Green Building Law Update

The Intersection of Real Estate, Science, and Law

Maryland Supreme Court Dismisses Landmark Climate Case Against Oil Companies

By Stuart Kaplow on Posted in Climate Change, GHG, greenhouse gas

The Supreme Court of Maryland ruled last week, “[t]he question presented in this case is whether Maryland local governments may bring state common law tort claims against 26 multinational oil and gas companies to recover damages caused by global greenhouse gas emissions. We hold that they may not.”

The Court went on to say, “.. we determine that state common law has never applied to the conduct alleged by the local governments” and that such state law claims are both displaced and preempted by federal law, specifically federal common law and the Clean Air Act, because the claims effectively seek to regulate interstate and international air emissions, an area reserved for federal oversight.”

This Maryland case is significant in the wave of climate tort suits brought by states and local governments against fossil fuel companies. The U.S. Supreme Court has recently agreed to hear another of those cases, Suncor Energy Inc. v. County Commissioners of Boulder County, to determine substantially the same issue here: whether federal law (including the Clean Air Act and federal common law) preempts state law tort claims against energy companies for damages from climate change. In that case, originating from Colorado, the state court action was allowed to proceed.

The Maryland case drew the attention of 24 other states, from Alabama to Ohio, which submitted briefs in support of the oil companies.

Specifically, the Supreme Court of Maryland considered three consolidated cases, originally filed in 2018, one case filed in the Circuit Court for Baltimore City and two cases filed in the Circuit Court for Anne Arundel County. In these cases, the Mayor and Council of Baltimore City, Anne Arundel County, and the City of Annapolis filed state common law tort claims against 26 multinational oil and gas companies to recover damages caused by global greenhouse gas emissions. The local governments asserted five causes of action against the defendants, all arising under Maryland law: (1) public nuisance; (2) private nuisance; (3) trespass; (4) negligent failure to warn; and (5) strict liability failure to warn.

The local governments argued that the defendants, individually and collectively, are responsible for extracting, processing, producing, promoting, and marketing fossil fuel products, the normal and intended use of which has led to the emission of a substantial percentage of the total volume of greenhouse gases released into the atmosphere for over 50 years.

The local governments contend that the defendants deceived consumers and the public about the dangers associated with their fossil fuel products when they knew of a direct link between their products and climate change threats, causing sea levels to rise, as well as other physical and environmental impacts, resulting in inundation, destruction, and/or other interference with the local governments’ property and citizenry.

The Circuit Court for Baltimore City and the Circuit Court for Anne Arundel County granted the defendants’ motions to dismiss. The Supreme Court of Maryland affirmed the judgments of the lower courts dismissing the complaints.

Justice Brynja Booth wrote for the majority here, “No amount of creative pleading can masquerade the fact that the local governments are attempting to utilize state law to regulate global conduct that is purportedly causing global harm.”

The Court held that the local governments’ state law claims are displaced and preempted by federal law. The Court determined that the local governments, through their state law claims, are attempting to regulate air emissions. The Court explained that, for over a century, the United States Supreme Court has held that cases involving regulations of interstate pollution arise under federal law. Under the United States Supreme Court’s jurisprudence, any state law claims are displaced by federal common law.

This state court buttressed its opinion with the U.S. Supreme Court decision in American Electric Power Co., Inc. v. Connecticut, 564 U.S. 410 (2011), applying federal preemption.

Finally, the Supreme Court of Maryland held that federal common law would not extend to apply to the local governments’ claims that regulate international conduct.

The rationale of the Court is interesting:

PUBLIC NUISANCE. The Maryland Supreme Court held that the local governments failed to state a claim for public nuisance under Maryland law. Maryland has not expanded the public nuisance doctrine beyond the traditional historical principles embodied in the common law, namely, that a public nuisance action was not regarded as a tort but was instead a public action by a government entity to pursue criminal prosecutions or seek injunctive relief to abate harmful conduct. Additionally, the Court has never recognized a government entity’s ability to recover damages for public nuisance. Moreover, assuming without deciding that there is a public right to be free from adverse effects of climate change, the Court stated that it nonetheless declines to expand Maryland’s common law of public nuisance to govern the conduct alleged in the local governments’ complaints, given the extensive federal statutory and regulatory framework that governs the highly complex conduct of regulating air emissions.

PRIVATE NUISANCE. The Supreme Court held that the local governments failed to state a claim for private nuisance because that tort requires that the plaintiff establish an injury to property that is different in kind from that suffered by the public generally. Here, the injuries alleged by the local governments are not unique or different from any injuries suffered by the public generally.

TRESPASS. The Court held that the local governments’ trespass claim exceeds the bounds of the tort established in Maryland’s case law, which holds that when an adjacent property is invaded by an inanimate or intangible object, the defendant must have some connection or control over that object for a trespass action to lie. The Court agreed with the Circuit Court for Baltimore City that the link between the Defendants’ activities and the harms alleged by the local governments, which are caused by human activities around the world, are far too attenuated to constitute the Defendants’ connection or control over the rainfall and storms that invaded the local governments’ property.

STRICT LIABILITY/ NEGLIGENCE ARISING FROM FAILURE TO WARN. The Court held that the local governments failed to state claims for strict liability and negligent failure to warn. The Court determined that the duty the local governments seek to impose is a duty to warn the entire human race of the effects of climate change. The Court stated that finding such a duty would stretch Maryland tort law beyond manageable bounds.

“The ultimate conduct is the use of greenhouse gases across the globe, and the ultimate harm asserted by the local governments arises from global emissions,” Booth wrote. “The local governments’ police powers do not extend beyond their respective borders and certainly do not authorize the policing of worldwide conduct.”

The majority concluded in a harshly worded rebuke, “Quite simply, the notion that a local government such as Baltimore, Annapolis or Anne Arundel County may pursue state law nuisance claims against the defendants — seeking injunctive relief to abate injuries arising from global greenhouse effects arising from worldwide conduct — is so far afield from any area of traditional state or local responsibility that it cannot be seriously contemplated.”

Read the entire opinion in Mayor & City Council of Baltimore v. B.P. P.L.C., et al.; Anne Arundel County, Maryland v. B.P. P.L.C., et al; City of Annapolis v. B.P. P.L.C., et al., here.

Debunking Myths About Crumb Rubber on Playgrounds – What 100+ Studies Reveal

By Stuart Kaplow on Posted in Environmental, recycling, Sustainability

Few issues illustrate the symbiosis of environmental stewardship and public health as clearly as recycled rubber, commonly known as crumb rubber, used in playground and athletic surfaces. Since its introduction in the 1970s, crumb rubber has been scrutinized, debated, and, at times, misunderstood. Today, the weight of scientific evidence provides a far more settled and reassuring picture.

From an environmental attorney’s perspective, the question is no longer whether crumb rubber poses hypothetical risks, but whether decision makers are appropriately weighing empirical data against perceived concerns. On that score, the record is now clear.

This is not just an issue for public school playgrounds and athletic fields, but also for child care centers with outdoor playgrounds, which have become an increasingly common and strategically valuable use within office parks and elsewhere.

The Scientific Consensus Has Matured

Over the past two decades, more than 100 studies have evaluated the health implications of recycled rubber in playgrounds and synthetic turf. The overwhelming conclusion: there is no credible evidence of significant health risks, including cancer hazards, associated with typical use.

