Tag: international environmental law

The Logic of Sue and Settle

WATER_Harpers Ferry_MHoldenBy Daniel Carpenter-Gold—May 6 at 5:46 p.m.

Courtney McVean and Justin Pidot’s article, Environmental Settlements and Administrative Law, appearing in Volume 39.1 of the Harvard Environmental Law Review, addresses the practice of federal agencies settling with interest groups in litigation over the agencies’ regulatory practices. This “sue and settle” practice is not new, but its use, particularly by the Environmental Protection Agency (“EPA”), has received increased resistance in recent years—the Chamber of Commerce, Center for Regulatory Solutions, and American Legislative Exchange Council have each published documents decrying EPA’s settlements in challenges to regulations brought by environmental organizations.

The article explains that “sue and settle” is appropriate, both as a legal question and a regulatory tool. Through a series of case studies, McVean and Pidot show that, while settlements may require an agency to allocate resources within their budget, take additional procedural steps, or even take action on a regulation by a certain deadline, these settlements remain within the bounds of agency discretion. Furthermore, the authors argue, the judiciary is both willing and able to refuse settlements or consent decrees that require agencies to act improperly.

McVean and Pidot do an excellent job of refuting the claim that agencies’ practice of settling with interest groups is inappropriate. But why is settlement such a popular tool in the first place?

As the authors note, a desire to conserve agency resources might not be as important as it would seem, since the Department of Justice—which would represent the agencies—almost never charges for its services. However, a potential reason for settlement is concern about setting legal precedent: as other scholarship has noted, defendants who expect to face many similar cases might be expected to pick to litigate only the cases they are most likely to win, and to either delay or settle any cases brought prior to winning favorable litigation to prevent the development of adverse precedent. Agencies might be slightly more constrained in this approach than other defendants because they will almost always be litigating in the D.C. Circuit—but this also makes the precedent of that court all the more crucial.

A third reason to pursue settlements is likely unique to agency suits: a desire to tie the hands of the agency. In addition to the substantial requirements that stem from the Administrative Procedure Act, agencies face vicious political and public-opinion battles in what has been called the “blood sport” of contemporary regulatory politics. So, although it might seem like a constraint on agency discretion, a binding agreement to take steps toward regulation could actually serve as a shield against political pressure to delay regulatory action.

Seen in this light, settlements are not just acceptable under administrative law, they might even be preferable in some circumstances. A recent example is a consent decree between EPA and a group of environmental organizations requiring the agency to “tak[e] final action” on proposed coal-ash regulations. EPA had attempted to formulate new regulations after a high-profile 2008 spill, but, even though the agency had resolved to issue a proposal by the end of 2009, it failed to do so due in part to industry pressure. National politics around the 2012 election led to further delay, and the regulation remained stalled until Earthjustice mounted a legal challenge to EPA’s inaction, resulting in a settlement under which EPA agreed to adopt new rules. As a result, EPA promulgated a promising (though perhaps not perfect) rule to regulate coal ash at the end of 2014.

Obviously it is impossible to know whether EPA administrators Lisa Jackson or Gina McCarthy would have rather issued regulations at an earlier date. But the fact that EPA had gone so far as to set a deadline for itself in 2009 indicates that it had hoped to be able to resolve the issue one way or the other. At least partially due to external resistance to further regulations on the coal industry, however, the regulation was pushed off for years, until a suit and settlement put the EPA back on track. It is hard not to see that as a benefit—not only for the environmental groups, but also for the agency itself.

Settling Accounts from the BP Gulf Oil Spill

800px-Defense.gov_photo_essay_100506-N-6070S-819By Elinor Tarlow — October 29 at 6:22 p.m.

More than four years ago, BP’s Macondo well exploded, killing 11 men and spewing millions of barrels of oil into the Gulf of Mexico. The surrounding waterways and marine life still bear the scars of the explosion: brightly colored coral colonies have turned brown and dull, some species of fish have developed heart and other deformities, and more than 900 bottlenose dolphins have been found dead or stranded since the explosion.

Although the Gulf States currently lack sufficient resources to assess the extent of the environmental damage and to remedy it appropriately, two recent legal developments lay the groundwork for distributing long-awaited funds to the states.

First, earlier this month, the Treasury Department finalized rules governing a trust fund that will distribute money to the Gulf States for environmental and economic restoration. Certain state and local governments may now apply for grants to support the recovery of communities affected by the oil spill.

