I and several of my colleagues were asked to step in. The panel went well, but I had one of those experiences that one should not have after more than 10 years of teaching and presenting on panels – I spoke for 9 (out of 10) minutes without getting to the point!  Of course, we all hate when professors do this!  I can only offer the excuse that I am out of practice, and I have been through a ridiculous amount of cancer treatment in the past three and a half years. But it was a shame because I really had some important knowledge that I wanted to convey, and I bombed it.

This blog post is my attempt at a re-do.   The very interesting and timely question that I wanted to address was how and why California has made so many international linkages in climate policy.  Everyone knows that California has been a climate change leader within the United States.  But it may be forgotten that California has also been extremely active internationally, working with other subnational jurisdictions throughout the world.  The map below gives you a clear picture:

  Picture1

An early demonstration of California’s interest and capability to make agreements with other subnational jurisdictions came from California’s leading role in the Western Climate Initiative (WCI) starting in 2007. Other participants included six states (AZ, NM, UT, OR, WA, and MT) and four Canadian provinces (BC, Manitoba, Ontario and Quebec). WCI contemplated a cap-and-trade program that would include all the WCI jurisdictions. Why did California try so hard to work with other states and Canadian provinces? Was it to look big and impress?  Well, maybe, but there was an important economic policy reason, too. As WCI recognized, “a broad geographic scope will also reduce overall compliance costs and can help mitigate leakage risks.”  it was in this same timeframe that the US came closest to getting a federal climate law. In June 2009, the House passed the Waxman-Markey Bill in a 219-212 vote.  But then the bill died in summer 2010 without a hearing or a vote in the Senate.  WCI also progressively fell apart in 2009/10 as new state leaders came into office.  By 2011, only California and Quebec were working on establishing cap-and-trade programs. 

They both did, and in January 2014, the two cap-and-trade systems were formally linked.  This meant that compliance instruments from Quebec’s program could be used in California’s program, and vice versa.  This is useful for regulatory compliance because it might be that there are emissions reductions that can be obtained at lower cost in Quebec.  Or more broadly, the overall cost of reducing emissions might be lower in Quebec.  When the two systems are linked (and in the absence of rules that make it otherwise), those lower-cost emissions reductions will happen first, and the joint California-Quebec program will be able to collectively reduce emissions at a lower cost than a California-only program would. 

If you, for whatever reason, wanted to see those emission reductions happen in California, you may not be happy about all this. But for those who are subject to the regulation and want to buy compliance instruments (i.e. tradable permits) rather than reduce emissions themselves, this linkage should reduce their compliance costs. California is now preparing to formally link with the province of Ontario by January 1, 2018.

In large part, it is this pursuit of the lowest cost emissions reductions that has fueled California’s foreign policy on climate change. Aside from linked programs in Canadian provinces, the other international opportunity that California has extensively cultivated is in tropical forestry offsets.  In 2008, California founded the Governors’ Climate and Forests Task Force (GCF) to influence the development of the regulatory architecture to ultimately enable emissions reductions in the tropical forests of several developing countries to serve as compliance instruments in California’s cap-and-trade program.   Currently, GCF includes 29 subnational jurisdictions in eight countries sharing information and best practices. 

A 2010 MOU among California, the Brazilian state of Acre, and the Mexican state of Chiapas contained recommendations for how Acre and Chiapas would be able to generate “REDD offset credits” that could serve as compliance instruments in California’s cap-and-trade program.  Of course, the idea is that reducing deforestation in tropical rainforests has the dual benefits of saving rainforest ecosystems and preventing emissions.  And, at some point, reducing emissions by preventing deforestation is expected to be cheaper than additional emissions reductions within California, Quebec, and Ontario. These credits could enable California and other cap and trade jurisdictions to meet ambitious emissions reduction goals for 2020 and beyond. 

With these efforts, California and its Governor became important players on the international climate stage. The 2014 Rio Branco Declaration was produced at the eighth meeting of the GCF. In this Declarations, governors from 22 states in countries with tropical forests committed to reduce deforestation by 80% by 2020, if they receive a guarantee of “adequate, sufficient, and long-term performance-based funding.”  Enabling REDD credits to be used as compliance instruments in an ongoing, functioning cap and trade program could be a source of long-term funding.  

Also, in the lead-up to the UN climate meeting in Paris in late 2015, California forged the Subnational Global Climate Leadership MOU, known as the Under2 MOU.  Two goals are adopted: (1) limiting warming to below 2° Celsius, which scientists say is needed to avoid dangerous consequences; and (2) limiting greenhouse gas emissions to 2 tons per capita, or 80-95% below 1990 level by 2050.  The MOU included 12 founding jurisdictions in addition to California:  Oregon; Washington; Vermont; Acre, Brazil; Baden-Württemberg, Germany; Baja California, Mexico; Catalonia, Spain; Jalisco, Mexico; Ontario, Canada; British Columbia, Canada; and Wales, United Kingdom. It has grown to 167 jurisdictions from 33 countries, representing 1.09 billion people and $25.9 trillion in GDP, which is 35% of the global economy.  With the arrival of the Trump administration, which is completely abdicating in climate change policy both domestically and internationally, California continues to stand by its climate law commitments.  Long live California’s climate change leadership! 

