Adaptation and the Private Sector

The private sector, including businesses, industries and the financial world, are critical players in climate adaptation. It is essential to engage corporations and finance providers in adaptation efforts. This idea was emphasized by various panelists—including Patricia Espinosa, Executive Secretary of the UNFCCC and Emma Howard Boyd, Chair of the Environment Agency in UK—who were part of a high level panel at a side event entitled Accelerating action and support for adaptation held on December 12, 2018 at COP24 in Katowice, Poland.Business-Leadership

This side event was the first public event hosted by the Global Commission on Adaptation since its launch on October 16th, 2018. As noted here, the Global Commission on Adaptation is led by former UN Secretary Ban Ki-moon, Bill Gates and World Bank CEO Kristalina Georgieva, and was created to enhance the visibility and political importance of climate change adaptation.

During the side event, the need to elevate climate change adaptation to the political agenda but also to businesses and the financial world was highlighted as a way of more effectively enhancing resilience around the world. Corporations and the financial sector need to adapt to changing circumstances and plan for new climate risks in the economic and market environment.

The World Resource Institute (“WRI”) noted that multinational corporations, in particular, typically have operations and supply chains in many parts of the world and so the way they respond to climate change can affect many populations, including poor communities in developing countries. They can play an important role in making these communities more climate-resilient by building a resilient workforce, among other things.

WRI also points out that climate change adaptation represents an opportunity for corporations to create new goods and services that are more climate-resilient and redesign current products into climate-resilient goods. For example, BASF has developed new technologies for climate change adaptation including a special elastomer polyurethane system “Elastocoast” to protect dikes by absorbing the force of the breaking waves and slowing down the water masses.  In order to optimize crop plants such as corn, soy and wheat, BASF’s researchers are also developing stress-tolerant plants that are more resistant to extreme weather conditions such as drought. Moreover, in 2008, Caisse des Dépôts launched an international research programme on adaptation focused on designing and funding infrastructure, recognizing 1111the importance of considering climate change in the design of new infrastructure and modification of old infrastructure.


Who is representing the US at COP23?

COP 23You are on your way to COP23, the place to be for everything climate change. You walk through the doors and find yourself among hundreds of people from all over the world, running from one session to the other, with a quick stop perhaps for a cup of coffee. You attend negotiations and presentations, and develop an understanding of what is important to a country or a block of countries as they attempt to reverse the alarming rise in the planet’s temperature.

After a day or two, the chaos becomes normal and all the different languages you overhear start having a familiar tone. You begin to appreciate the setting: located by the Rhine and intersected by a city park, dotted with ponds where ducks, geese, and swans keep residence. It is beautiful. Then, as you are waiting for an electric car/bus to take you between the Bula and Bonn Zones, you notice a white dome shaped building to the side. Curious, you head there and find a sign for the U.S. Climate Action Center.  Peppered throughout the place is the hash tag #wearestillin.

You feel surprised because the U.S. declared its intention to withdraw from the Paris Agreement. But a list of this Center’s events shows these presenters: Al Gore, Senator Ben Cardin of Maryland, Governor Jerry Brown of California, Governor Kate Brown of Oregon, and Governor Jay Inslee of Washington.  In other words, a collection of American environmental rock stars and members of the U.S. Climate Alliance fill the place.

But then you notice that the U.S. delegation is hosting a “side event” titled The Role of Cleaner and More Efficient Fossil Fuels and Nuclear Power in Climate Mitigation. Unlike events held at the U.S. Climate Action Center, which attracted many attendees, this event drew protests. So who is representing the United States?

A closer look at the U.S. Climate Action Center shows that it as an effort by California Governor Jerry Brown that is funded by former New York City Mayor Michael Bloomberg. It has attracted a collection of states, counties and municipalities; colleges and universities; businesses; non-profit organizations; faith organizations; and ordinary citizens. All told, the U.S. Climate Action Center spans all fifty states, 127 million Americans, and $6.2 trillion, all intent on honoring continued U.S. commitment to the Paris Agreement. A delegation called the People’s Delegation at COP23 pledged to the UNFCCC that “we are still in.”