Most notably, the California Office of Environmental Health Hazard Assessment, in collaboration with other state agencies, just released what is arguably the most comprehensive study to date: Synthetic Turf Study: Assessment of Health Risks from Exposure to Chemicals in Crumb Rubber Infill Final Report. This landmark multi year analysis examined 35 fields over a nine year period and assessed exposure across a broad demographic, from toddlers to adults.

Its findings are instructive for any risk analysis, whether by a suburban housewife or corporate counsel:

  • No chemical exposures were identified at levels posing health hazards.
  • Exposure to sensory irritants did not reach harmful thresholds.
  • Non cancer health risks were not significant.
  • Cancer risks associated with crumb rubber were deemed “insignificant.”

These conclusions align with earlier federal research conducted jointly by the U.S. Environmental Protection Agency, Centers for Disease Control and Prevention, and Consumer Product Safety Commission.

For business leaders accustomed to evaluating risk, this level of public agency consistency is significant. The landmark study reflects not only scientific rigor but also a convergence of regulatory perspectives that takes into account the risks of alternative surfaces.

Chemical Exposure: Context Matters

It is true that crumb rubber contains trace chemicals, an inevitable characteristic of any recycled material derived from complex products like tires. However, risk is a function of exposure, not mere presence.

The relevant studies consistently demonstrate that chemical exposures from crumb rubber remain well below established safety thresholds. Even where volatile organic compounds are detected, they do not appear at levels that produce meaningful toxicological effects on humans, wildlife, or surrounding ecosystems.

In other words, the hazard profile exists in theory, but not in practice.

Environmental and Economic Upside

From a sustainability standpoint, crumb rubber exemplifies circular economy principles in action. Americans discard more than 300 million car tires annually, which can be diverted from landfills and repurposed into high performance surfaces.

For companies and municipalities alike, this has dual benefits:

  • Waste reduction: Mitigates landfill burden and illegal tire dumping.
  • Resource efficiency: Extends the lifecycle of existing materials, reducing demand for virgin inputs.

At a time when recycling is under increasing scrutiny, such material reuse is not merely beneficial; it is strategically advantageous.

Safety Performance – A Material Advantage

Beyond environmental considerations, crumb rubber surfaces provide measurable safety benefits, particularly for children, by attenuating impacts and preventing head injuries from falls, exceeding ASTM standards. Compared to traditional materials like wood chips or sand, rubberized surfaces provide:

  • Superior shock absorption, reducing injury severity from falls.
  • Non-slip characteristics, enhancing traction in varied weather conditions.
  • Durability, maintaining consistent performance over time.

This is where the concept of risk benefit asymmetry becomes critical in this Make America Healthy Again moment and beyond. All playground environments carry some inherent risk. The relevant inquiry is whether a given surface reduces the likelihood or severity of injury; more than 200,000 children are treated annually in U.S. emergency rooms for playground related injuries. On that metric, crumb rubber performs well.

There appears to be no reliable total number of playgrounds in the U.S.; however, data indicate that more than 7% of the country could be considered a “play desert” with no access to outdoor play areas, which carry their own, albeit very different, set of risks for children.

Children, as a user group, present unique considerations: repeated exposure over time, unpredictable behavior, and heightened vulnerability to injury. A surface that mitigates impact risk offers tangible, immediate benefits that are not speculative; they are observed and quantifiable.

Addressing the Precautionary Principle

Critics often invoke the precautionary principle, arguing that in the absence of absolute certainty, safer alternatives should be pursued. That principle has an important place in environmental law. But it is not a substitute for evidence.

Here, we are not operating in a vacuum of uncertainty. We have decades of data, extensive peer reviewed research, and comprehensive government studies. The burden of proof has, in effect, been met.

That said, prudent use guidelines remain appropriate. For example, avoiding mouth contact with playground materials, rubber or otherwise, is a common sense recommendation that addresses both hygiene and choking hazards. That is, don’t allow young children to eat the playground surface. This is not an indictment of the material; it reflects responsible supervision standards.

A Turning Point for Decision Makers

Environmental innovation has sometimes produced unintended consequences. That legacy understandably informs skepticism. However, it should not impede progress when evidence supports safety and benefit.

In the case of recycled rubber playground surfaces, the narrative has shifted from suspicion to substantiation.

For business leaders, municipalities, and developers, the implications are clear:

  • The liability profile is now well defined and manageable.
  • The environmental benefits align with sustainability objectives.
  • The safety performance supports duty of care obligations.

In conclusion, crumb rubber is not merely an acceptable option for playgrounds and sport fields; it is, in many instances, the preferable one. The challenge today is not scientific validation, but informed implementation involving an environmental issue important to many Americans.

From EV Mandates to Building Standards – California Lawsuit Could Limit State Climate Regulation

By Stuart Kaplow on Posted in Codes and Regulations, Federal, GHG

The U.S. Department of Transportation filed a lawsuit last Thursday that may reshape the regulatory landscape not only for vehicles, but also climate policy, and even energy use across the country. Be assured, this litigation is about far more than only electric vehicles in California.

The complaint, filed by the Justice Department on behalf of the National Highway Traffic Safety Administration, asks the court to declare that the California Air Resources Board CO2 standards that effectively mandate electric vehicle market share, “.. and all similar CO2 standards are preempted, unlawful, and unenforceable.”

Burning Fuel Necessarily Produces CO2

From a legal perspective, the complaint filed in the United States District Court for the Eastern District of California explains, “for fifty years, the Energy Policy and Conservation Act has required that the National Highway Traffic Safety Administration establish uniform, nationwide vehicle fuel economy standards. Congress unequivocally stated its preference for national uniformity by expressly and impliedly preempting any state laws and regulations that are ‘related to fuel economy standards’ for vehicles covered by federal fuel economy standards, which include light-duty vehicles.”

The complaint alleges that California has now done precisely that.

The complaint goes on to describe, “contrary to this statutory framework, the California Air Resources Board has adopted and enforced its own state standards for light duty vehicles. These regulations impose requirements on vehicle manufacturers that limit fleetwide tailpipe carbon dioxide emissions on the purported ground of reducing global climate change and include zero emission vehicle mandates that establish a de facto market share quota for electric vehicles.”

As NHTSA and the U.S. Environmental Protection Agency have previously publicly said, “any rule that limits tailpipe CO2 emissions is effectively identical to a rule that limits fuel consumption.” Fuel economy standards and carbon dioxide standards are, in the government’s words, “two sides of the same coin.” Because burning fuel necessarily produces carbon dioxide, any regulation that limits CO2 per mile also limits fuel consumption per mile, and vice versa.

That logic leads to the lawsuit’s central claim: CARB’s CO2 limits and zero emission vehicle mandates “are preempted under 49 U.S.C. §32919(a) because they relate to fuel economy standards” already governed at the federal level.

The complaint asks the court to declare the rules unlawful and permanently enjoin California from enforcing them or adopting or enforcing new regulations in this space.

Why This Matters Beyond California

Although this litigation is directed at California regulators, its impact will extend far beyond the state.

At least 13 other states, from Maryland to Oregon, have adopted California’s vehicle standards under provisions of federal environmental law that historically allowed states to follow California’s lead on emissions rules. If the federal government prevails, those states’ regulatory frameworks will also collapse.

