Court Dismisses Baltimore’s Climate Claims: Implications for Future Litigation

In an unprecedented decision, a state court has dismissed a lawsuit “for failure to state a claim upon which relief can be granted” by the Mayor and City Council of Baltimore against 25 major fossil fuel companies, which alleged the companies are responsible for a significant portion of global greenhouse gas emissions. Baltimore claims that the defendants misled the public about the risks of fossil fuels, contributing to climate change and its adverse effects on the city.

In July 2018, Baltimore filed suit alleging that the 25 companies “are individually and collectively responsible for a substantial portion of the total greenhouse gases emitted in the world.”

Baltimore alleged “that the Defendants must be held accountable for deceiving consumers by disseminating misleading information that undermined the scientific community’s consensus about climate change which led to the overuse of fossil fuels around the world.”

Following a tortured procedural history including the United States Supreme Court vacating and remanding the case for further consideration after it had been removed to the federal courts, with the case now back in state court, on October 16, 2023, the oil and gas companies filed a ‘preliminary’ Defendants’ Motion to Dismiss Plaintiffs Complaint for Failure to State a Claim Upon Which Relief Can Be Granted.

In ruling on that motion, the court begins, “There is no question that global warming and climate change are wreaking havoc on our environment.”

The Court goes on to explain that “several states and municipalities have filed lawsuits against fossil fuel companies seeking abatement and/or compensation under the (novel) theory that these companies’ extraction, production, promotion, marketing, and sale of fossil fuels has contributed to the increase in fossil fuel use and contributed to global climate change resulting in injury to plaintiffs’ infrastructures. In each case, the question has been whether these cases can and should be tried and resolved in state court or whether the federal court and/or Congress should resolve the matters. Commentators and scholars have noted that these cases have come to State court because of the difficult policy challenges and the federal government’s reluctance to address climate change.”

In this matter, the Court aligned itself with the reasoning articulated in the recent federal New York City v. Chevron, et al, case, “interpreted the complaint under its consideration as a suit over global greenhouse emissions and held that the allegations of deceptive promotion and marketing of Defendants’ products is simply artful pleading. Artful pleading cannot transform the City’s complaint into anything other than a suit over global greenhouse emissions.”

Judge Videtta A. Brown wrote here, “The explanation by Baltimore that it only seeks to address and hold Defendants accountable for a deceptive misinformation campaign is simply a way to get in the back door what they cannot get in the front door.”

Significantly, the Court ruled on the merits of the City’s case which included 8 causes of action. In response to claims of public and private nuisance “by affirmatively and knowingly promoting the sale and use of fossil fuel” the Court found that greenhouse gas emissions were not a nuisance ‘on the land’ under Maryland law for which the defendants could be liable.

Baltimore also alleged that the defendants “owed a duty to Baltimore and its residents to warn Baltimore and residents of the dangers of using Defendants’ fossil fuels” both for strict liability failure to warn and negligent failure to warn, but the Court rejected out of hand the foreseeable risk concept and then takes a shot when Judge Brown observes, “In this case, the duty to warn would be extended to every single human being on the planet.”

Additionally, the City averred there is a design defect in gasoline and the like, for which it pursued claims in strict liability and negligence, “but because Baltimore has failed to allege any defect inherent in the design of Defendants’ products” those claims were rejected by the Court. And then “this Court will not make the leap and extend trespass liability” as alleged when “Defendants substantially contributed to invasions of City property by misleadingly and deceptively marketing their fossil fuel products, knowing that emissions from those products would cause the very climate-related invasions alleged ..” Moreover, the alleged violations of the Maryland Consumer Protection Act fail because the City missed the 3 year statute of limitations and it certainly knew of climate change more than 3 years ago.

In a 34 page memorandum explaining that analysis, the Court granted the defendants’ Motion to Dismiss Plaintiff’s Complaint for Failure to State a Claim Upon Which Relief Can Be Granted.

Cases like this brought in state courts are pioneering at best and novel at worst because as we blogged about some weeks ago, the Ninth Circuit Court of Appeals recently held climate change claims were “not justiciable” in federal courts. But a city should not be regulating greenhouse gas emissions for the entire country (or for that matter, the world) through litigation brought in a state court.

This case is pathbreaking because it is the first time a state court has dismissed one of these several similar suits brought by states and local governments across the country. The U.S. Supreme Court is currently considering whether to grant a petition to hear an appeal from a substantially the same lawsuit from the City of Honolulu.

This decision is a very good read.

The Government is Coming For Your Gas Stove But Voters May Save You

With 431,063 signatures submitted on July 2, 2024, to the Washington Secretary of State’s office, it is all but certain that a voter initiative will be on the November ballot to prevent the state from banning natural gas in homes and businesses.

Initiative 2066 would expressly protect natural gas use and repeal provisions of HB 1589, now chapter 351, Laws of 2024, widely referred to as “the decarbonization bill” that aims to transition away from natural gas.

In 1912, Washington became one of the first states to adopt the initiative and referendum process, securing the rights of citizens to make and remake their laws directly, and to provide a check over the decisions of their legislature.  

This Initiative explains on its face, “due to recent policy and corporate decisions, the people’s ability to make choices about their energy sources is at risk. Therefore, the people determine that access to gas and gas appliances must be preserved for Washington homes and businesses, by strengthening utilities’ obligation to provide natural gas to customers who want it, and by preventing regulatory actions that will limit access to gas.