Okay – so the above is what I should have said last Friday. And I might have been able to say it all in 10 minutes, but instead I started out with some preliminary musings that ate up my time.  These musings mainly focused on how California’s rigorous emissions reduction regulation and its international actions were a puzzle – how and why did California become such a leader?   If we think about the principles of regulatory design, California’s climate change regulation makes little sense.  Certainly, it doesn’t follow the rule that there should be a match between the size of the problem and the size of the jurisdiction addressing it.  And how is it that California seems to simply defy the foundational tragedy-of-the-commons problem? Why is the state willing to invest so much in reducing emissions when almost no other jurisdictions are? And what led to California becoming such a policy leader not just in the US, but internationally? 

There has been some good writing on these questions – indeed we’ve had ten years to think about them – but I don’t feel like I have a good grip on the answers. As I note above, I think that California’s decision to implement a cap-and-trade program motivated its early international linkages.  It has also turned out that emissions reductions have been cheaper than expected, which has helped California’s cap-and-trade program run smoothly. And surely, part of the explanation regards political leadership:  Governor Jerry Brown emerged as a truly inspired leader, effective in bringing not just the state into the fold, but more than a third of the global economy.  What other factors have enabled California’s leadership?  I welcome your thoughts below! 

And as for panel presentations, I hope I have learned not to start a short talk with an idea that puzzles me - next time I hope I can just get the puzzling facts out for all to appreciate and then see if there’s time leftover for additional ramblings!

March 13, 2017 | Permalink | Comments (0)

Friday, March 10, 2017

Implications of the Ninth Circuit’s Agua Caliente Decision

On Tuesday, the Ninth Circuit Court of Appeals released an important decision in Agua Caliente Band of Cahuilla Indians v. United States.  The decision addressed whether the Agua Caliente Tribe, which has a reservation in southern California’s Coachella Valley, could assert a federal reserved right to groundwater.  The Ninth Circuit held that the tribe could assert such rights.

Before I explain some of the potential implications of the case, some background on reserved rights may be helpful.  In general, state law defines water rights, even where the waters in question are found on federal land.  But in Winters v. United States, 207 U.S. 564 (1908), the United States Supreme Court held that when the federal government reserves federal land for a specific use, it also reserves sufficient water rights to accomplish the purpose of the reservation.  Reserved rights doctrine applies to federal reservations in all their forms, but many of the most prominent reserved rights cases have involved Indian reservations.

National_AtlasThe resulting rights can be valuable.  Federal reserved rights date to the time of the reservation, which means they tend to be old.  And the age of a water right can be crucially important, particularly in the American West, where older rights theoretically trump newer ones.  In practice, reserved rights function as the most senior rights in western water allocation systems.  That creates an interesting paradox: Native American tribes, which historically were on the short end (to put it mildly) of most western resource allocation decisions, can hold some of the West’s most valuable water rights.

Until this past week, the tribes had successfully asserted reserved rights only to surface water.  But for the Agua Caliente Tribe, that wasn’t a likely option; their homeland falls within one of the driest deserts in the United States, and surface water is largely absent.  If the tribe was to assert a meaningful reserved right, that right had to be for groundwater.  And in Tuesday’s decision, the Ninth Circuit held that such a reserved groundwater right was possible.

So how important is the case?  It seems safe to predict that other tribes now will assert similar claims.  But there reasons both for and against expecting a more widespread impact.  I’ll start with the reasons why we might expect this case to be consequential. 

First, and at the risk of stating the obvious, the case will support other tribes’ claims to a new kind of water source.  In an area like the Coachella Valley, where surface water is scarce and groundwater rights are contested, the ability to assert old rights to that additional source can give a tribe a trump card in water disputes with its neighbors.  In most of the United States, the climate is not as extreme as it is in the Coachella Valley, and surface water is more abundant.  But there still are many other places where groundwater provides the primary water source.  For that reason alone, the case will likely have ripple effects across the West, and perhaps in eastern states as well.