From a business perspective, the stakes are substantial. Automakers do not build separate production lines for each state’s standards. When a large state like California sets more aggressive requirements than federal law, manufacturers often adjust their nationwide fleets to comply. That dynamic effectively allows an administrative panel in California to dictate national vehicle markets.

The lawsuit challenges that model directly.

According to the Department of Justice, California’s scheme would force manufacturers to restructure production nationwide to satisfy standards stricter than federal corporate average fuel economy rules. The result, federal officials argue, would be higher vehicle costs, fewer consumer choices, and disruption to interstate commerce.

The policy debate is embedded within a broader federal initiative announced by Transportation Secretary Duffy called “Freedom Means Affordable Cars.” The initiative seeks to reset federal CAFE standards in a way officials say will save Americans $109 billion over five years and reduce the average cost of a new vehicle by roughly $1,000.

A Broader Regulatory Signal

For environmental lawyers and policy analysts, the most consequential aspect of the case lies beyond vehicle standards.

The Justice Department’s Environment and Natural Resources Division has framed the lawsuit as part of a broader effort to challenge state policies that allegedly intrude on federally regulated markets. Principal Deputy Assistant Attorney General Adam Gustafson described the action as a response to “regulatory overreach” by California and other states.

Observers in energy and environmental law circles recognize an additional implication: the legal theory behind this case could apply to other climate driven state regulations.

Some states are currently advancing policies that effectively limit fossil fuel use, ranging from building electrification mandates to building energy performance standards (BEPS). If courts accept the federal government’s argument that CO₂ limits tied to energy consumption are preempted because they regulate fuel economy, similar challenges will emerge in other sectors.

That possibility has particular relevance for commercial real estate owners. A patchwork of aggressive state decarbonization rules is one of the most significant compliance risks facing businesses today (.. whether as a building owner or a tenant within a regulated building). A strong federal preemption ruling could dramatically alter that regulatory landscape.

The Business Takeaway

Uniform federal standards have long been the backbone of interstate commerce in the United States. This lawsuit against CARB raises a fundamental question: should vehicle energy policy be set state by state, or through a single national framework established by Congress?

For business leaders navigating capital investment, supply chains, and long term planning, the answer matters enormously.

The complaint itself is worth reading because it lays out the legal theory in detail and may preview the next phase of federal state climate policy.

However, the courts ultimately rule, this case signals a turning point. The battle over electric vehicles may prove to be only the opening chapter in a much larger debate over the limits of state climate regulation in a nationally integrated economy.

Those in the know explain that this case portends the Federal government intervening, filing suit against Maryland and other states, challenging unconstitutional  BEPS laws as also preempted by the Energy Policy and Conservation Act under the same theory here, drawing a direct relationship between C02 standards, net zero greenhouse gas mandates, banning the use of natural gas and other fossil fuels, “.. and all similar CO2 standards as preempted, unlawful, and unenforceable.”

A Bellwether Greenwashing Ruling – Apple Watch is Carbon Neutral Even if it Is Not

By Stuart Kaplow on Posted in greenwashing

In a decision that may shape the next phase of environment related consumer litigation, a federal judge in California dismissed a proposed class action challenging the “carbon neutral” marketing of the Apple Watch Series 9 by Apple Inc.

The case, Dib v. Apple, provides a loud signal about how U.S. courts may now evaluate the surging number of greenwashing claims even as companies deemphasize environmentally related attributes in their advertising.

This case matters, as we blogged about some weeks ago, in an expanding greenwashing claims landscape spreading across nearly all industries.

Apple’s Carbon Neutral Claim

In 2023, Apple announced what it described as its first “carbon neutral” products, including the Apple Watch Series 9. The company represented that its carbon neutrality strategy reduced roughly 75% of lifecycle emissions through product design, clean energy use, and supply chain changes. The remaining emissions were addressed through “high quality carbon credits from nature-based projects.”

To account for the emissions associated with its 2023 corporate footprint, including the watches, Apple reported retiring approximately 485,000 metric tons of carbon dioxide equivalent through offset projects, primarily the Chyulu Hills Project in Kenya and the Guinan Project in China.

The plaintiffs alleged that those claims were misleading. Their complaint argued that the two offset projects did not provide genuine or “additional” carbon reductions, meaning Apple’s carbon neutrality representations were false.

The Court’s Dismissal

On February 20, Judge Noël Wise of the United States District Court for the Northern District of California granted Apple’s motion to dismiss.

The ruling focused not on whether Apple’s carbon neutrality claim is ultimately correct, but on whether the plaintiffs plausibly alleged deception.

Under California law, a false advertising claim must show that a representation is likely to mislead a “reasonable consumer.” That standard requires demonstrating that a significant portion of consumers could be deceived by the statement in context.

The court found the complaint fell short.

1. Allegations Built on Speculation

The plaintiffs first argued Apple failed to purchase enough offsets to match the emissions associated with Apple Watch production.

But the court concluded that argument rested on speculation. The plaintiffs did not know how many watches Apple actually sold, meaning their calculations of emissions and offset needs were assumptions layered upon assumptions.

As the court wrote, “Every layer of Plaintiffs’ allegations about Apple’s sales of Apple Watches are based on unsubstantiated assumptions.” Without reliable data on sales or emissions, the plaintiffs could not plausibly claim the offsets were insufficient.

2. Unsupported Criticism of Carbon Offsets

The plaintiffs’ second theory challenged the validity of the carbon credits themselves, arguing the projects Apple relied upon overstated the carbon reductions achieved.

But here again, the court found the complaint lacking.

The analysis questioning the carbon credits had been conducted by the plaintiffs’ attorneys rather than independent experts. The court noted the absence of support from scientists, environmental organizations, or government agencies and observed that the methodology behind the critique was not shown to be accepted in scientific circles.

In short, the plaintiffs had not provided credible evidence undermining the use of offsets as credits or the projects’ carbon accounting.

The FTC Green Guides Appear in the Background

Interestingly, the court referenced the FTC Green Guides, guidance that many marketers consider outdated but still influential in U.S. environmental marketing law.

The Green Guides require that environmental claims be supported by a “reasonable basis.” Judge Wise effectively applied that same principle to the plaintiffs’ allegations: if a company must have a reasonable basis to make a claim, a plaintiff must also have a reasonable basis to challenge it. This is the big takeaway from this case.

Because the complaint did not meet that threshold, dismissal was warranted.

Environmental Groups Weigh In

Notably, the Environmental Defense Fund, a known environmental advocacy group, filed an amicus brief supporting dismissal of the lawsuit.

EDF argued that weakly supported litigation could discourage companies from pursuing ambitious climate initiatives. In its view, penalizing companies that attempt to reduce and offset emissions could have a chilling effect on corporate climate action.

That position reflects an emerging debate within the environmental community: how to police greenwashing without discouraging meaningful environmental efforts.

A Sharp Contrast with Europe

The U.S. ruling also contrasts with a decision issued in August 2025 by a court in Frankfurt, Germany, which ordered Apple to stop advertising the certain watches as carbon neutral in that country.

The German court focused on consumer expectations under competition law. It reasoned that because the offset projects Apple relied upon only guaranteed carbon neutrality through 2029, consumers might reasonably assume the neutrality lasts much longer, perhaps until mid century in line with the goals of the Paris Agreement.

The difference illustrates a broader regulatory divide:

  • U.S. laws tend to focus on whether a statement is provably false or deceptive.
  • European rules often evaluate whether claims create misleading consumer impressions even if technically accurate.