Apocalyptic environmentalists supported by policy making public officials from Governor Jay Inslee on down describe a moral imperative that unless humankind drastically reduces consumption, our growing numbers and appetite will overwhelm the planet. And somehow the solution is mandating all electric buildings (.. whether there is enough electricity capacity and irrespective of the source of the electric power, coal or other fossil fuel power plants, be damned).

But rational thinking citizens across this country are not giving up their gas stoves to some wrongheaded public policy. At least 24 states have passed laws preventing natural gas bans in buildings while new voter referendums are simmering in response to government acts in other states from Maryland to Colorado. 

The language in the opening statement of this Initiative is emblematic of views held by the majority of Americans, “the people find that having access to natural gas enhances the safety, welfare, and standard of living of all people in Washington. The people further find that preserving Washington’s gas infrastructure and systems will promote energy choice, security, independence, and resilience throughout the state.

Noting the cratering public opinion over how much of a priority global warming is, this measure will be before the voters at the same time and immediately followed on the ballot by Initiative 2117 which would prohibit state agencies from imposing any type of carbon tax credit trading, and repeal legislation establishing a cap and invest program to reduce greenhouse gas emissions.

There is little doubt that Washington voters will dispense with their government’s attempts to ban natural gas. A poll released in May by DHM Research, an independent public opinion research firm, shows that 72% of voters oppose banning natural gas for new homes and buildings. And that is consistent with an Echelon Insights poll in March that found that more than 75% of likely voters say homeowners “should have a choice to continue receiving natural gas.” And 77% of state voters said they’d support a ballot measure to let homeowners and restaurants continue using gas for heating and cooking (note, that includes two-thirds of Democrats).

Washinton state citizens are going to vote in the November elections to repeal government’s efforts to mandate decarbonization (.. yes, a Blue state), and that is not because humans are around 18% carbon by mass, but because all electric building laws are wrongheaded environmental public policy, in Washinton and across the country.

In Ohio v EPA Supreme Court Reins in EPA: A Win for Environmental Protection

The Supreme Court decision in Ohio et al. v. Environmental Protection Agency et al. is a significant victory for environmental protection while reigning in the power of federal agencies.

Among the blockbuster decisions issued in this term, the Court granted this application for a stay, halting the enforcement of the Environmental Protection Agency’s rule on the Federal Implementation Plan for controlling ground level ozone, the main ingredient in smog. (Okay, the details of what EPA is proposing may be a little inside baseball, but the minutiae and inner workings of what happened here are as fascinating as they are significant, so read on ..

Justice Neil Gorsuch, whose mother Anne McGill Gorsuch was appointed head of the EPA in February 1981 by President Reagan, authored this 5 – 4 majority opinion. Justice Barrett filed a dissenting opinion, in which Justices Sotomayor, Kagan, and Jackson joined.

In what should be read as a full throated expression of the proper role of the courts in the separation of powers, the Court found that the EPA’s final rule on the FIP was arbitrary and capricious, as it failed to provide a reasonable explanation for its action and did not adequately address concerns raised during the public comment period. By granting the stay, the Court has ensured that the EPA’s flawed rule will not be enforced and do harm while the appeal itself unfolds. Most legal scholars believe a stay should be the practice when other agency derived regulations are challenged in the judicial branch.

This decision is crucial for protecting the environment and public health, allowing what the EPA characterizes as the 23 “upwind” states that are proposed to reduce emissions that affect the air quality in “downwind” states to challenge the EPA’s rule that was updated in 2015 and quickly followed by the Agency’s “good neighbor” plan and seek a more comprehensive and effective approach to controlling ozone pollution. The Court’s ruling highlights the importance of collaboration between states and the federal government in regulating air quality, recognizing that smog knows no state boundaries, and reaffirms the primary responsibility of states (and not a federal agency) in developing compliance plans under the Clean Air Act.

It also emphasizes the need for the EPA to provide a reasoned response to concerns raised during the public comment period, ensuring transparency and accountability in the rulemaking process, and making clear courts need not defer to that bad behavior.

The crux of the broader disputes and differences were articulated by West Virginia Attorney General Patrick Morrisey, when he said the decision “is correct but the EPA will keep trying to legislate and bypass Congress’s authority, .. it has been settled by the Supreme Court, the EPA must regulate within the express boundaries of the statute that Congress passed.”

At a time when the Biden administration is using regulatory tools to advance its agenda in the face of Congressional gridlock, by a 6-3 conservative majority, the Supreme Court has been skeptical of federal regulatory power. Two days after this decision, in what is likely the most significant decision of the term, the high court overturned the 1984 decision in Chevron v. Natural Resources Defense Council, which had held that courts should defer to an agency’s reasonable interpretation of an ambiguous statute.

The Supreme Court had recently pushed back on a regulator expansion of what are waters of the U.S. limiting EPA’s effort to regulate certain wetlands under the 1972 law. And earlier, the high court limited EPA’s power to set rules for greenhouse gas emissions from power plants

On an interesting procedural note, this ruling came in one of the relatively rare cases to reach the Supreme Court through a “shadow” docket of emergency appeals. Originally filed in the U.S. Court of Appeals for the District of Columbia Circuit, the three states sought to halt implementation of the FIP, but a divided three judge panel denied the requests. The states sought emergency relief from the Supreme Court in October, and the justices heard arguments in February.