The fund, which Congress established in June 2012 as part of the RESTORE Act, will receive 80 percent of the administrative and civil penalties paid to the United States under the Clean Water Act (CWA) by the parties responsible for the oil spill. A portion of these penalties will be distributed among five Gulf States—Florida, Mississippi, Alabama, Louisiana, and Texas.

Although there is currently $653 million available in the trust fund (from the $1.4 billion in fines Transocean paid in an earlier settlement), significantly more funding likely will come from another source—the CWA civil fines that BP will have to pay for its contribution in causing the oil spill.

Second, U.S. District Judge Carl Barbier recently issued a decision that provides some indication of how much money BP will have to pay for violating the CWA and, therefore, how much money the Gulf States ultimately will receive from the fund.

Under the CWA, a polluter must pay civil penalties of $1,100 for each barrel of oil spilled. The CWA provides an enhancement penalty, which imposes fines that are nearly four times as much per barrel if the polluter was “grossly negligent” in causing the spill.

Last month Barbier found that BP’s conduct leading up to the oil spill constituted “gross negligence.” Barbier defined “gross negligence” as similar to recklessness—“an extreme departure from the care required under the circumstances or a failure to exercise even slight care”—and found that because deepwater drilling is such an inherently risky operation, BP employees fell below this standard in two ways. First, Barbier determined that two BP employees were “grossly negligent” when they ignored the results of a critical safety test and decided not to investigate or notify anyone of the clear indications that the well was not safe to drill. Second, Barbier also found that a series of eight actions, including BP’s decision to drill the final 100 feet of the well with little or no margin, cumulatively constituted “gross negligence.”

As a result of Barbier’s determination, BP may pay civil fines under the CWA for as much as $18 billion. Barbier will conduct proceedings to determine the exact amount in January 2015.

This money, though, likely will not become available to the Gulf States anytime soon. In part because the fine is so large, BP will try to challenge Barbier’s determination of gross negligence and the ultimate penalty assessment. BP initially set aside only $3.5 billion for its civil fines under the CWA—roughly one-fifth of what Barbier could impose. And such a substantial fine could significantly affect the company’s economic outlook. To put the fine in context, $18 billion in penalties would be $6 billion more than BP collected in profits in 2012.

Indeed, BP has already appealed Barbier’s decision, alleging his opinion improperly relied on expert evidence that was excluded at trial. BP is now asking Barbier either to revise his ruling to exclude that evidence or to hold a new trial to allow BP to support its position. And BP has stated that, when Barbier begins the penalty proceedings, it will try to show that its conduct merits a penalty less than the $18 billion maximum.

The finalization of rules for the trust fund and Barbier’s decision to expose BP to enhanced penalties under the CWA are important steps in channeling much-needed money to the Gulf States for environmental restoration. But these are merely first steps. As BP winds its way through the court system, it may be some time before the Gulf States know exactly how much money they will be allocated and when they will have access to such funds. In the meantime, the fate of the Gulf States’ waterways and marine life hang in the balance.

Promises and Pitfalls in China’s New Environmental Protection Law

file0001225592472(1)By Daniel Carpenter-Gold—September 14 at 6:30 p.m.

To read more on this topic, look for Mr. Carpenter-Gold’s student note in the upcoming Volume 39.1 of the Harvard Environmental Law Review.

Chinese environmental policy has been rapidly modernizing over the past few years, likely in response to highly visible pollution. Among these changes, the Environmental Protection Law (EPL) has been almost completely rewritten to greatly strengthen the country’s environmental law regime. One-off fines (criticized as being far less than the actual cost of compliance with the law) are out; daily penalties (Art. 59), confiscation of equipment (Art. 25), and even jail time for “the person directly in charge” of the polluting entity (Art. 63) are in. The groundwork has been laid for a comprehensive emissions permitting system (Art. 45). Regions which fail to meet environmental targets designated by the central government will face blanket suspensions of the right to undertake new construction projects (Art. 44). Finally, a number of new avenues for public participation have been opened up (Arts. 53–58). Significant among these is the right, for some organizations, to bring litigation in the public interest against polluters (Art. 58).