Why This Case Matters

Although the plaintiffs have until March 13 to amend their complaint, the decision already signals an important threshold for climate related consumer suits.

Greenwashing claims are proliferating across industries, from consumer products to finance and real estate, but courts are making clear that allegations must be supported by credible data and scientific grounding.

From an environmental lawyer’s perspective, the lesson is not that corporate climate claims are beyond scrutiny. Rather, the lesson is that scrutiny must be rigorous.

Poorly supported litigation risks undermining legitimate enforcement while also creating uncertainty for companies attempting to reduce their climate impacts.

For now, Dib v. Apple stands as a bellwether: in the emerging law of greenwashing, plausible science and factual grounding are the price of admission to the courtroom.

Tokenization – Real Estate Reinvented in the Funding of a Maldives Resort

By Stuart Kaplow on Posted in Codes and Regulations, Environmental

Real estate has long been characterized by friction: high minimum investments, illiquidity, opaque capital stacks, and access largely reserved for institutions. Tokenization challenges that paradigm. A new Maldives resort development provides a real world learning opportunity for how this financial architecture is evolving, and why it matters, including for environmental performance.

In real estate, tokenization converts ownership or financial rights in a physical asset into digital tokens recorded on a blockchain. A traditionally illiquid asset can be divided into programmable digital interests that are transferable and more efficiently administered. In practical terms, tokenization reduces transactional friction, streamlines compliance, and can broaden investor access.

The Project

DarGlobal, in collaboration with The Trump Organization, is developing the planned Trump International Hotel & Resort Maldives, a 100+ villa beach and overwater luxury resort targeted for delivery in 2030. Public materials reference sustainability initiatives, including on site solar, energy efficient systems, and reef restoration programming in recognition of the Maldives’ fragile marine ecosystem.

As an environmental attorney, I do not reflexively equate luxury development with sustainability.  Coastal construction warrants scrutiny, especially for concerns over coral bleaching. Yet the financing structure here is what merits attention: the resort’s development loan is being tokenized.

This proposed project is located 25 minutes by speedboat from Malé, a place I have very much enjoyed visiting, emphasizing seclusion and high end positioning, but again I command this to your attention for being tokenized.

What Is Being Tokenized?

Importantly, this is not tokenized equity in the real estate itself. Investors are purchasing digital tokens representing a financial interest in revenue streams tied to the development loan.

In practical terms:

  • Investors receive income derived from interest payments on the loan.
  • Risk exposure is centered on loan performance and development execution—not long-term resort operations.
  • The offering relies on U.S. SEC private placement exemptions (Reg D and Reg S), limiting participation to accredited or eligible investors and constraining secondary trading.

The investment is managed through Securitize, a digital securities platform structured to operate within existing securities law frameworks. This illustrates a key point: blockchain infrastructure is increasingly interfacing with conventional regulatory regimes rather than attempting to circumvent them.

Why Tokenize the Development Phase?

From a capital markets perspective, tokenizing development-stage financing is significant.

1. Access to Development Returns
The highest margins in real estate are often realized during development and construction financing, historically dominated by banks, private equity, and sovereign capital. Tokenization can open a portion of that tranche to a broader, though still regulated, investor base.

2. Fractional, Programmable Participation
Digital tokens allow smaller investment sizes and automated administration. Distributions, compliance controls, and cap table management can be embedded into smart contract functionality, reducing administrative overhead.

3. Structured Liquidity Design
Marketing materials reference exit mechanisms prior to project completion. While secondary markets for private digital securities remain limited, the structure reflects demand—particularly among digitally native investors—for more defined liquidity pathways than traditional five- to seven-year real estate holds.

What Investors Actually Receive

The offering reportedly provides:

  • A fixed yield tied to loan performance.
  • Income distributions or participation linked to project milestones or a defined exit event.
  • Parameters for exit prior to resort opening.

These are debt linked returns, not fee simple ownership. Underwriting centers on credit risk, construction performance, and capital stack integrity, rather than long-term occupancy projections.

Strategic Significance

This project is the first example I am aware of tokenizing development phase real estate rather than stabilized assets. Two structural implications stand out:

  • Tokenization can extend access to global development projects previously unavailable to most investors.
  • Blockchain can function as an efficiency layer atop existing securities law, not as a parallel unregulated system.

For environmental professionals, the implications are more nuanced. If capital formation becomes more fluid and globally accessible, what standards attach to that capital? Will tokenized financing accelerate fragile coastal buildouts, or can it be paired with enforceable sustainability covenants, third-party certifications, and transparent reporting?

In the Maldives, that question is acute. Coral reefs are ecological infrastructure and economic engines. Any credible financing model in that geography must internalize environmental externalities through renewable energy integration, reef restoration commitments, climate-resilient design, and measurable performance metrics.

A Convergence Moment

We are witnessing convergence across three domains:

  • Blockchain-enabled transparency and programmable settlement.
  • Tokenization’s ability to fractionalize and mobilize capital.
  • Green building’s emphasis on resilient, performance-driven development.

Rather than tokenizing a stabilized “green” asset, this project tokenizes the financing layer of a future development. That distinction matters. The capital stack itself becomes digitized infrastructure.

Last year, in a widely read post on stablecoins accelerating green building market transformation, we examined how digital finance tools can reduce friction in environmentally positive capital stacks.

If structured responsibly, with enforceable sustainability covenants and ongoing disclosure, tokenization could align investor incentives with measurable environmental outcomes. If not, it risks becoming merely a technological wrapper around traditional externalities.

Opportunities in Tokenization

Tokenization has moved beyond white papers and fintech panels. It is emerging as a practical mechanism for expanding access to real estate capital, geographically, financially, and technologically.

The Maldives resort illustrates how this model works in practice. Instead of fractionalizing beachfront title, sponsors tokenized revenue interests in a development loan. That structural choice demonstrates flexibility: tokenization can be applied to specific tranches of a capital stack, calibrated to distinct risk return profiles. Investors gain exposure to development stage returns through a digitized, regulated instrument, while sponsors access capital beyond traditional banking channels.

For the real estate industry, this modular and programmable capital is hugely consequential. For environmental advocates, the stakes are equally significant. As access to capital broadens, the imperative is to embed climate resilience standards, biodiversity protections, and transparent performance reporting into these instruments at inception, not as afterthoughts.

The next chapter could have governments expressly enabling tokenization to advance ecological stewardship or simply accelerate development velocity within their boundaries, and much more than that ..

Real estate is indeed in the early stages of reinvention. The critical inquiry is not whether blockchain can move the abundance of capital more efficiently; it can, but how that mobilized capital will be directed. That is the question this Maldives financing structure places squarely before us.

The Right to Bee – Peru’s Recognition of Legal Rights for Stingless Bees

By Stuart Kaplow on Posted in Codes and Regulations, Environmental

The Provincial Municipality of Satipo, Peru has approved Ordinance N° 33, declaring the rights of stingless bees including legal standing to sue if threatened or harmed.

The bees within the territory of the Avireri-Vraem biosphere reserve that spans nearly 16,000 square miles (.. larger than the state of Maryland) from the Amazon rainforest to the Andes mountains, is one of the most biologically and culturally diverse landscapes on Earth.

As an environmental attorney and someone who was in this region of Peru in 2019, I view this ordinance not as a symbolic flourish, but as a jurisprudential innovation responsive to the global existential crisis of biodiversity degradation.

