On December 7, the United States Patent and Trademark Office (USPTO) announced a pilot program that would accelerate the examination of “green” technology patent applications.  Eligible patent applications must pertain to inventions that “materially contribute[] to environmental quality, the discovery or development of renewable energy resources, more efficient utilization and conservation of energy resources, or greenhouse gas emission reduction.”  The patent applications must be limited to three or fewer independent claims and 20 or fewer total claims.  Under the pilot program, the first 3,000 such applications submitted with a no-cost petition will be granted special status and given accelerated examination.  The USPTO expects the expedited examination to reduce the patent pendency period by about a year, meaning applications under this program patents will issue in an average of 28-36 months from the date of filing.

Similar programs have been implemented in the United Kingdom and South Korea.  In the UK, patent application examinations will be automatically expedited where an applicant makes a “reasonable assertion” that the invention’s impact will have an environmental benefit.  In South Korea, applications directed towards the minimization of the discharge of pollutants or for inventions that have received funding or authentication for green growth will be examined at “Superspeed.”

The goal of the USPTO’s program is to “accelerate the development and deployment of green technology, create green jobs, and promote U.S. competitiveness” in the green technology sector.

For further information about this topic, please contact Akin Gump.

As negotiations at Copenhagen near conclusion, it is increasingly unlikely that a global deal can be made.  On Tuesday, the United Nations released the latest official draft agreements that will be presented to world leaders (including President Obama) in the final two days of the climate conference.  The recent drafts acknowledge that industrialized nations have historically been responsible for global greenhouse gas emissions and, thus, must lead efforts to combat climate change by providing funding and technology to poorer nations.  Both the text from the Long Term Cooperative Action working group and the document from the Kyoto Protocol working group, however, leave many critical issues unresolved.  Most notably, the international community has not agreed upon targets for emission cuts and adaptation funding.

Emission reduction targets

Developed countries and developing countries disagree on which countries should be obligated to reduce their emissions and what the level of these commitments should be. Leading developing countries insist on an extension of the Kyoto Protocol, which imposes obligations to reduce greenhouse gas emissions only on industrialized nations.  A rift within developing countries emerged when small island states and several African states insisted on a new protocol that would not only impose more stringent emission cuts for developed nations, but also expose developing countries to the risk of mandatory cuts. The European Union and the U.S., on the other hand, are calling for a more comprehensive document that would impose mandatory emission cuts on large emerging economies like China.  Developed countries also seek to delay the implementation of legally binding emission reductions.

The size of emission cuts and the benchmark for measuring these reductions is also a point of contention between developed countries. The EU has committed to cutting its emissions by 20% by 2020, and by 30% if a strong global agreement is reached. The EU’s proposed emission reductions are measured against 1990, as called for in earlier international agreements.  By contrast, the U. S. wants to use 2005 as the baseline year for cutting emissions because (i) the U.S. never joined Kyoto and (ii) this benchmark is more relevant to the Obama administration.  The U.S. has committed to cutting emissions by 17% of 2005 levels by 2020.  This corresponds to a cut of 3-4% beneath 1990 levels by 2020.  Senator John Kerry reinforced the legitimacy of the U.S. commitment to an international agreement by guaranteeing that this commitment would be enforced domestically, provided that China and other developing countries meet the U.S. demand for transparency and accountability on their emission reductions. 

Other issues, such as the “peaking year” concept, are also creating roadblocks.  India has taken the lead in opposing the imposition of a “peaking year” on the emissions of countries like India, China, Brazil and South Africa, which would demand that developing countries “peak” their emissions by 2025.  Instead, India proposes limiting the increase in global temperatures to within 2 degrees Celsius of pre-industrial times.  A smaller group of 43 of the smallest and most vulnerable developing countries has stated they will not accept any rise of more than 1.5 degrees Celsius since, they contend, anything higher would lead to disastrous consequences (e.g., a rise in sea levels as a result of climate change).

Another issue is the “hot air” concern.  With the collapse of the heavy industrial base of the Soviet Bloc countries in the 1990s, a large number of the carbon rights, or Assigned Amount Units (AAU), held by Russia, Ukraine and other Eastern European countries were never used.  If, under the new deal, the former Soviet Bloc countries are allowed to sell these surplus AAUs, or “hot air”, to nations that fail to meet post-2012 emission targets, this could impair all emission reduction commitments under the new deal by up to one-third.