Many of these provisions will be familiar to students and practitioners of US environmental law. This is no accident—substantial effort, by NGOs and the US government alike, has gone into encouraging the Chinese government to adopt more Western environmental standards. These projects have run the gamut from regular visits by EPA’s general counsel, to experts’ reports, to study tours for academics and practitioners, and they have paid off in the new EPL, whose language equals or even exceeds that of US environmental legislation.

In addition to borrowing from international experience, China has used its own local governments to experiment with expanded standing provisions. Environmental public-interest litigation in China has, over the past decade, been slowly introduced in some counties and municipalities. Although cases under these regulations have been almost exclusively brought by government-organized NGOs, they seemed to have demonstrated the viability of a Chinese environmental public-interest litigation system.

The central government, apparently encouraged both by the international community and by the success of such provisions at the local level, amended the Civil Procedure Law (CPL) in 2012 to grant standing to “relevant organizations” that bring lawsuits to address environmental harms. This should have enabled a new wave of litigation from environmental NGOs. Indeed, high-powered organizations such as the All-China Environment Federation attempted to file a number of cases after the change. However, outside of the regions which already had provided for environmental public-interest litigation, the courts have universally refused to allow cases brought under the amended law, offering only thin excuses or none at all.

Why couldn’t this policy, which has been in use for years in some parts of China and for decades abroad (with no greater specificity), succeed at the national level? The answer lies in the particular structure of China’s judiciary: the local governments in China control the budget and personnel decisions of local courts. Where the local government does not wish to have the expanded regulatory oversight that public-interest litigation brings, it can easily pressure the courts into refusing the cases. Neither US nor local jurisdictions which had implemented expanded standing provisions had to cope with the divide between central and local governments: in the US this was not an issue because of American judicial independence, and the Chinese localities which allowed environmental public-interest litigation were presumably already supportive of environmental protection.

Regulatory decisions are always of uncertain impact, and a country can be forgiven for taking paths already trod rather than experimenting on their own people. But borrowing policies from other countries, or even from their own subunits, can only work to the extent that the borrower carefully evaluates the differences between the two systems. In amending the CPL, China seems to have overlooked the problem of local-government resistance, presumably because the cases which were used in developing the law did not have this problem.

The experience of the 2012 CPL suggests that the public interest litigation provisions of the Environmental Protection Law may be weaker in practice than they appear on paper. The new law asks a lot of local governments, and particularly local Environmental Protection Bureaus (EPBs), the local-level agencies in charge of enforcing most environmental regulations, which are beholden to the governments at their level to the same extent that the local courts are. However, the EPL takes some steps toward strengthening central control over EPBs by allowing EPBs at a higher governmental level to discipline EPBs within their jurisdiction (Art. 67, for example). There is also talk of increasing central control of the court system, which could remove some of the local governments’ influence. There is likely to remain a substantial gap between the law on paper and the law as enforced, but the overall trend is toward strengthening governance and the rule of law. That’s good news for China’s environment.

Unilateral Climate Action and Collective Change: What Can University Divestment Do?

Smokestack PhotoBy Daniel Carpenter-Gold — June 2 at 5:40pm

This blog post contains the views of the author alone, and does not necessarily reflect the opinions of Professor Coleman or ELR staff.

“What difference do you think you can make? One man in all this madness?”

-First Sergeant Edward Welsh, The Thin Red Line

Scholars have come to recognize climate change as “the quintessential global-scale collective action problem”—so large that even superpowers cannot tackle it unilaterally. But after two decades of painfully slow multilateral negotiations, commentators have begun reexamining the potential for action by individual states. Among them is James Coleman, Assistant Professor at the University of Calgary’s Faculty of Law, whose article, “Unilateral Climate Regulation,” we had the privilege of publishing in the latest volume of the Harvard Environmental Law Review.

Unilateral action, Professor Coleman’s argument goes, can have a disproportionately large and positive impact in two ways. First, it can provide an effective model to states that might not have the wherewithal to design their own mitigation strategies. For example, if the United States designs a simple, transparent system for regulating greenhouse-gas emissions other countries can copy it, thereby lowering the costs of implementing their own climate policies.

Second, countries may implement policies contingent on other states’ mitigation efforts—a “matching contribution” approach familiar to anyone who has ever sat through an NPR pledge drive. In this scenario, the US might agree to implement policies to lower its carbon emission by, say, 1 billion units, provided that China do the same. This effectively doubles the benefit to China of reducing its greenhouse-gas emission: at the cost of 1 billion units in reductions, China would receive the benefit of a 2 billion-unit reduction in global emissions.