The U.S. delegation, with representatives from the State Department and the Environmental Protection Agency (EPA), is the delegation of record.  It, and only it, has the authority to negotiate on behalf of the U.S. (at least till the U.S. projected exit in 2020). But I believe the delegation that can effectuate the goals of the Paris Agreement has the upper hand. If “we are still in” manages to reduce GHG emissions in the U.S., then they are the delegation of record!


Is the US withdrawal from the Paris Agreement a conservative act?

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“We’re definitely, completely, undoubtedly leaving the accord.” With these words, President Trump announced his intention to withdraw from the Paris Agreement. This decision did not come as a surprise, although it disappointed many around the globe. Now the question is, will it impede global progress toward limiting the rise in temperatures?

Michael Oppenheimer, Princeton climate scientist and co-editor of the Journal of Climactic Change thinks it could, saying “if we lag, the noose tightens” — despite the US Energy Information Administration (EIA)’s estimate that the US is forty years ahead of forecasts in renewable energy growth.

Surprisingly, the same conservative Republican Party principles that led the US to withdraw from the Paris Agreement are also preventing lag. A strong military, free market and support for business, and a limited federal government that favors more state-based regulations are peppered throughout the 2016 Republican Party platform. Here is how these segments react to climate change. First, the military’s response to climate change: as a part of its readiness program, the Department of Defense (DoD) prepared a Climate Change Adaptation Roadmap, where it states “among the future trends that will impact our national security is climate change.” This document then describes adaptation strategies that are reminiscent of the ones required by the Paris Agreement Article 7.

The business community — specifically big business — urged the president to keep the US in the Paris Agreement. The CEOs of Exxon Mobil, BP, and Chevron took out an ad in a major U.S. newspaper to declare, “by expanding markets for innovative clean technologies, the agreement generates jobs and economic growth.”

Finally, in the face of President Trump’s decision, state governments have jumped in to mitigate GHG emissions and spur climate change adaptation. The United States Climate Alliance is a consortium of 14 states and Puerto Rico that represents 36% of the US population, $7 trillion of the national GDP, and 1.7 million jobs in green energy. The Alliance has affirmed its commitment to achieve the US’s Paris Agreement pledge. Along with a 14% increase in economic growth, it has already achieved a 15% reduction in GHGs as compared to 2005 levels. It is on track to meet the Paris Agreement goal of 26-28% reduction in GHG emissions by 2025 as compared to 2005.

Nonetheless, we should continue to be disappointed by the announced withdrawal (and thankful for the slow withdrawal procedure detailed in Article 28). The US withdrawal is based on a dangerous idea. This idea depicts climate change policy as a choice between environmental conservation and economic growth or between jobs and regulation. Framing climate change in these terms allows people to think that the issue is a matter of trade-offs. It leads to thinking that, at some point, providing jobs is most important so the environment must take a back seat. However, in reality, climate change is an existential threat and needs to be dealt with.


Trusting Corporations by Weakening Antitrust?

This September, many socially conscious corporations have donated to climate change mitigation and sustainability. Ikea has devoted $44.6 million to the We Mean Business coalition, which began at a UNFCCC Business and Industry Day to provide a platform to “amplify the business voice and catalyze bold climate action.” Mars just pledged $1 billion in investments towards climate change, poverty and scarcity of resources by targeting renewable energy, food sourcing, industry coalitions, and support for farmers. Energy companies such as Pacific Gas and Electric have pledged their support for renewable energy. On a global scale, even supermarkets have collaborated to show their environmentally progressive intent for the future (although they were ultimately shut down because of antitrust and collusion issues). This current corporate support is a good sign for climate change as corporations prove their influence on climate policy.

Corporate Influence and Climate Change

Click on image to see full spectrum of corporate stances on environmental sustainability.