From “Economic Importance” to Inherent Rights

Peru took an important step in 2024 when it enacted national legislation recognizing native bees as species of economic importance and affording them protections. Until then, the law shielded only the European honeybee (Apis mellifera), a non-native species. Ordinance N° 33 builds on that foundation but goes further, recognizing stingless bees not merely as economic assets, but as rights-bearing subjects.

Stingless bees are the most ancient lineage of bees. Roughly half of the world’s 500 known species inhabit the Amazon basin, and Peru is home to at least 175 species. They pollinate more than 80% of Amazonian flora, including cacao, coffee, and avocados; crops that underpin both subsistence and export economies.

The ordinance declares that stingless bees are entitled to:

  • Exist and maintain thriving populations
  • Inhabit pollution-free environments
  • Access ecologically stable climate conditions
  • Be represented in legal proceedings if threatened or harmed

That final element, legal representation, moves beyond regulatory compliance toward enforceable ecological guardianship. In effect, the bees now have legal standing.

Biodiversity Loss Is Not Abstract

The urgency is undeniable. According to the World Wildlife Fund’s Living Planet Index, global populations of mammals, birds, amphibians, reptiles, and fish have declined by an average of 68% in less than five decades. The International Union for Conservation of Nature Red List identifies over 1,100 insect species as threatened, including more than 20 bee species.

Pollinator collapse is not a niche issue; it is a systemic risk to food security, forest regeneration, and climate resilience.

In the Peruvian Amazon, the decline of stingless bees jeopardizes not only ecosystem function but cultural survival. The Asháninka and Kukama-Kukamiria peoples have practiced meliponiculture, the traditional cultivation of stingless bees, for generations. Four key species are stewarded to ensure forest reproduction and community livelihoods. The ordinance explicitly protects both the pollinators and the ancestral knowledge intertwined with them.

Indigenous Leadership and Earth Jurisprudence

This initiative protects an estimated 22 million bees across 300,000 square meters of rainforest.

This is not performative environmentalism. The ordinance compels local authorities to:

  • Restore bee habitat
  • Regulate pesticide use
  • Support scientific research
  • Apply the precautionary principle

The precautionary principle is particularly significant in legal terms: actions potentially harmful to bees must be avoided unless proven safe. That shifts the evidentiary burden in a manner consistent with modern environmental risk management.

Importantly, this is the first time any government has recognized the rights of an insect, and the first formal recognition of bee rights anywhere in the world.

A Regional and Global Context

Peru is not acting in isolation. In 2022, Panama enacted a national Rights of Nature law recognizing the rights of ecosystems and species. In March 2023, it strengthened that framework with species specific legislation recognizing sea turtles and their habitats as subjects of rights, among the first such targeted protections globally. Panama’s model has drawn international attention as a template for biodiversity governance.

In the United States, we once blogged approvingly about Two Creeks, a Marsh and Two Lakes Sue a Florida Real Estate Developer, an early experiment in granting standing to natural features. But Peru’s ordinance is qualitatively different. It is not an isolated lawsuit; it is a democratically enacted legal framework embedded in local governance and Indigenous stewardship.

A petition urging Peru’s federal government to codify bee rights nationally has already garnered more than 386,000 signatures. Advocates in the Netherlands, Bolivia, and the United States are exploring replication.

Beyond 1970s Environmental Statutes

Most U.S. environmental statutes, such as NEPA, the Clean Water Act, and the Endangered Species Act, were enacted in the 1970s. They remain foundational but are anthropocentric and regulatory in structure. They manage harm; they do not recognize intrinsic rights.

Biodiversity degradation demands more than incremental permitting reforms. When over two  thirds of vertebrate populations have disappeared in under fifty years, and pollinators critical to 80% of flowering plants are in decline, incrementalism is malpractice.

Recognizing rights of nature, and here, the rights of bees, reframes the legal paradigm. It affirms that non human life forms possess inherent interests that the law must respect, not merely manage.

As an attorney, I understand the doctrinal challenges: standing, guardianship models, separation of powers, enforcement capacity. But the conceptual shift is indispensable. Law evolves in response to moral insight and ecological necessity.

Peru’s ordinance in Satipo is not sentimental advocacy for insects. It is a measured, culturally grounded, science informed response to a biodiversity emergency. By granting stingless bees the right “to be,” Peru has offered a legal instrument proportionate to the crisis.

And make no mistake: enabling nature to seek judicial redress is not a radical fringe theory. It is a public policy trajectory that may soon find its way into courtrooms in the United States.

The right to bee may be the right idea at precisely the right time.

Climate Change Chapter Omitted from Federal Courts Reference Manual on Scientific Evidence

By Stuart Kaplow on Posted in Climate Change, Codes and Regulations, Environmental, GHG, greenhouse gas

On February 6, 2026, the Federal Judicial Center, the research and education arm of the federal judiciary, omitted (i.e., withdrew) a chapter from the newest edition of its reference manual on scientific evidence that addressed climate change. . The manual is a guide to help judges make unbiased determinations about scientific testimony, but in this instance, it was anything but ..

The climate chapter had been criticized as a work that “undermines the judiciary’s impartiality and places a thumb on one side of the scale. It does so even as these issues are pending before the Supreme Court and other parts of the federal judiciary.”

The Back Story – The Reference Manual and Its Climate Chapter

By way of background, on December 31, 2025, the Federal Judicial Center, the research and education agency for the federal courts, published its first update in 15 years of the manual on scientific evidence. The 1,682 page guide, called the “Reference Manual on Scientific Evidence,” [ .. this is an unofficial link to the original document] included more than 90 pages describing climate change science.

The manual, little known to the public but of huge import in the judiciary (.. “it has been provided to more than 3,000 federal judges and even more state court judges”), begins with a foreword by Supreme Court Justice Elena Kagan, who writes that while judges are “generalists” who often learn about scientific issues “through the adversary process, . . . sometimes it also helps to have a dispassionate guide.” Judges will do their job better when they learn from the technical expertise of scientists, she writes, and “the law will become stronger as it further reflects sound science.”

The paragraph concludes this “sometimes occurs as a result of strategic manipulation from stakeholders who stand to be harmed if the public were to understand the true state of scientific consensus,” such as in the cases of “tobacco, ozone depletion, and climate change.”

So, is anyone who disagrees on climate akin to those who deny that cigarettes cause cancer? A footnote to the section refers readers to “Michael E. Mann, The New Climate War: The Fight to Take Back our Planet” and “Naomi Oreskes, The Scientific Consensus on Climate Change,” who each, in their own way, have been embroiled in controversy over criticism of ‘climate change deniers.’

The manual’s Reference Guide on Climate Science was credited to Jessica Wentz and Radley Horton of Columbia University. Ms. Wentz is an associate director at the Sabin Center for Climate Change Law, whose “core mission” is to “develop and promulgate legal techniques to combat the climate crisis and advance climate justice.” They are partisans, but equally disturbing are media accounts that there was a third author, undisclosed and certainly not neutral, the director of the Sabin Institute, who is of counsel to a law firm that has brought dozens of climate change lawsuits.