Catherine Stetson, an attorney in the case below, representing companies that own natural gas pipelines, explained the need for the emergency action by the Supreme Court before evidence was taken because if the rule was allowed to remain in effect, it could mean “hundreds of millions if not billions of dollars in costs over the next 12 to 18 months.”

By halting the enforcement of the EPA’s rule, the Court has prevented potential harm to the environment and public health, while recognizing the significant impact of ground level ozone on air quality, human health, and vegetation. Together with other recent Supreme Court cases, this provides a path for good stewardship of the environment without overreaching government.  

This Supreme Court decision, which may not have received as much media attention as other decisions this year, is when read together with those other cases, a hugely important step towards preserving the natural environment and safeguarding public health, setting a precedent for upholding the stalwart federal statutory Clean Air Act while ensuring the proper role of states within our Constitutional framework, and a healthy and clean future for all.

Maryland Governor Executive Order Mandates Climate Action

Earlier this month, Maryland Governor Wes Moore signed an Executive Order leapfrogging Maryland to the front of all state climate efforts. No other government has enacted such a sweeping statewide green transition.

The Maryland Governor’s June 4th, 2024, Executive Order 01.01.2024.19 is summarized below:

Stated Purpose:

To lead and coordinate state efforts to implement Maryland’s Climate Pollution Reduction Plan, addressing the existential threat of climate change and promoting sustainability and environmental justice.

Background:

  • Climate change threatens Maryland’s economy, resources, and public health, especially affecting marginalized communities.
  • Maryland aims to reduce greenhouse gas emissions by 60% by 2031 and achieve net-zero emissions by 2045, with a goal of 100% clean energy by 2035.
  • The Climate Pollution Reduction Plan projects significant public health benefits, income increases, and job growth.

Definitions:

  • Climate Implementation Plan (CIP): A document outlining steps for state agencies to implement climate goals.
  • Justice40 Initiative: A federal effort to deliver at least 40% of benefits from certain investments to disadvantaged communities.
  • Zero-Emission Vehicle Infrastructure Plan: A strategy to deploy electric vehicle infrastructure in Maryland.

Whole of Government Approach:

  • State agencies must address climate change, advance environmental justice, equitably implement laws and policies, and maximize federal funding.
  • By November 1, 2024, each agency must submit a CIP detailing steps, funding, expected outcomes, and efforts to advance environmental justice.

Immediate Actions:

  • State agencies must implement near term measures from the Climate Pollution Reduction Plan including decarbonizing the economy (i.e., all electric buildings [not limited to buildings 35,0000 sq ft and larger currently proposed to be decarbonized]).
  • The Maryland Department of the Environment will propose a zero emission heating equipment standard regulation that will phase in zero emissions standards for heating equipment to reduce carbon pollution and “improve air quality inside homes and the ambient air,” pivoting from a justification of addressing global warming to indoor health and having the effect of banning not only natural gas, propane, and also heating oil in public and private buildings, large and small (but, maybe not including for cooking?).
  • The MDE will propose a clean heat standard regulation to expand Maryland’s Renewable Portfolio Standard to the thermal energy system, mobilizing investment in clean heat solutions for homes and businesses.
  • The Maryland Department of Transportation will enhance the Zero Emission Vehicle Infrastructure Plan, evaluate transportation project emissions, and set reduction targets for greenhouse gas emissions, and reduce vehicle miles traveled for the transportation sector (not just state government).
  • The Maryland Energy Administration will develop a framework for achieving 100% clean electricity by 2035 “and determine if all or part of the proposed clean energy standard can be implemented through existing authority.”

Governor’s Subcabinet on Climate:

  • Established to coordinate state efforts and reduce greenhouse gas emissions.
  • Consists of various state officials and led by the Secretary of the Maryland Department of the Environment.
  • Will submit annual progress reports on implementing the Climate Pollution Reduction Plan and state agency CIPs, including updates on federal funding opportunities.

General Provisions:

  • The order will be implemented consistently with existing laws and regulations.
  • Provisions of the order are severable to ensure the order remains effective even if parts are invalidated.

Effective Date:

This executive order is effective immediately, as of June 4th, 2024.

What is Not Included:

  • The executive order is devoid of funding sources, not only for public buildings but also for businesses and residences.
  • The order makes no effort to address housing energy affordability or reliability.
  • The order does not propose where the new electricity will come from when today Maryland consumes about 40% more electricity than it generates.

Conclusion

The executive order mandates comprehensive economy wide actions in both the public and private sectors, to place Maryland ahead of all other states in mitigating climate change.

Only the General Assembly can make laws and it is the role of the executive branch to execute those laws made by the legislature. Attempting to govern in the absence of legislative action, by executive order or otherwise is violative of the American precept of separation of powers. This executive order establishes a structure and deadlines for executive branch agencies’ coordinated and effective implementation of the Maryland Governor’s ambitious climate goals. Given that the Maryland General Assembly pushed back only months ago on similar greenhouse gas regulations and courts across the country have found energy policy regulation of this type preempted by federal law, it is unclear how those other two branches of government will respond to this executive order.

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Please join us for our webinar “Offsets and RECs are in Your Future for Reducing Greenhouse Gases” on Tuesday, June 25 from 9 – 9:30 am EDT presented by Stuart Kaplow. The webinar is complimentary, but you must register here.