In light of all of this, legal scholar, Inara Scott, asks if U.S. antitrust law makes it “nearly impossible for corporations to collaborate on sustainability initiatives.” Scott asks whether the Sherman act (the original 1890 statute that broke up major U.S. monopolies) is actually a barrier for corporations to act sustainably because it outlaws collusion and collaboration amongst companies. Scott tells a story of Proctor & Gamble and Unilever. In the late 2000s the two companies planned to release a more efficient laundry detergent but were concerned about consumer reactions. So to avoid a price war they agreed to freeze their prices and market share. This violated antitrust laws so when regulators in Europe found out, they fined the companies more than 300 million Euro.

Two brand names tried to work together to fight climate change rather than each other.

Consumer protection was the ideal that spurred current U.S. antitrust law.  Scott invokes consumer to protection to muse that companies should be able to argue that collusion and collaboration is best for long term consumer protection. Scott imagines that long term consumer protection would include sustainability goals that consider the scarcity of resources and is mindful of GHG emissions. Weakening antitrust policy would allow corporations to collaborate and respond to the problems of sustainability, resource depletion, and climate change in a market efficient manner. A particular issue with Scott’s antitrust theory is whether the American courts or legislators could trust corporations enough to allow them the power to collaborate.

Ikea displays their commitment to renewable energy in its stores.

Ikea displays their commitment to renewable energy in its stores.

Scott’s solution is to create a regulatory counsel to analyze cases of collusion for environmental protection. This will alleviate concerns about corporate greed and corruption. There is a lot of distrust amongst American consumers and American corporations. Capitalist ideals often push corporations to strive for the lowest cost with maximum benefit, often forsaking consumers or the environment. But “’sustainability issues are profitability issues so [Scott] think[s] the altruism is [of companies] tied up in the long-term health of these companies.” So between corporate environmental sustainability, corporate collaboration, and government regulation – climate change policy may look more and more like business.


Are US COP21 pledges in trouble? UPDATE

IMG_24022/19/16 UPDATE:  Since my post on Monday, Todd Stern, U.S. Special Envoy on Climate Change, has weighed in.  Speaking from Brussels, where he was meeting with the EU’s Climate and Energy Commissioner, Stern was quoted as saying “it is entirely premature, really premature to assume the Clean Power Plan will be struck down but, even if it were, come what may, we are sticking to our plan to sign, to join. We’re going to go ahead and sign the agreement this year.”  He pointed out how different the situation President Obama faces when signing the US on to the Paris Agreement than President Clinton’s support of the Kyoto Protocol that was then abandoned by his successor, President George W. Bush. “Paris was seen as such a landmark, hard-fought, hard-won deal that, for the U.S. to turn round and say we will withdraw, that would inevitably give the country a kind of diplomatic black eye that I think a president of any party would be very loath to do.”  He added:  “We think we are going to prevail in the court but we are going to go ahead and sign the agreement this year. Period. And we are not in any way going to back away from our 2025 targets.”
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obama at COP21This has been the question of the week in the US environmental community (and to some degree, in the international community as well).

The US Supreme Court granted a stay on Tuesday to the plaintiffs challenging EPA’s authority to devise the Clean Power Plan (CPP) under its Clean Air Act rulemaking authority.  In Paris and at home, the CPP has been described as the cornerstone of US pledges under the Paris Agreement.

While a stay is only a procedural decision that stops implementation of a challenged law during litigation, the fact that five out of nine SCOTUS justices granted it caused a collective gasp last Tuesday night in the enviro law community.  Why?

First, and foremost, no one was expecting it.  The plaintiffs’ motion for a stay had already been denied by the D.C. Circuit (which will hear the case on the merits in June).  This ruling was accepted by both sides of the lawsuit as well grounded in precedent.  In fact, many saw the appeal to the Supreme Court as a “hail Mary” pass.  (No Cam Newton jokes here.)  Second, the stay indicates that at least five justices think that the plaintiffs could be harmed by complying with a rule that, when it inevitably arrives at the Supreme Court after the D.C. Circuit’s decision, may be held invalid.