Additionally, a right to groundwater is sometimes valuable because groundwater is more physically accessible that surface water.  Surface water can be hard to exploit, even if one theoretically has a legal right to that water, because exploitation often requires constructing and operating canals, pipes, intake pumps, and other infrastructure.  For a tribe with very little money to spend (and no offers from the Bureau of Reclamation to subsidize construction, as routinely happened with the tribes’ non-native neighbors), building that infrastructure could be prohibitively difficult.  Because of that difficulty, many tribes have had limited ability to exploit their reserved rights.  Accessing groundwater, by contrast, can be much easier.  A landowner just needs to sink a well and install a pump and a sprinkler system.  That still costs money, but the infrastructure costs are often much lower.

On the other hand, there are reasons to anticipate less impact.  One is that many tribes already have state-law groundwater rights, which they hold by virtue of current landownership rather than past federal reservations.  Reserved groundwater rights could give tribes older priority dates, but in many places, those rights would not conjure legal groundwater access where it had not existed before.  Second, any additional water that some tribes gain through access to groundwater might be lost when their surface water reserved rights are recalculated.  To measure the aggregate scale of tribal reserved rights, courts typically use a practically-irrigable-acreage standard, which—in theory—looks at tribes’ ability to use water, not at water availability or at competing demands.  In other words, measures of demand, not supply, theoretically determine the scope of reserved rights, and the emergence of a new supply therefore might not impact the overall scope of the right.  In practice, things could play out differently; some legal uncertainty hovers over Winters doctrine and Native American claims (for an interesting and still-relevant article, see Andew C. Mergen & Sylvia F. Liu, A Misplaced Sensitivity: The Draft Opinions in Wyoming v. United States, 68 U. Colo. L. Rev. 683 (1997).  But it is at least plausible that a tribe with recognized reserved rights to surface water would see little benefit in also asserting a groundwater claim.

The Agua Caliente litigation is not over, and in subsequent phases (or settlement negotiations), and in cases elsewhere, litigants are likely to address many of these remaining questions.

- Dave Owen

March 10, 2017 | Permalink | Comments (0)

Thursday, March 2, 2017

Myths, Realities, and the Clean Water Rule Controversy

On Tuesday, President Trump signed an executive order directing EPA and the Army Corps of Engineers to begin work on a new rule defining the scope of federal jurisdiction under the Clean Water Act.  The rule, if and when it is finalized, would replace the “Clean Water Rule” released by EPA and the Corps during the summer of 2015.  Much of the political rhetoric surrounding the Clean Water Rule has suggested that the 2015 rule was responsible for massive economic impacts and that removing it will be a source of economic relief.  President Trump’s own remarks, for example, were riddled with such complaints.  But for several years, I’ve been researching the implementation of federal stream and wetland protections (the results of those inquiries appear in just-published articles here and here and in an earlier article here).  The truth, I’ve learned, bears little resemblance to President Trump’s claims.

In fact, the 2015 rule has had hardly any impact.  That’s partly because the Sixth Circuit stayed implementation of the rule not long after it was enacted.  But even if the rule had remained in force, its primary consequences would have been minor adjustments in the scope of federal jurisdiction and somewhat heightened levels of consistency and predictability.  Indeed, the scope of federal jurisdiction would have been narrower than it was in 1986, when EPA and the Army Corps—overseen by the Reagan Administration—last promulgated regulations defining Clean Water Act jurisdiction.  The rule, in short, should not have been a big deal.

So why, then, did the rule generate a firestorm, and why has Donald Trump made replacing it such a priority?  One reason is that some regulated entities have never been comfortable with the scope of Clean Water Act jurisdiction (for others, that jurisdictional scope is only a minor concern, or, if the they need clean water, an important benefit).  For those entities, the Obama-and-EPA-are-overregulating story was just a convenient hook upon which to hang forty years of annoyance.  The second reason is that even though jurisdictional boundaries have not expanded in decades, the thoroughness and scope of regulation within those boundaries has.  It used to be fairly easy, in many parts of the country, to fill jurisdictional waters.  As Clean Water Act regulation evolved, some of that ease went away.  Again, this trend was not peculiar to the Obama Administration, or even to the federal government; some of the changes emerged from red states and during the Bush I, Clinton, and Bush II administrations.  Pinning the changes on the Obama Administration is just a convenient rhetorical device.

Because the Clean Water Rule didn’t actually change much, the most important part of the executive order isn’t the language directing EPA and the Army Corps to rescind the old rule.  Instead, it’s language at the end of the order directing EPA and the Army Corps to “consider interpreting the term "navigable waters," as defined in 33 U.S.C. 1362(7), in a manner consistent with the opinion of Justice Antonin Scalia in Rapanos v. United States, 547 U.S. 715 (2006).”  Justice Scalia’s Rapanos standard would eliminate federal jurisdiction for any waterway that lacks a relatively continuous surface connection to navigable-in-fact waterways.  In somewhat plainer English, that means the Clean Water Act would no longer protect ephemeral or intermittent wetlands and streams.  That would be a drastic shift.  Across the nation, a huge percentage of our streams are ephemeral or intermittent, and in drier regions, a continuous-surface-connection standard would eliminate Clean Water Act protections for nearly all aquatic features.