Legal Action Seeks Mandatory Pollution Warnings for Gas Stoves

A novel lawsuit is seeking to have a court order manufacturers to warn consumers that normal operation of its gas stoves produces air pollution at levels that can be harmful to human health. 

Last week the U.S. PIRG Education Fund filed a lawsuit in the District of Columbia Superior Court against Haier US Appliance Solutions, maker of GE Appliances, alleging that the company is violating the District’s Consumer Protection Procedures Act by failing to warn consumers that normal operation of its gas stoves produces air pollution at levels that can be harmful to human health. 

Among the relief requested is that the court, “Issue an injunction requiring any other appropriate health warnings and disclosure of information related to the nitrogen oxides, including nitric oxide and nitrogen dioxides, produced while using GE Appliances gas stoves.”

Nearly 40% of U.S. households have gas stoves.

Many will recall the controversy last year when Rich Trumka, Jr., one of five commissioners on the Consumer Product Safety Commission walked back comments about an “outright ban on gas stoves was on the table” but weeks later the Commission did inexplicably open a Request For Information into the hazards of gas stove pollution. But the Commission has taken no additional action to date.

Just last month the California State Assembly approved Assembly Bill 2513 that would require all gas stoves sold in California to have a warning label detailing the health risks of the pollutants emitted by gas stoves. That bill now heads to the state Senate.

In another avenue of attack on natural gas, last week, the Maryland governor issued an Executive Order seeking to ban gas appliances by requiring the state government, “propose a zero emission heating equipment standard regulation that will phase in zero emissions standards for heating equipment to reduce carbon pollution and improve air quality inside homes [and businesses] and the ambient air.” That is, Maryland’s earlier regulatory attempt at banning gas appliances in the name of greenhouse gas emission reduction ran afoul of preemption by the federal Energy Policy and Conservation Act, so apparently this time the State is justifying the ban under the basis that anything other than a new electric stove is harmful to human health?

The complaint in this DC case avers that to justify its claim the U.S. PIRG Education Fund tested two GE Appliance stoves and found NO2 pollution levels exceeded the numerical values the U.S. Environmental Protection Agency set as health protective standards for outdoor air. The case can be summed up with this allegation from the complaint,

“U.S. PIRG Education Fund conducted the tests on new stoves purchased in 2024. .. Upon information and belief, based on U.S. PIRG Education Fund’s gas stove testing, the science behind natural gas combustion, and the findings of studies, government agencies, and public health and medical organizations, other GE Appliances’ gas cooktops, ovens and ranges produce NOx, NO and NO2. Operating an electric stove does not produce NOx, NO or NO2.”

Some have suggested that the plaintiff itself did the testing itself because despite all the hue and cry in the popular media, the body of scientific research spanning decades indicates that cooking with natural gas is safe and not a significant determinant of residential indoor air quality or associated health effects. There are numerous reports and studies referenced in the complaint and the court will be left to determine the veracity and relevance of each.

A recent scientific literature search prepared in anticipation of litigation challenging Berkley California’s now determined to be an unconstitutional attempt to ban gas appliances, cited, a review from Abdullah et al. (2013) finding that “it is expected that the use of electricity and gas also contribute to cooking emissions. However, although such emissions will be included in the concentrations reported in the literature, the main contribution to those concentrations is expected to be from compounds deriving from the cooking of the ingredients itself.” In other words, when it comes to the indoor air quality of cooking with electricity or natural gas, the health driver is what you are cooking and the single largest contributor is the cooking oil in the pan, not the fuel you use to heat it.

Despite the science, but having been told by the courts that regulation of energy use is preempted by the federal government, health claims are now becoming the justification for bans on natural gas appliances by states and local governments across the country; of course, all under the guise of regulating climate change.

There is little chance the plaintiff will prevail in this case, but the media attention on this cause will have served its purpose.

I am not a chef (.. okay, I have never cooked a meal in my kitchen) but having reviewed a lot of the literature in this space absent some new government intervention with warning labels on cooking oil, a government action that would be rationally related to a legitimate government interest would be proper increased ventilation in buildings.

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Please join us for our webinar “Offsets and RECs are in Your Future for Reducing Greenhouse Gases” on Tuesday, June 25 from 9 – 9:30 am EDT presented by Stuart Kaplow. The webinar is complimentary, but you must register here.

Maryland’s Offshore Wind Ambitions Set to Soar with New Agreement

Last week the State of Maryland and the U.S. Bureau of Ocean Energy Development agreed to advance Maryland’s offshore wind development in the Atlantic Ocean as part of the ‘all of government’ approach to addressing climate change.  

On the same day as that announcement, U.N. Secretary Antonio Guterres said in a speech at the American Museum of Natural History in New York, “Like the meteor that wiped out the dinosaurs, we’re having an outsized impact. In the case of climate, we are not the dinosaurs. We are the meteor. We are not only in danger. We are the danger. But we are also the solution.”

Maryland, by legislation just signed by the Governor days ago, has the aggressive target of “achieving a total of 8.5 gigawatts of offshore wind energy capacity by 2031.” That aim would be part of the state’s mandate to produce 100% clean energy by 2035 but will not happen without large public policy efforts like this. Concomitantly, the Federal government has the ambitious renewable energy goal of deploying 30 gigawatts of offshore wind energy across the country.