Funding commitments and transparency

The G77 group of countries, backed by the least developed countries and small island states, are seeking $400 billion per year (1% of the GDP of industrialized nations) to help developing countries grow without increasing their greenhouse gas emissions.  Developed nations have not made offers anywhere near that level, nor do the latest draft agreements provide for funding beyond 2012.  As a compromise, the African Union chief negotiator Meles Zenawi has called for a significantly scaled-back finance deal, calling for $50 billion per year for developing countries by 2015 and $100 billion per year by 2020, with half of these funds allocated to vulnerable and poor countries, regions such as Africa and small island states.

China has acknowledged the needs of poorer developing nations in conceding that these nations should take priority in receiving aid to combat climate change.  China maintains its position, however, that industrialized nations should provide 0.5-1% of their annual GDP as funding to subsidize the efforts of developing nations to curb greenhouse gas emissions.  Further, China strongly opposes carbon tariffs proposed by other countries to protect their domestic industries. China has also refused to submit to international verification of whether it is actually implementing its reduction commitments.

The U.S. has rejected the proposal that industrialized nations contribute up to 1% of their GDP. The U.S. and other developed countries also seek to monitor developing countries on their compliance with whatever commitments are ultimately made, or at a minimum, to subject countries’ emission reports to international consultation and review.  The concern is that, without such compliance checks, some developing countries may have an incentive to “pad” the amount of their greenhouse reductions or otherwise game the system and that other countries may not sign on to the international agreement due to its lack of transparency.

With less than two days remaining for the climate change negotiations at Copenhagen, it is critical that the international community reach some sort of workable consensus on the key issues of emission reduction targets, funding commitments and transparency of the global system.

For further information about this topic, please contact Akin Gump.

It will be a fairly quiet week on the climate front in the House and the Senate, with most key staff members in Copenhagen and Senators and Congresspeople busily trying to finish health care reform, meet the federal government’s funding requirements and increase the debt ceiling of the United States.  Late last week the tri-partisan climate leadership (Sens. Graham, Kerry and Lieberman) released the broad outlines of what they will likely propose to the full Senate next year.  Already it looks like Majority Leader Reid will reserve much of March or April for floor discussion for the proposal.  

That being said, the Senate Energy Committee will be taking a look at a bevy of nuclear related legislation on Tuesday, that would create more standardization in the creation of nuclear reactors- particularly small reactors.  Many policymakers point to small reactors as a way to increase nuclear power for carbon reductions.

For further information about this topic, please contact Akin Gump.

The two-week Copenhagen climate change conference (COP15), part of the ongoing effort to negotiate a successor to the 2007 Kyoto Protocol, commenced this week.  Only a few days into COP15 the mood is less than optimistic and parties are not overly ambitious, leaving many to wonder whether a new agreement can be reached or whether COP15 will produce only another roadmap for a potential agreement. 

Delegates have been staking out their positions amidst discussions on long-term cooperative action, a shared vision, finance, mitigation and technology under the Ad Hoc Working Group on  Long-term Cooperative Action under the Convention (AWG-LCA); Annex I emission reductions; and the potential consequences under the Ad Hoc Working Group - Kyoto Protocol (AWG-KP) and Reduced Emissions from Deforestation and Degradation (REDD) under the Subsidiary Body for Scientific and Technological Advice (SBSTA). Talks about the leaked “climate gate” e-mails abound and the leak of Danish text, that gives wealthier, industrialized nations more power, has already created a rift between industrialized and developing countries.  U.S., China, Brazil, India, etc., who have pledged new reduction targets, have been criticized for their lack of aggression in reducing greenhouse gas (GHG) emissions. 

At the helm, UN Climate Chief Yvo de Boer believes failure is not an option and an agreement is a must.  At a minimum, his focus includes the following:

1. How and to what extent industrialized countries will reduce their GHG emissions?
2. How China and India, and other major developing countries, will limit the growth of their emissions?
3. The origination of financing for developing countries that need assistance monetary assistance for GHG emission reduction and adaptation.
4. The management of money.

President Obama, Secretary of Energy Stephen Chu and EPA Administrator Lisa Jackson are scheduled to attend the final week of COP15.  The U.S. will likely discuss its new emission reduction target of 17% below 2005 levels by 2020, with a trajectory to 42% reduction by 2030 to meet the goal of 83% by 2050, as well as actions taken by EPA to address GHG emissions.  While China has found the U.S.’s position to be underwhelming, State Department envoy Todd Stern fired a shot across China’s bow, declaring that the more advanced developing countries must reduce their GHG emissions and that the U.S. would not provide funds to China for development of greener industry.