Controversy and Calls for Withdrawal

This attempt at what was characterized as one sided advocacy caught the attention of many, including this author. Significantly on January 14, 2026, U.S. House Judiciary Committee members Jim Jordan (R., Ohio) and Darrell Issa (R., Calif.), wrote to the Administrative Office of the Courts the “scientific” contributions to the manual “appear to have the underlying goal of predisposing federal judges in favor of plaintiffs alleging injuries from the manufacturing, marketing, use or sale of fossil fuel products,” they wrote, questioning what they termed an exercise in judicial indoctrination. They further describe, “improper attempts by the Environmental Law Institute (“ELI”) and its Climate Judiciary Project (“CJP”) to influence federal judges ..”

Article III’s Promise of an Impartial Tribunal

On February 2, 2026, twenty seven state Attorneys General, including those from West Virginia, Florida, Idaho, Montana, New Hampshire, Texas, and Wyoming, signed a letter objecting to the manual’s bias and asked that the chapter be withdrawn. The Ag’s wrote, “Article III guarantees every litigant – whether a State, an energy company, or an environmental group – the right to an independent and impartial tribunal. When the judiciary’s own research arm predetermines contested questions in active litigation, that guarantee becomes meaningless.”

On February 6, 2026, Judge Robin Rosenberg, director of the Federal Judicial Center, wrote to West Virginia Attorney General John McCuskey saying, “I write to inform you that the Federal Judicial Center omitted the climate science chapter ..” from the manual’s fourth edition. The letter did not explain. A footnote in the appendix only says that “The FJC omitted ‘Reference Guide on Climate Science’ on 2/6/2026.”

Real Word Implications and Ongoing Legal Matters

And lest one think this is simply an academic debate among attorneys or judges for that matter, to the contrary when the current Administration announced last Thursday, after EPA’s Reconsideration of the GHG Endangerment Finding, it is now moving to repeal the Obama Administration scientific findings that serve as the legal basis for federal regulation of greenhouse gases, one may be assured that repeal will be challenged in the courts (.. quite possibly in front of a judge that will have the reference manual on his desk?).

It should be lost on no one that while the climate change chapter was removed, the foreword to the manual, authored by Justice Elena Kagan, remains with its nod to the now excised chapter.

Additionally, it is troubling that the discredited chapter remains in the version found on the National Academies of Sciences’ website. 

The Role of the Judiciary and Final Thoughts

The judiciary’s role is not to cede to political currents but to ensure that when science enters the courtroom, it does so through processes that respect both its complexity and its contested nature. In reaffirming that principle, the Federal Judicial Center’s action in omitting the partisan chapter is not just defensible; it is an affirmation of judicial integrity at a time when integrity is being questioned in many of society’s institutions.

The Wall Street Journal editorial board wrote in “A Failed Climate Coup in the Courts” that “public accounting of how that [chapter] happened would be useful.” Maybe so?

Scientists should be outraged at the attempt to hijack science. Lawyers and judges should be heard to complain about this effort that would have eroded confidence in the judiciary’s neutrality. And all Americans should want an explanation of how the judiciary tried to place a thumb on one side of the scale.

The now revised final Reference Manual on Scientific Evidence, reduced to 1,662 pages, is here.

Why Land Subsidence Matters More Than Sea Level Rise

By Stuart Kaplow on Posted in Climate Change, Environmental, resilience, Sustainability

When we talk about “sea level rise,” most people immediately think of melting polar ice and warming oceans. But along much of the United States’ Atlantic coast, especially in and around the Chesapeake Bay, that narrative only tells part of the story. Emerging science shows that land subsidence, the sinking or lowering of the land surface, has been and continues to be a dominant driver of relative sea level change and coastal flood risk in many regions. It is time to appreciate that the ground sinking beneath us can matter more than the ocean rising above us.

The Chesapeake Bay Story – A Legacy of Sinking Land

In the southern Chesapeake Bay region, scientists have documented persistent land subsidence since the 1940s, with measured rates between 1.1 and 4.8 millimeters per year. These amounts may sound small, but they accumulate over decades, and when combined with rising ocean levels, they explain why this part of the Atlantic coast currently exhibits some of the highest relative sea level rise rates in the United States.

In fact, new data from the U.S. Geological Survey corroborates older studies in the region, concluding that “land subsidence causes more than half of the observed relative sea level rise,” not melting ice thousands of miles away at the poles.

Subsidence happens when the Earth’s surface lowers over time. In the Chesapeake Bay area, a mixture of factors contributes to this sinking: historical groundwater pumping, aquifer compression, and natural geological adjustments after the last ice age all play roles. But the key point is this: the land itself is slipping down, and as it does, tides and flood waters appear to rise faster than they otherwise would.

A Global Perspective – Deltas Sinking Faster Than the Seas Rise

As described in a January 14, 2026 article published Nature, Global Subsidence of River Deltas, land subsidence is a global issue, in a study that spanned 29 countries “we find that contemporary subsidence surpasses absolute (geocentric) sea level rise as the dominant driver of relative sea level rise for most deltas over the twenty-first century.”

Although the Chesapeake Bay is an estuary, not a river delta, the point remains significant for coastal planners and environmental lawyers alike: relative sea level rise is a compound phenomenon, and subsidence can dominate the geologic formation that is the coastal plain abutting the Piedmont Plateau, even when global sea levels may be rising due to climate change.

Human Activity and Subsidence – Beyond Groundwater

Historically, environmental policy has linked land subsidence in the U.S. to groundwater withdrawals and extractive activities. For example, the Houston Galveston region, a frequently cited extreme case, lost more than 9 feet of land elevation over roughly 50 years due largely to intensive groundwater pumping and petroleum extraction. The community eventually changed water management: switching to surface water supplies, limiting coastal groundwater wells, and implementing aquifer recharge strategies, measures that slowed subsidence, and flood vulnerability.

But new research makes clear we have underestimated another major human influence: stormwater management practices.

While earlier flood control efforts in the 19th century focused on conveying water through pipes and beginning in the 20th century, constructing a separate sewer system dividing sanitary waste from stormwater, modern Stormwater management emerged in the U.S. in the 1970s as a regulatory response to The Clean Water Act, focusing on how rainfall runoff is conveyed, stored, and treated to prevent flooding, erosion, and water quality degradation. Historically, stormwater infrastructure (detention basins, inlets, pipes) intercepts and reroutes rainwater that had soaked into the ground.

By altering the natural hydrology of landscapes, reducing infiltration and directing water quickly to drains and outfalls, stormwater systems can lower the time water spends in soil and diminish groundwater recharge. While stormwater policy goals such as runoff reduction, and erosion control are important, we now understand that these engineered changes also modify subsurface water balances in ways that can worsen subsidence. Moreover, the misguided expansion of traditional rain water falling on the surface management to now include “pollutant treatment” has dramatically altered surface water hydrology, having the unintended consequence of exacerbating land subsidence. This is an emerging area of research at the intersection of hydrology, land use planning, and environmental law.

Defense Interests and the Real – World Costs

Recognizing the practical implications of subsidence isn’t academic. The U.S. Navy has observed subsidence rates around its key facilities that rival or exceed sea level rise itself. In the Hampton Roads region of Norfolk, Virginia, home to the largest naval base in the world, land is sinking at an estimated 0.236 inches per year, a rate roughly double local sea level rise figures. These trends exacerbate flood risk and have driven infrastructure hardening and strategic adaptations. Similarly, places like the U.S. Naval Academy in Annapolis are experiencing measurable land subsidence that worsens tidal flooding, prompting multi million dollar coastal defense measures.