Last Wednesday, 2024, BOED announced the availability of its final environmental assessment  for possible impacts from issuing leases for potential offshore wind development off the Delaware, Maryland, and Virginia coasts, concluding “that there would be no significant impacts from lease issuance.”

The next day Maryland and the BOED signed a memorandum of understanding to support the coordinated development of wind energy generation offshore Maryland. Today, despite more than a decade of state public policy encouraging the erection of the massive structures in the ocean waters off of Maryland, there are none.

Offshore wind deployment has seen market challenges. With more and additional government intervention as described in that MOU the sector will adapt to recent cost pressures and will see lower risk and costs as deployment scales over time.

The nascent U.S. offshore wind market is arguably at an inflection point. Government leading the way, with regulatory assistance and public dollars has been and will remain fundamental.

Some suggest the sector is poised for liftoff and that government subsidies will lay the foundation for consistent long term deployment, decarbonization, and economic benefits across the country.

While costs increased over the past few years, driven by rapid inflation of equipment costs, rising interest rates, supply chain constraints, and schedule delays, global cost headwinds have begun to stabilize and new offtake solicitations de-risk development going forward. Government subsidies can be what the sector (.. or for that matter what any sector) needs.

Offshore wind power has a compelling and distinctive value proposition that complements other clean resources, with high capacity factors and strong winter production that support grid reliability and resource diversity. Offshore wind can be a central pillar of decarbonizing coastal population centers, and offtake costs reflect not only the cost to generate clean power but also the cost to deliver power to coastal load centers (transmission) and the opportunity to revitalize maritime infrastructure and domestic manufacturing.

Maryland is not new to harnessing the wind above the waves. The state legislature passed the Offshore Wind Energy Act of 2013, which established a $190/MWH levelized price cap and net ratepayer impact caps of $1.50/month for residential customers (which ratepayers are still paying today despite that there are no offshore wind turbines).

Maryland has the highest median household income in the country, making it the richest state in America, so it can afford to spend money on offshore wind subsidizing the generous federal incentives, making its ocean water among the most inviting target rich environments for renewable energy production investment. And while the impact of the FERC’s new transmission and cost allocation rule, Order No. 1920, is just coming into focus, funding of transmission from Atlantic Ocean will be shared among Marylanders when now “customers pay only for projects from which they benefit” which will make all of this more expensive for Maryland ratepayers.

The new MOU is not a legally binding agreement but will signal to the marketplace that Maryland is the place for offshore wind projects, benefitting not only the clean energy developers but also the labor and supply chain. With the two previously proposed Maryland projects stalled the approval of the two new Maryland coast leasing areas in the recent environmental assessment is huge.

It should be lost on no one that today Maryland consumes about 40% more electricity than it produces. As I recently blogged, Maryland needs to produce more electricity

This is part of the solution, assuming someone actually captures offshore Maryland wind energy at scale.

The next step will be when BOED holds a sale for the proposed offshore wind projects off the Maryland coast later this year. 

White House Unveils Commitment to Carbon Offsets

Last Tuesday the White House unveiled a commitment to the role of carbon offsets in reducing greenhouse gas emissions.

Not to bury the lede, but the Biden Administration loudly endorsed the opportunities of voluntary carbon offsets in addressing climate change. Carbon offsets are widely criticized not only by apocalyptic environmentalists but also the subject of deep divisions between environmental groups in the U.S.

In releasing New Principles for High Integrity Voluntary Carbon Markets the Administration is elevating ideas that already exist to buttress a carbon offset marketplace that today has no uniform standards and faltered last year, seeing the value of the marketplace as well as the price of each offset credit fall by more than 50%.

The Backstory

Each carbon credit represents the reduction or removal of one tonne of CO2 emission removal or reduction.

We have blogged about the history of offsets and more at Offsets and RECs: A Powerful Duo for Reducing Greenhouse Gas Emissions and Repairing the Planet

Many organizations face significant challenges in their quest to achieve net zero carbon emissions. The most prominent among these is the difficulty in generating sufficient onsite renewable energy. This is particularly true for the over 90% of U.S. businesses operating in leased spaces within buildings they do not own. For these organizations, achieving net zero on site is not just impractical; it is often impossible. Critics who insist that onsite net zero be achieved for every organization are either pie-in-the-sky idealists or lack any understanding of the practical limitations most businesses face. An oft cited example is that a hospital cannot be net zero carbon emissions without the use of offsets or the like.

The Role of Voluntary Carbon Offsets

Voluntary carbon offsets offer a viable and effective solution for many organizations. By investing in carbon offset projects, businesses can counterbalance their emissions by supporting renewable energy projects and verified emission reduction initiatives. These offsets enable organizations to contribute to global emission reduction efforts even when direct action is not feasible within their own operational four walls.

Accessible and Scalable Solutions

Voluntary carbon offsets are accessible and scalable. They provide a flexible means for organizations to participate in climate action regardless of their specific circumstances. Whether a business is located in an urban high rise or a rural community, carbon offsets offer a pathway to contribute positively to the planetary environment. These offsets support a variety of projects, from reforestation and renewable energy to methane capture and energy efficiency improvements, making it possible for businesses of all sizes and sectors to find suitable opportunities for investment.

