Hedging Climate Bets: Hurricane Sandy and Climate Adaptation
With environmental issues, crisis often spurs action. Nuclear safety was ramped up after Three Mile Island. Hazardous waste laws were strengthened after Love Canal. And oil transport laws were refined after the Exxon Valdez spill.
Along the same lines, Hurricane Sandy has generated renewed attention to the potential effects of climate change and the issue of climate adaptation. Hurricane Sandy impacted numerous lives and the costs to New York State alone are estimated at over $40 billion. New York Governor Andrew Cuomo’s statement in the aftermath of Hurricane Sandy illustrates the impact it had on those who experienced the hurricane or observed its effects:
Extreme weather is the new normal. In the past two years, we have had two storms, each with the odds of a 100-year occurrence. Debating why does not lead to solutions — it leads to gridlock. The denial and deliberation from extremists on both sides about the causes of climate change are distracting us from addressing its inarguable effects. Recent events demand that we get serious once and for all. . . . We need to act, not simply react. (New York Daily News, November 15, 2012.)
On the other side of the country, California has been looking at climate change impacts and adaptation strategies for several years. As part of these efforts, California released a report earlier this year titled: “Our Changing Climate 2012: Vulnerability and Adaptation to the Increasing Risks from Climate Change in California.” The report predicts that “[t]emperatures in California will rise significantly during this century . . . regardless of the climate model used to predict future warming.” The report also estimates that sea level along California’s coast could rise as much as 10 to 18 inches by 2050. According to the report, such arise would substantially increase the frequency of coastal storms with the potential to harm people and damage property. The potential financial implications are substantial: California currently has $50 billion worth of property and at least 260,000 people located in areas vulnerable to the 100-year coastal flood.
The situations in New York and California indicate that 2013 may be the year that governments begin to take action to prepare for the potential effects of climate change.
Climate Change in Context
When evaluating whether to move forward with climate adaptation strategies, it is appropriate to consider the larger context of climate change.
Climate change science is complicated, and it is not possible to reach conclusions based on definitive scientific proof. Nonetheless, scientists have attempted to identify a target threshold for maximum greenhouse gas (“GHG”) concentrations in the atmosphere that would avoid the most severe effects of climate change. In this regard, the 2009 Copenhagen Accord expressed the “scientific view” that temperature increases should not rise more than 2 degrees Celsius (about 3.6 degrees Fahrenheit) if we are to avoid “dangerous anthropogenic interference with the climate system.” (As a point of comparison, global temperatures have already increased about 0.8 degrees Celsius, 1.4 degrees Fahrenheit, in the industrial era.)
Many scientists and policymakers believe that keeping temperature increases below the 2 degree threshold will be very difficult and some have expressed the opinion that meeting this goal is not achievable. As one recent example, a November 2012, PricewaterhouseCoopers LLP study evaluated the amount of global GHG emission reductions needed to stay below the 2 degree threshold and concluded that “[g]overnments’ ambitions to limit warming to 2°C appear highly unrealistic” and it is “time to plan for a warmer world.”
In light of this research, governments may look to address GHG emission levels and prepare for the predicted effects of climate change.
Being Prepared for Climate Adaptation
As discussions about climate adaptation move from general study to consideration of specific projects, a number of financial, technical, and legal issues will come to the fore.
In the current era of budget limits, funding will undoubtedly be a subject of debate. California provides a good example. In November, California’s Air Resources Board (“CARB”) held the first of a number of auctions of GHG emission “allowances” under its cap and trade program. The auction generated approximately $289 million in revenues, and revenues are predicted to increase substantially over time, with annual revenues estimated to reach a level of $2 billion to $10 billion after the first few years of the program. (Note: CARB has been sued by the California Chamber of Commerce to prohibit the sale of allowances to generate revenues.) Under current state law, the cap and trade auction revenues must be spent on actions that “facilitate the achievement of reductions of greenhouse gas emissions,” but the Legislature is likely to consider whether some of this money should be directed to climate adaptation.
Whether in California or elsewhere, if public funding is going to be allocated to climate adaptation, those with an interest in specific types of projects may want to weigh in on funding discussions to ensure that decision-makers are well informed when establishing funding criteria.
Additionally, where policies and guidance documents have been developed, project proponents will need to review those documents and incorporate guidance and suggestions into project design and review. As an example, in September 2012, California’s Emergency Management Agency and Natural Resources Agency jointly released the “California Adaptation Planning Guide” (“APG”) to assist regional and local communities to proactively address the possible consequences of climate change. The APG provides extensive guidance concerning the development of climate adaptation strategies. A project proponent in California seeking funding would need to make sure that its project had been evaluated using the criteria and guidance provided in the APG.
Finally, any climate adaptation project will need be evaluated based on laws and regulations. The legal issues range from questions of consistency with local planning and zoning requirements to state and federal coastal zone and wetlands regulations.
Future Climate Change Developments
Over the past few years, in the area of climate change, California has been the primary focus of attention as a result of its AB 32 program to reduce GHG emissions. The federal government and other states have made more modest efforts, due at least in part to the continuing economic recession.
New developments like Hurricane Sandy are one potential catalyst for initiation of efforts related to climate change, but this is not limited to climate adaptation. In Washington DC, the idea of a carbon tax is being floated as part of discussions on how to address federal budget issues. Additionally, the U.S. Environmental Protection Agency (“EPA”) has been moving forward with several regulations to address GHG emissions under the Clean Air Act. Nonetheless, in mid December a number of states provided notice of intent to sue EPA to require additional regulation of methane emissions from oil and gas drilling.
The implication of these developments is that climate change issues will likely be a subject of a lot of activity in 2013 and beyond. It will be important to keep an eye on these developments.
Marc Luesebrink is of counsel in the Los Angeles office of Manatt, Phelps & Phillips. He has extensive experience advising both private industry and public sector clients on environmental and land use matters. Earlier in his career, he served as a Senior Attorney at Southern California Edison and Deputy Attorney General in the Office of the California Attorney General. Mr. Luesebrink can be reached at (310) 312-4261 or firstname.lastname@example.org.
This column is part of a series of articles by law firm Manatt, Phelps & Phillips, LLP’s Energy, Environment & Natural Resources practice. Earlier columns have discussed State-Level Chemical Regulation, California’s Pharmaceutical Waste Handling Law, Green Chemistry Regulation, The Case for Dam Removal, Sustainable/Energy Retrofits of Commercial Buildings, Demand-Response and Energy Efficiency Programs, California’s Cap and Trade Program, Demise of Redevelopment in California, What’s Next for the Renewable Power Industry and Renewable Energy Projects On Tribal Lands.
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