Perhaps the most striking example of unilateral climate action is the just-released EPA decision to regulate emissions from coal-fired power plants. Alongside the obvious benefit of eliminating a substantial source of CO2 emissions, the new rule may provide a model for other countries to limit their own coal pollution. This effect will likely be all the stronger because of the visibility and importance of the United States to other states.

But Professor Coleman’s point also applies to smaller-scale efforts to tackle climate change. One example of action stalling on the perennial question, “what can one actor do?” is the divestment effort at Harvard. As President Drew Faust put it in an open letter to the community last October, “Universities own a very small fraction of the market capitalization of fossil fuel companies. . . . Divestment is likely to have negligible financial impact on the affected companies.”

Professor Coleman’s arguments regarding unilateral state action suggest at least a partial alternative, where Harvard would use informational effects and matching commitments to give its investment decisions greater clout.

First, divestment could improve the information available to other institutions. As an example, imagine that the university decides to divest from any energy company with less than $3 billion invested in renewables and reinvest it sustainably: Harvard would first determine what counts as renewable energy investment, then compile a list of energy companies’ investment in renewables, then identify other, “greener” investments. By making this research publicly available, Harvard could spare other institutions also interested in divestment the cost of making a similar investigation. Ultimately, this would tend to increase the number of divestors, magnifying Harvard’s impact.

The second strategy that Professor Coleman’s article could suggest to divestors is to avoid collective-action problems by implementing matching commitments. This approach, termed “strategic matching” in economics, envisions a large group of institutions all agreeing to divest if each other institution does so as well—just as many treaties do not go into effect until a certain number of state parties ratify them. The advantage to this approach is that no institution would be required to take any action until the group formed, at which point the aggregate benefit (in terms of pressure on the industry) will be many times larger than for any individual divestment action.

It is interesting to note that these strategies are used by the two responsible-investment organizations to which Harvard has recently become a signatory: the Principles for Responsible Investment (PRI) and the Carbon Disclosure Project (CDP). (It should be noted that many faculty members disagree with this approach.)The PRI Association requires that signatories to the PRI complete a self-assessment on their consideration of environmental, social, and governance (ESG) factors in their investment policy and then publishes a compilation of the results, along with an annual report analyzing trends in and case studies of ESG-conscious investment. In other words, they allow institutions to increase the impact of their ESG-focused decisions by providing information which both signals their commitment to responsible investing and is useful to other investors.

The CDP, on the other hand, focuses on information about companies in which its signatories may be invested. It allows signatories to endorse surveys of corporations’ environmental policies, and then provides the resultant data only to those organizations which agreed to endorse (and thereby lend the CDP reputational force). By withholding information until an organization endorses, the CDP essentially implements an asymmetrical matching-commitment strategy: it increases its own impact by requiring its signatories to help gather information before they get the results.

The lesson here is that there’s no such thing as acting alone. Every forward step encourages others, and by taking advantage of this any actor—whether a country, a university, or a single person—can have a much greater impact than its limited resources would suggest.

The Search for Sustainable Legitimacy: Environmental Law and Bureaucracy in China

By Alex L. Wang

During China’s 11th five-year plan (2006–10), bureaucrats began to take substantial actions on environmental protection, making major investments in pollution control infrastructure and forcing the shutdown of thousands of outdated facilities and production lines. This was not accomplished through meaningful reform of a notoriously weak environmental law regime. Rather, Chinese authorities turned to cadre evaluation — the system for top-down bureaucratic personnel assessments — to set high-priority, quantitative environmental targets designed to mobilize governors, mayors, and state-owned enterprise leaders in every corner of China’s massive bureaucracy.

While conventional analysis has primarily viewed this effort through the lens of environmental protection, this Article argues that “environmental cadre evaluation” is better understood as something more fundamental. Chinese authorities have embraced environmental cadre evaluation as a tool for limiting risks to the party-state’s hold on power, using environmental protection in an unexpected way to deliver economic growth and social stability. Environmental objectives have been elevated, but primarily to the extent they support these other values as well.

But implementation problems inherent to this top-down approach abound. Local agents falsify information and shut down pollution control equipment. Closed factories are secretly reopened. These problems create an imperative for reform. Of the initiatives already under way, governance reforms that strengthen public supervision have particular advantages for resolving institutional pathologies that limit the effectiveness of China’s environmental efforts.