Credibility and Impact

Environmental zealots have used as a stalking horse the credibility of carbon offsets, but with few fraudsters or failed projects actually reported these mechanisms can ensure genuine emission reductions. Moreover, while not necessary in all instances the efficacy of individual projects can be the subject of an opinion of legal counsel that the projects funded by carbon offsets deliver real, measurable, and permanent emission reductions or similarly a verification by an accounting firm. There are also the Verified Carbon Standard, Gold Standard, and Climate Action Reserve as examples of certification bodies that provide oversight and validation.

Market Driven Climate Action

Voluntary carbon markets represent a powerful, market driven approach to combating climate change. By leveraging market mechanisms, these offsets attract private sector investment into climate action, driving innovation and scaling up efforts to reduce emissions. This market approach not only enhances the financial viability of climate projects but broadens the participation base, engaging a wide array of stakeholders.

Support from the Biden Administration

The Biden Administration is striving to make its climate goals achievable, including cutting greenhouse gas emissions in half by 2030 and achieving net zero emissions by 2050. Recognizing the importance of voluntary carbon markets in this endeavor, the Administration just released a Joint Statement of Policy and new Principles for Responsible Participation in Voluntary Carbon Markets (VCMs).

Ensuring Responsible Carbon Offset Markets

The newly released principles aim to ensure that voluntary carbon markets drive credible climate action while generating economic opportunities. The guidelines emphasize transparency, integrity, and accountability, ensuring that investments in carbon offsets lead to genuine environmental benefits. This policy framework sets clear incentives and guardrails, fostering a robust market that supports ambitious climate action.

Importantly, this new federal government policy is expected to result in course corrections for existing bad state public policies, like Maryland regulations mandating buildings be net zero by 2040 without the use of offsets or RECS or, .. which Maryland regulations (currently put on hold by the legislature) are not credible state action and not factually possible. The federal commitment to advancing the use of carbon offsets is anticipated to drive ambitious market based solutions to greenhouse gas emissions that create economic opportunity across the country, in lieu of carbon policies like Maryland’s that would result in market stasis.

Conclusion

Voluntary carbon offsets are indispensable tools for organizations striving to achieve net zero emissions, particularly those unable to generate enough onsite renewable energy.

By providing accessible, scalable, and credible means to support global emission reduction efforts, carbon offsets enable businesses to make a significant positive impact toward repairing the planet. As the Biden Administration advances policies to bolster these markets, the path to net zero becomes attainable for the broad breadth of businesses across America.

Through participation in voluntary carbon markets, organizations can drive meaningful climate action and create economic opportunities, all while moving closer to a sustainable future.

Maryland Needs to Produce More Electricity

Maryland consumes about 40% more electricity than it generates.

The extra supply of more than 200 Trillion Btu of electricity, annually, is delivered to the state over the PJM regional grid. And the amount imported is growing dramatically. 

While the percentage of imported electricity varies from day to day (depending upon weather conditions, costs of fuel sources, energy public policy, etc.), this is not a new situation, dating back approximately 40 years, and will increase in coming years.

That in 2022 the two reactor 1970s era Calvert Cliffs nuclear power plant located on the western shore of the Chesapeake Bay accounted for about 39% of the state’s total in state electricity generation, is what saves the State’s broken publicly mandated utility system. Natural gas generation (.. which has more than tripled since 2015, as nearly 2,600 megawatts of new natural gas generating capacity came online) accounted for about 36% of in state electricity generation.

Coal fired generating plants had historically supplied more than half the state’s generation, but coal’s share has been below 50% since 2012 and was at about 12% in 2022.

However, of the 40% of electricity imported into Maryland for use in the state, in 2022 more than 22% was coal generated (which is a generic U.S. Energy Information Administration statistic, but PJM actual operational data shows that in that year more than 36% was coal generated). Also significant, PJM’s real time market (of locational marginal prices calculated on 5 minute intervals based on actual grip operations) shows that at its peak Maryland’s imported electricity is more than 70% coal generated.

Not surprisingly, the use of electricity is not static.

But neither is in state generation, including Maryland’s three remaining coal power plants (with a combined generating capacity of nearly 1,800 megawatts), the two largest power plants intend to shut down by 2025 and the smallest plant has given notice it will shut down later this year. Solar energy, wind, and biomass are increasing but will not at any reasonable time replace that capacity or energy density; so, the state will import more electricity. The largest renewable electricity source available on the grid (.. not including hydroelectric dams) is landfill gas, which is an inelastic supply. Since 2022 there is arguably more solar power generated, but nearly two thirds of Maryland’s solar generation came from small scale, customer sited solar, such as residential rooftop solar panels (.. and not contributing in any meaningful way to the grid).

While it is popular to talk about the fact that Maryland had about 102,530 registered electric vehicles and about 1,667 electric charging stations, with both of those numbers increasing the amount of electricity used (i.e., replacing petroleum), such only exacerbates the already existing total energy imbalance.

That is Maryland consumes about five times more energy than it produces (.. including but not limited to electricity). Around 90% of Maryland’s petroleum is consumed by the transportation sector, which accounts for 33% of the state’s total energy consumption, followed closely by the residential sector at 31% and the commercial sector at 29%. But the state public policy to increase electric vehicle use and electrify buildings (that are today using natural gas) will of course increase electricity use and that electricity will be imported with a significant portion of it generated from coal.   

However, the real and dramatic increase in electricity use is elsewhere. Where businesses had in the recent past used electricity principally for lighting, heating and cooling, hot water, and office equipment including computers, ignoring for this discussion the power needs of data centers, many businesses will be utilizing computers with larger chip sets increasing electricity needs (.. think AI).