That drastic shift would have terrible implications for water quality.  Ephemeral and intermittent streams and wetlands are not the most charismatic of environmental resources, but they are important.  In recent years—particularly in the years since the Supreme Court’s Rapanos decisions—a growing body of scientific literature has explored the implications of tributary waterways, including intermittent and ephemeral streams, for downstream water quality.  Scientists have discovered that very small tributaries play crucial roles in processing nutrients, and thus protecting downstream waterways from algae blooms and dead zones; limiting floods; recharging groundwater; sustaining steady flows; supporting biodiversity; filtering pollutants; and maintaining fluxes of sediment and debris.  In simpler terms, they protect water quality, water supplies, and public safety; they make the rivers, lakes, and bays that we love places worth loving.  Fill them in, and those benefits will disappear.  Yet that is exactly what the new executive order asks EPA and the Army Corps to do.

(For a very partial sampling of this large body of literature, see here, here, here, or here, and for a synthesis report, see here.)

Beyond water quality, this controversy reflects a larger tension between environmental law’s narratives of conflict and of collaboration.  In their speeches about the Clean Water Rule, Donald Trump and the rules other opponents have emphasized a story of less-than-zero sum conflict, in which EPA (they never mention the Corps) is driving thousands of Americans out of work for little environmental gain.  It isn’t just the latter part of that story that is false.  One of the most striking lessons of my research on stream and wetland protection was the extent to which the Army Corps has found ways to increase regulatory protections for waterways while also finding more efficient, predictable, and low-cost ways to implement those protections.  Stream and wetland protection wasn't stuck in zero-sum conflict.  Instead, the environmental law of stream and wetland protection had been on a decades-long trajectory of improvement.

That trajectory can continue.  I don’t expect the Trump Administration will help; its leaders are screamers, and screamers have no use for narratives of creative compromise or governmental improvement.  But the rest of us do have use for those narratives, particularly when, as is often the case, they are true.  So hopefully cooler heads will eventually prevail, and we will continue finding sensible ways to improve protect our streams and wetlands—and the millions of people who depend upon them.

- Dave Owen

March 2, 2017 | Permalink | Comments (1)

Wednesday, March 1, 2017

Regulatory Paralysis by Preemption: GMO Food Labeling and Potentially More

By: Lesley McAllister

Did you know that as of July 2016, we have a new federal law mandating that genetically engineered food be labeled? It is true – see 7 U.S.C. § 1639(b)(2)(D) (Jul. 29, 2016).   So when, you might ask, will you be able to know which of all those foods we buy at the grocery store are produced with GMOs?

It could be a very long wait. For one thing, the law – the National Bioengineered Food Disclosure Standard – didn’t actually mandate a label that directly states that the food is a GE food. Rather, Congress left open the possibility that USDA allow scannable QR codes (pictured below) instead of on-package labeling as the means of disclosure. Congress charged the USDA with completing a study within one year (i.e. by July 2017) regarding whether QR codes would preclude consumer access to the disclosure (and if so, the agency shall provide “additional and comparable options to access the bioengineering disclosure.”)  As of early January, USDA didn’t have the funds to conduct the study

The Disclosure Standard itself is supposed to be established within two years of the passage of the law. But in Trump’s administration, with its strong anti-regulatory ideology, the best guess is that forward motion will be further delayed.  On the campaign trail in Iowa Trump said he opposed efforts to require mandatory labeling of GE food.  Even though mandatory labeling is now the law of the land, it seems very unlikely that the 90% of Americans who have expressed their interest in labeling will be satisfied any time soon. 

Perhaps most significantly, this federal action (and non-action) on GMO labeling has paralyzed all state labeling for the foreseeable future. The federal law was passed (with the  support of industry) just weeks after Vermont’s law went into effect that required on-package labeling.   The federal law expressly preempted Vermont’s law and other state efforts to require labeling.  Indeed preemption was the raison d’etre for the federal law.   So now, all those consumers are left without any option.  States can’t regulate because they are preempted, and the federal government won’t likely regulate because it doesn’t like regulation (despite the existence of the law).  While the courts could intervene, that possibility is still years away.

Such regulatory paralysis by preemption could become a new strategy for delaying and preventing protective regulations in the future. As some states start acting more aggressively to deal with environmental problems that the federal government is not acting on, Congress could simply pass laws that purport to regulate the matter and expressly preempt the states from doing so.  In reality, however, those laws could be so poorly written or designed (as many pro-labeling advocates argued that this law was) that they will never be effectively implemented or enforced.

Qr code

 

March 1, 2017 | Permalink | Comments (0)