This past weekend, the Guardian reported on a “green ultimatum” from the EU that could force US airlines to either capture the environmental costs of carbon emissions from aircraft or to face restrictions on flying permissions to EU airports.

According to the Guardian, EU Transportation Commissioner Jacques Barrot intends for the issue of carbon credits to play a significant role in the negotiation of a second phase of the EU-US Open Skies Agreement, a treaty that permits any EU airline and any US airline to fly between any point in the EU and any point in the US. The first phase of the agreement goes into effect on March 30, 2008, and discussions on the second phase are scheduled to begin in May 2008.

The Guardian notes that, under the Open Skies policy, “EU states can suspend flights from the US to Europe if insufficient progress is made on a second phase by 2010.” European air carriers have expressed competitiveness concerns over an EU Directive designed to progressively incorporate aviation emissions into the European emissions trading scheme — beginning with flights between EU airports in 2011 and expanding to any flight arriving at or departing from EU airports in 2012. The announcement by Mr. Barrot suggests that the EU may try to level the playing field for European carriers through multilateral treaties, in the absence of an international agreement on carbon emissions from civil aviation.

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China has taken an aggressive posture on technology transfer in its comments on the Bali Action Plan - the “roadmap” for guiding the next round of discussions on a post-Kyoto global climate change regime.

The UNFCCC Secretariat posted comments from 26 countries earlier this week, in advance of the first session of the Ad hoc Working Group on Long-term Cooperative Action under the Convention that will convene in Bangkok from March 31 to April 4, 2008. While most countries’ positions reiterate statements made during the Bali Climate Change Conference, China’s submission is notable for its stance on intellectual property rights (IPR), clean technology financing, and transfer. China made it explicitly clear that it has uniquely high expectations for the United States, noting that special consideration in the negotiations should be given to ensuring “quantified emission reduction targets [25%-40% of 1990 levels by 2020] for the Annex I Parties to the Convention that are not Party to the Kyoto Protocol.”

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The current impasse on climate change legislation may leave the Federal Trade Commission (FTC), not the Environmental Protection Agency, with the strongest hand to set policy for carbon offset projects in the United States. In response to the increasing number of carbon-related claims being placed on consumer products (e.g., “carbon neutral,” “green,” “sustainable”), the FTC initiated several proceedings in the last six months to evaluate the need for formal guidance for the voluntary carbon offset markets.

FTC regulates false and deceptive advertising, including environmental marketing claims, through its oversight authority under section 5 of the Federal Trade Commission Act. FTC enforces such claims on a case-by-case basis, using environmental marketing guidelines (Green Guides) to establish presumptive safe harbors with respect to marketing practices. While the Green Guides are not enforceable regulations per se, the Commission uses them as a reference point in assessing the legality of specific marketing claims and emphasizes that “conduct inconsistent with the positions articulated in these guides may result in corrective action.”

FTC recently closed the period for public comments on whether the Commission should update its Green Guides to address the growing corporate and consumer retail carbon market. In this post, we analyze FTC’s options for providing guidance on a specific aspect of carbon marketing claims: whether and how emissions reductions projects must meet the criteria for “additionality.”

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This morning, the House Select Committee on Energy Independence and Global Warming held a hearing entitled “Nuclear Power in a Warming World: Solution or Illusion?” Representative Markey, the Committee’s Chair, made his feelings known from the opening words, noting that “Americans from Wall Street to Main Street rejected nuclear power” decades before the recent resurgence in interest. Three of the four witnesses called to the hearing were also strongly anti-nuclear in their testimony, while the fourth came from the Nuclear Energy Institute.

If there was any doubt before, it is clear that Rep. Markey is not a supporter of an expanded role for nuclear power in any future climate change legislation. He decried the $145 billion in subsidies that have been given to the nuclear industry since 1950, and noted that renewable energy has only received a fraction of that amount. Renewables are also being deployed more rapidly, he argued, noting that worldwide, “the 20,000 megawatts of wind energy capacity built in 2007 was more than 10 times that of nuclear.”

Markey’s position is at odds with the current administration and other powerful Congressional leaders. President Bush has made nuclear energy a centerpiece of his energy policy. The Energy Independence and Security Act of 2007 provides over $18 billion in loan guarantees for nuclear plants. In his remarks on the day he signed the bill into law, President Bush noted that “[I]f we’re serious about making sure we grow our economy and deal with greenhouse gases, we have got to expand nuclear power.”

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We reported in January that three environmental groups had notified the Fish and Wildlife Service (FWS) of their intent to sue over the Service’s failure to act on a petition to list the polar bear as a threatened or endangered species. The original petition was filed in February 2005.

Under 16 U.S.C. § 1540(g)(2)(C), written notice must be given to the Secretary of the Interior at least 60 days before a citizen suit can be filed in federal district court. The 60 day period elapsed yesterday and the three groups — the Center for Biological Diversity, Greenpeace, and the Natural Resources Defense Council — filed suit to force FWS to act on the petition.

The Department of the Interior has indicated that it will respond to the suit “in a timely manner.”

The Center for Biological Diversity also recently sued the FWS to have ten species of penguins listed as a result of the effects of climate change. For many penguin species, including the emperor penguin, loss of habitat, caused by declines in Antarctic sea ice, poses a significant threat to survival.

