It is widely assumed that the focal point of any comprehensive carbon emissions policy will be a cap and trade market. Emission allowances are capped at a baseline, and then diminish over time. Companies that come in under the cap have credits to sell. Companies that exceed the limit must buy allowances on the market. The market is simple in concept, but there are innumerable variables to consider.
After a law is passed, focus shifts to the federal agencies, primarily EPA. The notice and comment process for regulations governing the program will be as complicated as the legislation process. Then comes litigation.
Mercury and other toxic emissions emerge as priority targets in the new administration's war on pollution.
When it comes to air pollutants, there's no doubt carbon dioxide is the 800-pound gorilla in the room. For the past several years, the potentially devastating impact of carbon-generated climate change has dominated the national debate and superseded worries about the health impact of other air-born toxins in the public mind. That dovetailed with the Bush administration's laissez faire attitude toward environmental controls, resulting in a period of watered down regulation and relaxed enforcement of federal Clean Air Act standards covering mercury, ozone and other pollutants that endanger human health.
Left in Limbo
One major regulatory issue affecting a wide swath of industries--from utilities to cement plants to brewers--is clarification of New Source Review (NSR) standards, which for three decades have spawned confusion and litigation. Essentially, NSR requires that old plants undergoing major modification meet the higher emissions standards required of new sources of pollution. The Bush EPA proposed several changes to the NSR rules, some still pending and others struck down by the D.C. Circuit. Among the proposed changes now in limbo is one that attempted to clarify a key point of contention: A series of relatively small modifications to a plant can be aggregated to constitute a "major" modification that triggers NSR, but over how many years can that aggregation extend?
Pending litigation and new legislation will shape the Obama administration's policies on water pollution.
Just a day after President Obama's inauguration, the director of the White House Office of Management and Budget released a memo drawing a line between the new administration and the previous president's environmental policies.
A limited number of industries will feel most of the effects from shifting water regulations. Agricultural, manufacturing, industrial and mining operations deal most frequently with the problem of water pollution. And for environmentalists, lobbying the Obama administration to restrict mountaintop coal mining is a top priority.
The stimulus and expected energy legislation promise to put renewable energy companies back on track.
Ask around the renewable energy sector about how business is going now and the story you get is almost invariably split into the bad news and the good news. Before last fall, it was all good news.
The stimulus package also addresses lack of financing, the other major problem born of the economic downturn. Although National Wind has seen more interest than ever before, "the credit markets are a real problem for us," Steinberg says. "We had four project closings that were scheduled for the fourth quarter of 2008, all of which were delayed because of financing reasons." SunEdison has seen similar credit issues with the big box retailers with which it partners.
The In-house Investment
Obama adviser sees opportunity for legal departments to shape changing environmental policy.
Howard Learner, president and executive director of the Environmental Law & Policy Center, served as one of President Obama's environmental advisers during the 2008 campaign. While his official role ended Nov. 4, Learner remains involved in a variety of ways with the administration's federal clean energy and environmental policy. He talked to InsideCounsel about the implications of those policies.