COP15 concludes on Friday, December 18 and a final agreement appears highly unlikely.  With the U.S. and China seemingly drawing lines in the sand, the final week would seem to portend much in the way of atmospherics.

For further information about this topic, please contact Akin Gump.

At 1:15 PM EST today, EPA Administrator Lisa Jackson will hold a press briefing at which it is expected she will release EPA’s finding that emissions of greenhouse gases (GHGs) constitute a danger to human health and the environment pursuant to Section 202(a) of the Clean Air Act (CAA).

 On April 24, 2009, Administrator Jackson proposed to find that:

• The current and projected concentrations of the mix of six key greenhouse gases-carbon dioxide (CO₂), methane (CH₄), nitrous oxide (N₂O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulfur hexafluoride (SF₆)-in the atmosphere threaten the public health and welfare of current and future generations; and
• The combined emissions of CO₂, CH₄, N₂O and HFCs from new motor vehicles and motor vehicle engines contribute to the atmospheric concentrations of these key greenhouse gases and hence to the threat of climate change.

The former is referred to as the “endangerment” finding and the latter is referred to “cause or contribute” finding.  74 Fed. Reg. 18886 (April 24, 2009).

These findings are prerequisite to certain additional regulatory action under the CAA, including EPA’s proposed GHG emission standards for passenger cars, light-duty trucks and medium-duty passenger vehicles, covering model years 2012 through 2016 .  74 Fed. Reg. 49454 (Sept. 28. 2009).

For further information about this topic, please contact Akin Gump.

Much of the world’s climate attention, for the next two weeks, will be focused on the negotiations in Copenhagen for a successor agreement to the Kyoto Protocol.  Among the Americans planning a visit are dozens of  congressional staffers, a handful of senators (assuming they pass a health care bill) and representatives (assuming they pass a financial regulatory bill), as well as members of the Administration and the President.  With so much attention pointed to Denmark, the work of the House and the Senate will proceed along a more routine path.

In the Senate, the Energy and Natural Resources Committee will hold a hearing to consider a bevy of bills referred to them by the House.  Among the legislation that they will examine are bills to increase funding for solar energy research and commercialization; advanced automotive development; wind energy research; and to train architects and engineers in green building design.  All of these bills passed the House with large bi-partisan majorities.  Additionally, the Energy Committee will take a look at a few bills introduced in the Senate, including legislation creating an “X Prize” for developing CO2 scrubbing technologies.

Tuesday, December 8

The Senate Energy and Natural Resources Committee will conduct a hearing on the energy bills at 2:30 p.m. in Room 366 of the Dirksen Senate Office Building.

Thursday, December 10

At 10 a.m. in Room 366 of the Dirksen Senate Office Building, the Senate Energy and Natural Resources Committee will receive testimony on the role of grid-scale energy storage in meeting our energy and climate goals.

For further information about this topic, please contact Akin Gump.

After international negotiators met in Barcelona at the beginning of November, predictions on the likely outcomes-or lack thereof-from December’s Copenhagen conference have popped up everywhere. In the immediate aftermath of the Barcelona meetings, the consensus amongst those in the United States and the West more broadly was that Copenhagen was headed for failure-at least insomuch as a legally binding treaty with emission reduction targets like Kyoto Protocol is off the table.

Since then, the situation has become more muddled. Evidence abounds for those looking either to take a more optimistic view of the upcoming meeting, or those looking to bolster the more pessimistic outlook.  In recent days, the optimists may be gaining more evidence. President Obama’s recent trip to China gave rise to several positive announcements with regard to the two country’s climate action, including from a joint statement released at the end of these bilateral meetings, which noted that-

The United States and China, consistent with their national circumstances, resolve to take significant mitigation actions and recognize the important role that their countries play in promoting a sustainable outcome that will strengthen the world’s ability to combat climate change.  The two sides resolve to stand behind these commitments.

In the past few days, both countries have backed up that statement by announcing that they will come to Copenhagen with hard commitments to emissions reductions; the U.S. “in the range of 17%” while Chinese have pledged to reduce the carbon intensity of their economy by 40-45%. Just pledging commitments of any kind is a significant step for Copenhagen; it was disputes over commitments like these that derailed the Barcelona talks.