By examining why and how Chinese leaders have elevated environmental priorities through the cadre evaluation system, this Article seeks to offer insight into a number of broader ongoing debates — about environmental regulation in developing countries, accountability and regime survival in authoritarian states, and legal development in China.

Cite as: Alex L. Wang, The Search for Sustainable Legitimacy: Environmental Law and Bureaucracy in China, 37 Harv. Envtl. L. Rev. 365 (2013).

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Responses to Climate Migration

By Katrina M. Wyman

In recent years there have been suggestions that climate change might generate 200 million or more migrants by 2050. In response to these suggestions, and concerns that existing law and policy will be inadequate to deal with the expected displacement, there recently have been several proposals for new legally binding multilateral instruments specifically addressing climate migration.

This Article makes three contributions to the nascent literature on the legal and policy responses to migration induced by climate change.

First, it identifies the two principal gaps in existing law and policy that underpin to a significant extent the recent proposals for a new binding multilateral instrument, describing these gaps as the “rights” gap and the “funding” gap.

Second, this Article analyzes three of the leading proposals for a new binding multilateral instrument. It identifies the ways that these proposals would respond to the rights and funding gaps and emphasizes the proposals’ limitations.

Third, this Article emphasizes that addressing climate migration ultimately requires increasing the resilience of communities especially vulnerable to climate change. It then identifies ways to mitigate the effects of the rights and funding gaps by reducing existing vulnerabilities to climate change, without a new binding multilateral instrument. While a series of measures relying largely on existing legal and policy tools may seem less satisfying than proposals for a new binding multilateral instrument, these measures are more likely to address the concerns about human vulnerability to climate change that the proposals for new binding multilateral instruments have admirably highlighted.

Cite as: Katrina M. Wyman, Responses to Climate Migration, 37 Harv. Envtl. L. Rev. 167 (2013).

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Toward an International Aviation Emissions Agreement

By Brian F. Havel & Gabriel S. Sanchez

It is impossible to predict the eventual stopping place of the climate change discourse. If current evidence is to be believed, international dialogue will intensify as we draw nearer to the hypothesized “zero hour” of irreparable catastrophe. Stepping back from any prophesies of doom, we conclude with two statements that we believe encapsulate this Article’s contribution to the discourse. First, a plausible aviation emissions reduction agreement can ensure that aviation “does its part” by reducing the sector’s emissions to a sustainable level without sacrificing its economic viability. Second, the convergence of stakeholder interests within international aviation will further ensure that the agreement can serve as a lead sector for future (and wider) international collaboration on climate change. And although the agreement framework proposed here is incremental rather than “big bang,” the principle of International Paretianism indicates that the former is more feasible than the latter. Under the canopy of a sectoral treaty among like-minded states, international aviation can responsibly reduce its environmental impact while remaining a force for dynamic economic growth in the coming century.

Cite as: Brian F. Havel & Gabriel S. Sanchez, Toward an International Aviation Emissions Agreement, 36 Harv. Envtl. L. Rev. 351 (2012).

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Debt, Nature, and Indigenous Rights: Twenty-five Years of Debt-for-Nature Evolution

By Jared E. Knicley

Debt-for-nature swaps are an innovative and potentially powerful mechanism for addressing the significant issues of indebtedness and environmental degradation in the developing world. Over the past twenty-five years, debt-for-nature swaps have evolved across many dimensions to their present-day typology of bilateral fund-generators that capitalize projects fairly describable as both “environmental” and “developmental.” Through a study of four representative debt-for-nature swaps, this Article analyzes the original conception of the debt-for-nature swap and the evolution of swap typologies as they relate to the conception and realization of indigenous rights. It further argues that while the trend in debt-for-nature swaps has been the increased participation of indigenous groups, the actual level of participation envisioned under debt-for-nature statutes is ambiguous and, thus, the level of protection of indigenous rights varies from swap to swap. The Article concludes by providing several procedural recommendations for improving the realization of indigenous rights under debt-for-nature swaps and by critically analyzing the potential evolutionary trajectory of debt-for-nature swaps with regard to impacts on indigenous rights.

Cite as: Jared E. Knicley, Debt, Nature, and Indigenous Rights: Twenty-five Years of Debt-for-Nature Evolution, 36 Harv. Envtl. L. Rev. 79 (2012).

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