In the politicization of a consultant study commissioned by the State government to justify the implementation of the Climate Solutions Now Act of 2022, which by its own admission only considers a subset of energy use that might be subject to that single state law, the spurious projection is that Maryland electric systems would see load growth rates in the range of 0.6 – 2.1% per year through 2031. The projection ignores the historical reality that Maryland’s total electricity load growth has been in excess of 4.9% per year. School buildings have been among the largest constants in increasing electricity use and are excluded from that law and State government spin. The study further underestimated growth by not including any of the public or private cogeneration plants in the plants which are growing all but exponentially in response to concerns about the future unreliability of Maryland’s electric grid.

The political spin around Maryland’s future electric load growth is silent on the gerrymandered parameters discussed by the Maryland Department of the Environment when it by design excludes the largest private sector electricity customer in the state, Johns Hopkins (which has and is constructing large cogeneration plants) and the largest public sector electric user in the state, Fort Meade (which having maxed out electricity capacity of the grid as BGE’s largest customer, now not only has its own fossil fuel generation on base but also has deployed a series of 1.6 megawatt of solid oxide fuel cells, apparently to reliably power NSA facilities, eliminating the need for electrical transmission from the grid and costly backup infrastructure). Despite those efforts, in response to future needs for increasing amounts of electricity, the U.S. Department of Defense has publicly discussed relocating equipment from the Maryland base to states with better electricity capacity.

From a conservation perspective, none of this makes much sense when Maryland ranks among the 10 states with both the lowest total per capita energy consumption and the lowest energy use to produce one dollar of GDP. MDE should take a win.

An interesting factoid, the Port of Baltimore is the second largest coal exporting port in the country, so the State’s economy benefits hugely from shipping the fossil fuel to India for electricity generation although exports were temporarily halted on March 26 with the main channel blocked by the collapse of the Francis Scott Key Bridge.

But MDE’s apocalyptic environmentalism, attempting to implement policies founded in the idea that unless humankind drastically reduces consumption the state’s population and appetite will overwhelm the ecosystems, were checked by the legislature this year when the Department’s plan to ration electricity (i.e., its proposed regulation of Energy Use Intensity in buildings) when the legislature cut off funding to implement EUI regulation.

The Maryland economy does not produce much of anything but rather relies heavily on government services and pendant professional services, those that support government and will be big users of energy demanding AI computing. Out of concern about the grid becoming less reliable, including the state government’s aim to ration electricity, the top question by many prospective commercial tenants in Maryland has become backup electricity sources.

Maryland, like many other similarly situated states, cannot import its way out of this predicament with ever increasing electricity demand, produced from coal or not. The State’s 20th century heavily government controlled utility model doesn’t encourage innovation, but the state needs to innovate in matters of energy. Maryland requires a techno optimism application of science and technology to resolve this dilemma of producing more electricity.

Chinese Solar Panel Tariffs: Protecting U.S. Industry or Hindering Green Growth?

Much attention has been paid to the Biden Administration’s announcement last week of 100% tariffs on Chinese electric vehicles, however with only a few thousand Chinese EVs ever exported to the U.S., barely breaking 1% of U.S. EV sales, that duty is more election year politics than impactful. However, also raising tariffs on Chinese solar panels and their component parts from 25% to 50% through 2026, claiming China is “flooding global markets with artificially low priced” solar panels, will increase the price of solar installations to large numbers of U.S. customers concomitantly slowing the uptake of renewable energy.   

Today maybe 7% of homes across the U.S. have solar panels on the roof, and the federal government goal is for that number to grow to over 15% by 2030 with the falling cost of solar installations having been and continuing to be crucial in accelerating that changeover. With nearly 97% of solar installations being residential solar on roofs, that is where the increased costs of the new tariffs will be borne.

.. and U.S. consumers will continue to bear until domestic production of solar panels becomes a reality, which is in the offing with a reported more than $17 Billion in Inflation Reduction Act grants for the construction of solar industry manufacturing plants, although several marquee projects have since been quietly shelved or slowed.

The immediate impact on U.S. business from this action will not be significant because businesses are already and increasingly seeking to protect human rights including implementing ethical purchasing practices in company contract documents, be it supply contracts, purchase contracts, and similar writings for the purchase of goods and materials including Chinese solar panels and much more.

But then 3 days ago, the White House released a Fact Sheet tightening other solar panel policies including that as a result of recent litigation being able to remove the current exemption from tariffs for bifacial solar panels, those generally used in utility scale solar projects and increasing the dollar costs of those projects. Additionally, the Department of Commerce will now double down on enforcement of the requirement that panels imported duty free must be installed within 180 days to prevent stockpiling.

Then last Thursday refocusing on China, the U.S. banned imports from 26 China based cotton traders or textile warehouses adding them to the Uyghur Forced Labor Prevention Act Entity List in a continued effort to eliminate goods made with the forced labor of Uyghur minorities from the U.S. supply chain.

Tariffs are not new. The second bill signed by President George Washington was The Tariff Act of 1789.  Commerce and foreign affairs are proper functions dating to the founding of the American government. The Act had two purposes, to promote trade, and to raise revenue for the government when it imposed a 50¢ per ton duty on foreign ships and 6¢ on American built ships. Today, tariffs, and the threat of tariffs, have become central to U.S. trade policy. But because Alexander Hamilton was a proponent of tariffs doesn’t mean that the historical justification for protectionism over free trade has application today when they broadly impede prosperity and more narrowly wreak havoc on federal government regulation of environmental protection.