At least three recent studies conducted for the U.S. Navy at both of those facilities, while not completely released to the public, conclude “land subsidence has contributed as much or more than half of the relative sea level rise measured along portions of the Chesapeake Bay (i.e., it is not melting polar ice caps).”  

Measurement and Emerging Evidence

Subsidence isn’t just theorized, it’s measured. A suite of techniques, including extensometers, GPS, satellite radar interferometry, and long term leveling records provide precise data on how land elevations change over time. These methods have been deployed in critical coastal environments for decades, offering a rich dataset for lawyers, regulators, and planners who assess compliance with resilience planning laws, infrastructure standards, and hazard mitigation regulations.

It is now becoming clear that altering the rain with stormwater management is the largest single contributor to land subsidence.

Turning Data into Policy

For environmental lawyers, these scientific realities raise important questions about regulatory focus. Should coastal policy continue to prioritize sea level rise mitigation (e.g., greenhouse gas reductions), even though there is no rational basis for it, without parallel attention to subsidence causing practices (e.g., land use laws from stormwater management regulation to unduly burdensome offstreet parking requirements that result in unnecessarily large impervious areas)? Evidence reveals that, in many regions, subsidence is a more immediate and larger driver of relative sea level risk than climate driven ocean rise. Addressing subsidence calls for revisiting misguided stormwater practices and infrastructure design, alongside climate mitigation.

Final Thought

Land subsidence isn’t just an arcane geological term. It is a substantial, measurable, and often human driven contributor to coastal flood exposure. In the Chesapeake Bay and beyond, sinking ground that is land subsidence, is much more of a part of rising seas than carbon emissions.

And until policy and practice reflect that reality of land subsidence, from stormwater ordinances to offstreet parking regulations, people will continue to build sea walls, literally and figuratively, for a threat (sea level rise) while underestimating the more formidable one (land subsidence).

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Join us for the next in our webinar series at the Intersection of Business, Science, and Law, “Everything You Always Wanted to Know about Environmental Law (But Were Afraid to Ask)” on Tues, Feb 17 at 9 am. The webinar is complimentary, but you must register here.

A More Efficacious Way to Measure Greenhouse Gas Emissions

By Stuart Kaplow on Posted in Climate Change, Federal, GHG, greenhouse gas

As an environmental attorney who spends much of my time advising business owners, I have learned an immutable truth: markets work best when the rules are clear, fair, and grounded in reality. Environmental policy is no exception. Contrary to the prevailing narrative in popular media, the global business community has not uniformly shifted away from efforts to reduce greenhouse gas emissions, and now there is a better way to track those emissions.

Bad metrics lead to bad incentives. Good metrics unlock innovation, competition, and capital. That is why the emergence of Carbon Measures, a global coalition of major businesses committed to a more accurate emissions accounting framework, deserves close attention from the business community.

Carbon Measures is calling for a new way to track greenhouse gas emissions, one that moves beyond abstract projections and toward verifiable, product level accounting in E- ledgers. The premise is straightforward but powerful: if businesses are rewarded in the marketplace for producing lower carbon products, they will invest in the technologies and processes that make those products possible. Markets, not mandates alone, can then do much of the heavy lifting.

Why the Current System Isn’t Working

The world has not monolithically pivoted away from emissions reduction. Quite the opposite. In 2026, however, emissions tracking has become a bifurcated landscape. In the United States, the federal government has dismantled or deemphasized national GHG tracking programs, relieving many businesses of what they viewed as bureaucratic and stigmatizing compliance obligations. At the same time, mandatory carbon reporting is now a strict corporate necessity for many companies operating in the European Union, California, Maryland, and other places.

Yet across the globe, there is broad agreement on one point: the current Scope 1, 2, and 3 reporting regime is not workable, particularly when it comes to Scope 3. Scope 1 (direct emissions) and Scope 2 (purchased energy) are relatively straightforward, but modest in impact. Scope 3, covering upstream (purchased goods) and downstream (use of sold products) value chain emissions and often representing up to 90% of a company’s reported footprint, is another matter entirely.

Scope 3 reporting frequently relies on guesstimations, assumptions, and generalized emissions projections that have little, if any, connection to operational reality (nothing is actually being counted). Business leaders, legal experts, and scientists alike have come to question the utility of such data. To be blunt, asking a company to precisely account for the emissions of its customers and customers’ customers is, at best, immensely challenging and, at worst, a compliance exercise untethered from meaningful emissions reduction.

The dominant methodology, the GHG Protocol, developed by the World Resources Institute decades ago (the same year Pac-Man was released in arcades), is widely used, perhaps because the problem is hard and alternatives have been scarce. But it has also been criticized for misallocating responsibility and encouraging double counting. As Exxon CEO Darren Woods, a founding member of Carbon Measures, aptly put it: holding a supplier accountable for Scope 3 emissions is “like holding McDonald’s responsible for the weight of its customers.” The calories matter, but accountability has limits. “We don’t tell McDonald’s that they can’t sell a hamburger to somebody who has a weight problem,” said Woods.

Enter Carbon Measures: A Business Led Solution

If carbon is going to be reduced, we need a better system. Carbon Measures represents an effort by businesses to propose one. Its membership includes leading companies from diverse industries and geographies, many operating large, complex supply chains. That matters because the industrial sector accounts for a significant share of global emissions and must play a central role in decarbonization.

At its core, Carbon Measures advocates for ledger based, product level carbon accounting, rooted in the same principles that govern financial accounting, now on an artificial intelligence framework. Instead of enterprise level disclosures that blur responsibility, this “cradle to gate” approach tracks emissions where they are generated and assigns them to the products being made.

Just as financial accounting requires that an asset or liability be held by only one entity at a time, a sound carbon accounting framework ensures that each tonne of carbon is counted once, accurately, and attributed to the right place. An artificial intelligence carbon e-ledger enables companies and suppliers to calculate and transfer emissions data at each step of a product’s lifecycle.

Consider a car. The emissions associated with producing and transporting each component are transferred into the emissions value of the finished vehicle. The result is a complete, nonduplicative carbon profile for that product; no gaps, no double counting.

E-ledgers Carbon Accounting is the creation of Robert S. Kaplan, Harvard Business School and Karthik Ramanna, University of Oxford.

From Accounting to Artificial Intelligence

Carbon Measures’ work goes beyond reporting. The initiative envisions product level carbon intensity standards, such as CO₂ per ton of steel or per watt of electricity. These standards are intended to be voluntary, but they have real market force. Purchasers can compare products based on carbon intensity, rewarding lower carbon options. Governments can “put their finger on the scale” by applying stricter standards in public procurement.

Over time, as technology improves, allowable emissions per unit can decline systematically, driving real reductions while still meeting demand. This approach levels the playing field, rewards innovation, and ensures that progress is measurable.

The framework itself will be developed by an independent Technical Expert Panel, co-launched with the International Chamber of Commerce. Drawing on expertise from academia, industry, financial accounting, engineering, and civil society, the AI rooted work will focus on scientific rigor and real world feasibility.

Coexisting With Existing Reporting Regimes

Critics argue that introducing any new framework risks confusion. But in practice, multiple methodologies already exist. Maryland, for example, does not rely on the GHG Protocol for its statutory “Net Direct” GHG measure. Carbon Measures is not proposing to abolish Scope 3 reporting overnight. Scope 3 may continue to play a role in voluntary disclosure, even as companies adopt ledger based product accounting for operational and market purposes.