The nature of these commitments, however, may give the pessimists some ammunition-President Obama’s commitment is still tied to action in the Congress, where any outcome is far from certain. In any case, a reduction of 17% is much less than many developing countries were calling for and much less than the IPCC suggested cuts of 25-40% by 2020. For China, some experts have noted that currently enacted policies seem designed to cover fully China’s commitment, meaning that the Chinese have essentially pledged themselves to “business as usual” emissions.

The pessimists can also point to the outcome of a hastily convened meeting between Danish Prime Minister Lars Lokke Rasmussen and leaders of Pacific Rim nations. Describing that meeting, US Deputy National Security Adviser Mike Froman said, “There was an assessment by the leaders that it was unrealistic to expect a full, internationally legally-binding agreement to be negotiated between now and when Copenhagen starts in 22 days.” Should an agreement like this actually come out of Copenhagen, it might give the U.S. Congress a chance to pass binding climate legislation; it might be possible that a 2010 meeting in Mexico City would become the new goal date for a binding international treaty.

For some, any lowering of expectations for December undermines any hope of success because it takes the pressure off of international negotiators; the Kyoto Protocol, after all, came about as the result of 11^th hour actions, similar to the commitments now coming from the U.S. and China. It is possible that the situation is not as dire as it seemed the first week of November, and that the two negotiators with the most power might be committed to an ambitious meeting after all. And so, it remains possible that December could still hold some surprises for all prognosticators of international climate policy.

For further information about this topic, please contact Akin Gump.

Based on petitions filed by a consortium of Chinese auto producers, China’s Ministry of Commerce (MOFCOM) recently initiated investigations into alleged dumping and subsidization of U.S.-made autos.  The investigations, which according to MOFCOM’s initiation notices cover “saloon and cross-country cars” with engine displacement above 2,000 cc, could result in the imposition of antidumping and countervailing duties on imports of covered U.S. autos exported to China.  Some trade analysts view these investigations as a politically motivated response to the recent U.S. announcement of special “Section 421″ safeguard duties on Chinese-made tires, pursuant to a China-specific provision of U.S. trade law that allows the President to restrict imports of Chinese goods found to be causing market disruption.

MOFCOM’s countervailing duty investigation is notable because it is the first to target U.S. government funding to automakers intended to spur the development of next-generation clean energy drive-trains.  The programs subject to MOFCOM’s investigation include the U.S. Department of Energy’s Advanced Technology Vehicles Manufacturing (ATVM) Loan Program, the Troubled Asset Relief Program (TARP), the “Cash for Clunkers” program and various tax incentives related to hybrid and electric autos.  Of the thirty-one distinct U.S. federal and state programs under investigation by MOFCOM, most are related to U.S. government efforts to stimulate the U.S. auto industry’s transition to the production of more efficient and greener vehicles.

The investigation also highlights a tension between the Obama Administration’s energy policies and international trade rules.  On the one hand, the Administration is concerned that U.S. global leadership in green technology innovation is waning and has launched a series of initiatives - including financial assistance programs like ATVM - intended to restore U.S. leadership in this area.  Speaking at a recent energy conference, U.S. Energy Secretary Steven Chu suggested that the U.S. is behind other countries in high-tech green manufacturing areas such as solar photovoltaic technology, hybrid vehicle batteries and high-voltage transmission lines, and he urged aggressive action to promote these and other emerging green technologies.  U.S. Rep. Bobby Rush (D-IL) sounded similar themes in opening a recent hearing before the House Subcommittee on Commerce, Trade and Consumer Protection, on the topic “Growing U.S. Trade in Green Technology,” where he exhorted the U.S. to adopt “a strong long term export promotion policy to turn our economy toward what will make us a global leader.” 

On the other hand, government assistance programs intended to stimulate production and export of specific technologies may fall within the definition of “subsidy” in the WTO Agreement on Subsidies and Countervailing Measures (SCM Agreement).  Such subsidies, when found to be conferred on specific industries (and when other conditions set out in the SCM Agreement are satisfied), may be countervailed through the imposition of import duties that offset the competitive advantage bestowed by the subsidies.  The SCM Agreement contains no exception for subsidies that purport to advance environmental purposes.  In 1995, when the SCM Agreement became effective, it included exceptions for certain environmental subsidies.  These exceptions lapsed in 2000, however, leaving subsidy programs with purported environmental purposes vulnerable to countervailing duty actions.

The U.S. and its major trading partners - many of whom are actively promoting emerging green energy technologies - will need to remain cognizant of the risk that their promotion of domestic champions could also spur trade friction.

For further information about this topic, please contact Akin Gump.