Reading the blogs and Tweets of the last six days, it’s safe to say that the jury is out on what this SCOTUS decision means for the CPP and for the Paris pledges. One slice of expert opinion talks everyone off the ledge by reminding us that it’s just a short-term procedural victory, not a decision on the merits.  David Doniger of the Natural Resources Defense Counsel (NRDC) embodies this effort in this interview.

On the impact of the stay at home, there’s a difference of opinion.  The Washington Post reported that “about 48 hours after the court’s decision, major utility companies are reacting to the move with a collective shrug.”  The largest trade association of electricity providers, Edison Electric Institute, was quoted saying that “electric utilities are investing in clean energy and pursuing energy efficiency” regardless of legal challenges to the CPP — even companies, like AEP, who are listed among the plaintiffs.  Pointing to Congress’s recent renewal of clean-energy tax credits and increasing private sector investments in clean-energy projects, EPA Administrator Gina McCarthy adds that “the CPP is underpinning a [market] transition that is already happening and will continue to happen.” States like New York and California immediately called press briefings to state their continued implementation of the CPP.  A variety of state official responses, similar in tone, have been collected by the Georgetown Climate Center.  Yet Justin Pidot of the University of Colorado School of Law reads the stay as a sign that the coal industry is “too big for EPA to regulate absent an express congressional directive.”

On the international impact of the stay, observers express concern at the high level of international relations more than in the nitty gritty detail of achieving the Paris pledges.  Michael Gerrard of Columbia’s Center for Climate Change Law emphasizes that while the CPP is important to the US plan for mitigating GHG emissions, it’s not the only game in town.  Gerrard points to several facts in his blog post on Wednesday that the mainstream media hasn’t clearly picked up.  First, the CPP doesn’t fully kick in until well into the longer-range US INDC pledges.  Citing the US’s Biennial Report (a required communication under the UNFCCC) that was filed just last month, Gerrard points out that the CPP’s actual emissions reductions do not begin until 2022, and thus don’t affect the 2020 pledge of reducing 17% below 2005 levels.   In terms of the 2025 pledge of 26% to 28% reduction, Gerrard sees that the US was also relying on fuel economy and energy efficiency standards, phasing out hydrofluorocarbons (HFCs) under the Montreal Protocol on Substances that Deplete the Ozone Layer, reducing methane emissions, and for the ultimate reach, counting forests and other vegetated land masses as GHG sinks.

In contrast, Michael Wara of Stanford Law School believes the US’s international reputation for making good on the Paris Agreement pledges — already weakened by our unreliable behavior on the Kyoto Protocol — took a hit from the stay, especially given our bilateral negotiations with China and India and the role that the CPP-based reductions played in them.   (He also sees “significant ramifications” for the U.S. electric power sector given that continued uncertainty in regulating carbon hurts long-term electric utility investments, which could result in higher prices for consumers and competitive disadvantages in trade. (This post from the law firm of Stoel Reeves provides more details on this point.))

Now, with Justice Scalia’s death two days ago and the ensuing debate about who will appoint his replacement, the role of the Court in US domestic climate change law and its international commitments is even more acute.

 

 


Renewable Energy Advocates Get Upclose Look at Middelgrunden Windfarm.

Denmark has been a leader in renewable and clean energy for over 40 years.  While some policies were perhaps misguided, like banning car use on Sundays in the 1970’s, slow but steady expansion of the country’s renewable energy portfolio has allowed the country to maintain its emission levels while boasting of continuing healthy economic expansion.  One of the best examples of the country’s advances in renewables technology is the Middelgrunden windfarm located just offshore in Copenhagen’s harbor.  Built in 2000, it currently has twenty 2 MW turbines that generate a total of 40 MW of power (about 3% of Denmark’s total requirements).   [youtube=http://www.youtube.com/watch?v=J0Qi5xBA-ow] Continue reading