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Tuesday, March 11

10:00 AM - House Appropriations Committee, Subcommittee on Energy and Water Development Hearing on Energy & Conservation, Fossil Energy, Electricity Delivery and Energy Reliability; 2362-B Rayburn
Panelists include C.H. “Bud” Albright Jr., Under Secretary of Energy and Alexander Karsner, Assistant Secretary for Energy Efficiency and Renewable Energy

Wednesday March 12

9:30 AM - House Select Committee on Energy Independence and Global Warming Hearing on “Nuclear Power in a Warming World: Solution or Illusion;” US Capitol Complex, room TBD
Guest panelists from the Rocky Mountain Institute; the Carnegie Endowment for International Peace; and the Union of Concerned Scientists

Thursday, March 13

9:30 AM - House Select Committee on Energy Independence and Global Warming Hearing on “Massachusetts v. U.S. EPA Part II: Implications of the Supreme Court Decision;” US Capitol Complex, room TBD
Guest panelists include Stephen L. Johnson, Administrator, Environmental Protection Agency

Thursday, March 13 - Friday, March 14

8:00 AM - National Academies Summit on America’s Energy Future (live webcast)
A critical overview of the recent influential energy studies and initiatives, featuring presentations by leaders in U.S. energy policy, research institutions, and private firms on energy security, energy and the economy, and energy and the environment.

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A new Clean Energy Investment Bank could provide the impetus to move the U.S. clean energy technology market more fully into the mainstream energy industry.

Yesterday, Sen. Pete Domenici (R-NM) and seven co-sponsors introduced a bill (S.2730) to establish a Bank that would provide loans, loan guarantees, and insurance to facilitate the development and commercialization of clean energy and energy efficiency technologies — solely within the United States. The Bank would act as an independent government corporation, similar to the U.S. Export-Import Bank.

According to Domenici, the Bank would “take responsibility for management of the Department of Energy’s Title XVII loan guarantee program,” which was established by the Energy Policy Act of 2005 to support early commercialization of advanced technologies that reduce greenhouse gas emissions.

Dominici’s proposal appears to be consistent with the message of a May 2007 letter from Chairman John Dingell and ranking members of the House Committee on Energy and Commerce, calling for the Administration to use its full Title XVII loan authority to promote green energy investment.

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Today, House members led by Peter Welch (D-VT) and Brad Sherman (D - CA) introduced a bill to reverse the Environmental Protection Agency’s decision denying California’s request to adopt state tailpipe emissions standards stricter than those at the federal level.

According to Reuters, the proposed “Right to Clean Vehicles Act,” which is not yet available online, would “immediately grant California’s waiver request and also clear the way for 12 other states to set vehicle tailpipe emissions standards.” If so, it would join a similar bill introduced by Senator Barbara Boxer in late January.

Both the Welch/Sherman bill and the Boxer bill would likely face opposition from the automotive industry, and the Welch/Sherman bill could face additional challenges from Congressman Dingell, House Energy and Commerce Chairman, who sees state-by-state climate regulation as a logistical and economic challenge.

The new House bill comes less than a week after EPA Administrator Stephen Johnson published his formal rationale for denying the waiver, in which he asserted that the law does not allow for “California to promulgate state standards for emissions from new motor vehicles designed to address global climate change problems.”

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Today, the House Energy and Commerce Committee held a hearing on their second climate change white paper, “Competitiveness Concerns and Engaging Developing Countries.” The hearing featured an array of witnesses, both from industry and environmental groups, and looked extensively at how best to bring developing countries into climate change legislation that will be largely focused on the American economy. What the hearing outlined more than anything else is the political difficulty in achieving this goal while at the same time making U.S. climate policy WTO compliant.

Chairman Dingell outlined the need for addressing developing nations in his opening statement:

“First, absent corresponding action by developing countries, the adoption of limits on greenhouse gas emissions by the U.S. and other developed countries will not achieve the goal of protecting the global environment;

“Second, if the U.S. were to cap its own emissions without corresponding action by developing countries with whom we compete internationally, the relative cost of American products could increase and cause U.S. industry and jobs to migrate to nations that do not limit their emissions;

“Third, past debate on climate change suggests that Congress would be unlikely to adopt legislation committing the U.S. to limiting its greenhouse gas emissions in the absence of assurances that developing countries will take similar action.”

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Reflecting growing pressure from institutional investors to curb potential environmental and climate policy risks to public companies, China has put into effect a “green securities” plan. The new requirements impose barriers on heavy polluters applying for an initial public offering (IPO) and mandate that listed companies disclose more information about their environmental performance.

According to the regulation issued by China’s Securities Regulatory Commission (CSRC) in January of 2008, companies from energy- and pollution-intensive sectors must undergo inspection by a State Environmental Protection Agency (SEPA) environmental specialist if they wish to launch an IPO.

Specifically, companies in the sectors of thermal power generation, iron and steel, cement, and electrolyte aluminum, and companies with cross-provincial business in any of 13 listed industrial operations that may cause heavy pollution will be required to obtain SEPA approval of their environmental performance. These companies’ IPO application to CSRC shall include recommendations drawn up by the environmental regulator before they may be considered. Read the rest of this entry »

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