NEWS OF THE WEEK
CLIMATE: Supreme Court ruling is a victory for utilities, environmentalists
F
EDERAL COURTS cannot set limits on carbon
dioxide from power plants in response to lawsuits claiming that this pollution causes negative health effects and environmental damage, the U.S. Supreme Court ruled last week. Regulating CO2 is a job Congress reserved for the Environmental Protection Agency under the Clean Air Act, the court found. The high court sided with five large utilities in a suit brought by several states and three nonprofit land trusts over the facilities’ emissions. The utilities— American Electric Power Co., Southern Co., Xcel Energy, Cinergy Corp., and the Tennessee Valley Authority—together release about 650 million tons of CO2 per year. That’s a quarter of the CO2 emissions from the U.S. electricity-generating sector. Environmental groups also claimed victory in the court’s 8-0 ruling. “The Supreme Court strongly underscored EPA’s responsibility under the law to address climate pollution that threatens the health and wellbeing of our nation,” said Fred Krupp, president of the Environmental Defense Fund. In the original case, California, Connecticut, Iowa, New York, Rhode Island, and Vermont claimed that the utilities’ emissions put health, public lands, and infrastructure at risk as a result of climate change. Two other states initially in the suit, New Jersey and Wisconsin, dropped out of the litigation. The states and land trusts asked a federal trial court
to cap each utility’s CO2 emissions and lower these limits every year for a decade. After the trial court dismissed the suit, the U.S. Court of Appeals for the 2nd Circuit, based in New York City, determined that the case could continue until EPA establishes regulations to limit CO2 releases from utilities. Under an unrelated court settlement, EPA is to propose such emission controls this year and finalize them by May 2012. The utilities appealed the circuit court ruling. The Supreme Court heard the appeal in April. Writing for the high court, Justice Ruth Bader Ginsburg said, “Congress delegated to EPA the decision whether and how to regulate carbon dioxide emissions from power plants.” This means federal courts can’t establish emission caps for utilities in response to claims that CO2 is damaging to health and the environment, the decision said. Michael B. Gerrard, director of the Center for Climate Change Law at Columbia Law School, said the Supreme Court left open a key legal issue: whether the Clean Air Act prevents environmental groups or others seeking limits on CO2 emissions from suing utilities in state courts. Gerrard expects this type of suit to be filed in the wake of the high court’s decision. Justice Sonia M. Sotomayor recused herself from the case, American Electric Power v. Connecticut. Before her appointment to the high court, Sotomayor was a member of the three-judge panel in the 2nd Circuit that heard the case, but she was not involved in reaching the appeals court’s decision.—CHERYL HOGUE DR EAM ST IM E
EPA, NOT FEDERAL COURTS, CAN LIMIT CO2 EMISSIONS
The high court said only EPA can set CO2 limits.
CLIMATE CHANGE Businesses see opportunity in adaptation, report finds Companies that are able to adapt to climate change will gain a competitive business advantage in the future, according to a new report prepared by the United Nations Global Compact, a corporate network committed to social and environmental goals, in cooperation with the UN Environment Program and allied social justice and environmental groups. The report is based on a survey of 72 global companies in a variety of industries, including makers of chemicals and pharmaceuticals such as Bayer, Dow Chemical, DuPont, Mitsui Chemicals, Novartis, Novozymes, and Sasol. The survey was con-
ducted under the auspices of the UN. Among those surveyed, 86% said responding to climate risks or investing in ways to adapt to those risks is a business opportunity. However, the survey found that executives aren’t always sure what climate adaptation means to their companies and the markets they serve. In addition, respondents said that they find it difficult to incorporate climate-change data into strategic analyses and that they would like more information on adaptation costs and benefits. Among the report’s recommendations are that firms should align business ob-
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jectives with climate-change adaptation and build a portfolio of climate-resistant goods and services. The report itself anticipates two upcoming events: this fall’s UN Framework Convention on Climate Change in Durban, South Africa, and next year’s UN Conference on Sustainable Development in Rio de Janeiro, also called Rio+20 because planners hope to foster a new global compact on climate change 20 years after the last such major effort that took place there. The report is intended to enliven policy discussions at those events.—MARC REISCH