Ultimately, a gate to gate, ledger based system can account for emissions across the full value chain, without the indeterminacy and multiple counting that plague current approaches.

What About Cost and Affordability?

Business owners rightly ask how this will affect pricing, particularly for energy and other essentials. Affordability is critical. Many lower carbon solutions cost more today. But costs decline as technology advances and markets scale. What markets need is a way to quantify both emissions and costs accurately, so capital flows to the lowest cost transition pathways.

That is what Carbon Measures seeks to enable.

As an environmental attorney, I see this initiative as a pragmatic, market aligned evolution from the current 1980 era carbon guesstimating method to a new and improved AI rooted climate policy. Better measurement will not solve climate change by itself, but without better measurement, we will continue to misallocate effort, capital, and accountability.

We will continue to write about Carbon Measures and other innovations in environmental matters.

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Join us for the next in our webinar series at the Intersection of Business, Science, and Law, “Everything You Always Wanted to Know about Environmental Law (But Were Afraid to Ask)” on Tues, Feb 17 at 9 am. The webinar is complimentary, but you must register here.

United States Sues Morgan Hill and Petaluma over All Electric Building Laws

By Stuart Kaplow on Posted in Codes and Regulations, Energy, Federal

On January 5, 2026, the U.S. Department of Justice filed a lawsuit against the cities of Morgan Hill (Santa Clara County) and Petaluma (Sonoma County), California, challenging local ordinances that effectively ban natural gas infrastructure and gas powered appliances in new buildings. The complaint, docketed as Case 5:26-cv-00056 in the U.S. District Court for the Northern District of California, frames the dispute as a clash between local climate policy initiatives and longstanding federal energy law.

This case concerns the prevailing national consensus that the country’s long term prosperity should be advanced through ever our increasing sustainable technology and amazing economic abundance, rather than by prohibiting the use of lawful energy sources by banning fossil fuels.

That the plaintiff is the United States government should be considered as of import.

What the Lawsuit Is About

Both cities adopted their respective all electric building rules, Morgan Hill in 2019 and Petaluma in 2021, as part of broader efforts to reduce greenhouse gas emissions and transition building energy systems away from fossil fuels. These ordinances limit or prohibit the installation of natural gas piping and appliances like gas stoves, furnaces, and water heaters in most new construction.

The DOJ’s complaint asserts that these local bans violate the Energy Policy and Conservation Act of 1975, a federal statute that empowers the U.S. government to establish national energy conservation and efficiency standards for covered products and expressly preempts state and local regulations “concerning the energy use” of those products. EPCA’s preemption provision was interpreted by the Ninth Circuit in California Restaurant Association v. City of Berkeley, 89 F.4th 1094 (9th Cir. 2024), to apply to local restrictions that ban or effectively eliminate the use of natural gas for covered appliances by prohibiting the necessary infrastructure. We have blogged about that case and the Broad Failure in Attempts to Ban Natural Gas.

According to the DOJ complaint, the Morgan Hill and Petaluma ordinances fall squarely within this preemptive scope because they “concern the .. energy use” of covered products by preventing natural gas from serving as an energy source, a result the Ninth Circuit found preempted when Berkeley’s ordinance was challenged.

The complaint also alleges that the bans impose what it describes as “crushing costs” on residents and businesses, framing the local rules as detrimental to consumer choice and inconsistent with a unified federal approach to energy regulation, not to mention flying in the face of increasing electricity demand that will only be made more dire with mandates for more electricity usage.

DOJ’s Legal and Policy Argument

The Department of Justice contends that Morgan Hill’s and Petaluma’s prohibitions create a patchwork of inconsistent regulation in an area where federal law mandates uniform national standards for energy related products. Under the EPCA’s express preemption clause, once a federal standard covering an energy using product becomes effective, no state or local regulation “concerning the energy use” of that product may remain effective unless it falls within specified exceptions, none of which the DOJ argues applies here.

The DOJ’s legal strategy in this case explicitly draws on the Berkeley precedent, where the Ninth Circuit held that EPCA preempts a local ban on natural gas piping to new buildings because the ordinance, regardless of form, regulated the energy use of natural gas appliances.

Beyond legal doctrine, the lawsuit reflects the federal energy policy emphasis articulated by the current Attorney General, Pamela Bondi, who in press statements, characterized the bans as unlawful and harmful to the nation and to consumers. DOJ officials have tied the action to broader federal objectives articulated in two Executive Orders Unleashing American Energy (EO 14154) and Protecting American Energy from State Overreach (EO 14260), which prioritize American energy dominance and seek to challenge state and local actions deemed to undermine that priority.

DOJ’s complaint seeks a judgment declaring the ordinances preempted, invalidating them, and securing permanent relief preventing their enforcement.

Context and Background

Both Morgan Hill and Petaluma adopted their all electric codes in a bygone era when many local governments in California were exploring aggressive policies to reduce building emissions (.. how a Presidential election changes national energy policy). These ordinances were joined by similar actions in cities such as Berkeley, which became the first jurisdiction to enact a strict natural gas ban, later struck down by the Ninth Circuit and repealed.)

Following the Berkeley decision, numerous governments across the country, including Los Angeles and other California cities, recognizing the legal challenge posed by EPCA, have repealed or suspended similar ordinances.

Morgan Hill and Petaluma reportedly have not actively enforced their bans since the Berkeley ruling, and the DOJ’s lawsuit signals a proactive federal approach to asserting EPCA preemption and deterring future local ordinances of similar character.

Today the emphasis nationwide is reliability of the electric power grid and the generation of enough electricity to meet growing needs (.. nearly the opposite emphasis of these climate concerned laws).

Potential Impact

For business leaders and policymakers outside California, particularly in jurisdictions like Maryland, the implications of this litigation are significant. Governments nationwide,  including Maryland and Montgomery County, Maryland, have adopted laws aimed at phasing out fossil fuels in favor of all electric buildings. Unlike the ordinances at issue here that impact new construction, the Maryland laws extend to retrofitting existing buildings, a much broader regulatory scope that arguably raises even more complex preemption issues and has prompted litigation asserting similar conflicts with federal law.

If the federal court in Northern California follows the Ninth Circuit’s reasoning and grants the DOJ’s requested relief, the decision could deter other governments from adopting or enforcing bans on natural gas infrastructure and appliances. Legal analysts and environmental attorneys widely expect that the federal government’s position, supported by Berkeley precedent, will prevail, reinforcing the principle that energy conservation and energy use standards for covered products are matters of national, not local, regulatory authority.

This case may thus become a legal bellwether for future disputes over the balance between local climate objectives and federal statutory preemption.

It will also be a predictor of the national will for maximizing a great future for civilization through sustainable technology and amazing abundance addressing the reality of electricity demand of data centers and affordability of electricity, not being anti innovation and banning fossil fuels.

Business executives with interests in construction, real estate development, utility infrastructure, and energy policy should closely monitor developments, as similar legal frameworks are being considered nationwide, including, by way of example, the Department of Justice intervening in the cases challenging the Maryland all electric building laws. Watch future posts on this blog for updates as the litigation unfolds.

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Join us for the next in our webinar series at the Intersection of Business, Science, and Law, “Everything You Always Wanted to Know about Environmental Law (But Were Afraid to Ask)” on Tues, Feb 17 at 9 am. The webinar is complimentary, but you must register here.

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