The first U.S. tariffs on Chinese made solar panels by the Obama Administration in 2012 blocked imports but failed to drive their stated purpose of surging the domestic solar panel industry. In 2015, those tariffs were expanded in response to Chinese companies shifting assembly to other Southeast Asian countries. And then in 2018, the Trump Administration imposed 25% tariffs on solar panels and many other Chinese goods that are now being increased to 50% (whether or not assembled into modules). But to be efficacious in 2022, tariffs on solar panels were expanded to include Cambodia, Malaysia, Thailand, and Vietnam for using components from China to evade tariffs on panels from China, however a “bridge” was created by the Biden Administration to ameliorate the harsh impact on domestic markets delaying implementation until June 6, 2024 (a date now upon us). 

In this instance, section 301 of the Trade Act of 1974 directs a four year review including a consideration of the effectiveness of the tariff actions and the overall effects of the tariff actions on the U.S. economy. An Office of the U.S. Trade Representative’s Report addresses the statutory elements of the review recommending that products from China currently subject to Section 301 tariffs for “unfair, nonmarket practices” should remain and additionally, “in light of the increased burden on U.S. commerce” new tariffs should be imposed.

In 2024, despite efforts to build new factories in the U.S. and across the globe, China’s share in all manufacturing stages of solar panels (such as polysilicon, ingots, wafers, cells, and modules) still exceeds 80%, and 90% in some parts of that global solar supply chain. And that does not include the significant Chinese investments in solar panel factories across Southeast Asia.

That market share also does not include the five foreign adversary controlled Chinese solar companies that have announced investments in new manufacturing plants being constructed in the U.S. and benefitting from Inflation Reduction Act incentives, as observed by the House Foreign Affairs Committee earlier this year. .. you can’t make this stuff up.

And of course, these are tariffs on imports into the U.S. such that China sourced solar panels will be rerouted to the EU or almost anywhere else in the world.

The dollar costs of these solar panel tariffs, largely burdening U.S. consumers could well be justified by the gains from punishing trade violations and reducing dependence on foreign adversary controlled companies or maybe building a resilient domestic supply chain for onsite renewable energy, but the very modest dollar amount of new tariffs in international terms will almost certainly accomplish none of that and risks the further dollar cost of China’s all but certain retaliation for what it has already called, “a clear act of protectionism.”

Americans need to plan for uncertainty and budget for the higher costs of solar panels.

Policymakers will have to grapple with competing interests after the election year politics, but the continued subsidizing of domestic solar panel installations while at the same time pursuing protectionist foreign trade practices arising from China’s manufacture of more than 80% of the world’s solar panels is not only schizophrenic but bad foreign policy and bad environmental public policy.

Constitutional Rights vs. Climate Change: Inside the Juliana Case Dismissal

The environmental climate change case that has attracted the most attention, Juliana v. United States has come to an unceremonious end and all Americans should be concerned. On May 1, 2024, the Ninth Circuit Court of Appeals ordered, “The district court is instructed to dismiss the case forthwith for lack of Article III standing, without leave to amend.

Without regard to one’s perspective on the merits of the claims, the dismissal of this case after nearly a decade but before even the first witness was called, which was requested with apparent equal vigor by the Obama, Trump, and now Biden administrations make this dismissal troubling.

Commenced in 2015, twenty one plaintiffs, then ages 8 through 19, claimed that by failing to adequately respond to the threat of climate change the U.S. government has violated a “fundamental constitutional right to life, liberty, and property by substantially causing or contributing to a dangerous concentration of CO2 in the atmosphere, and that, in so doing, Defendants dangerously interfere with a stable climate system required by our nation and Plaintiffs alike.

In a prior challenge to this case by the government, in 2020 the Ninth Circuit held that the 21 Juliana plaintiffs lack Article III standing to bring such a claim.  The appellate court explained that the judicial branch could not mandate broad policy changes that are better left to the legislative and executive branches.

The court remanded with instructions to dismiss on that basis.  The District Court allowed an amendment of the complaint (.. this pleading is a great read), which narrowed the prayer for relief to a request for declaratory judgment against the U.S. government. The government again moved to dismiss.

This Court explained, in the prior appeal, when held that declaratory relief was “not substantially likely to mitigate the plaintiffs’ asserted concrete injuries.”  The Court reasoned to the contrary, it would do nothing “absent further court action,” which it held was unavailable. And then explained that Article III courts could not “step into the shoes” of the political branches to provide the relief the Juliana plaintiffs sought. Concluding because the request for declaratory relief was “not justiciable” the Court “remanded the case to the district court with instructions to dismiss for lack of Article III standing.”

While not garden variety, the theory of the case is not unique. Last year, the state court ruled in favor of the 16 youth plaintiffs in Held v. State of Montana, in a 103 page decision declaring that the state of Montana violated the youth’s state constitutional rights, including their rights to equal protection, dignity, liberty, health and safety, and public trust, which are all predicated on their right to a clean and healthful environment.

Globally, the cumulative number of climate change related cases has more than doubled since this case was filed in 2015, bringing the total number of cases to over 2,000, which includes claims of greenwashing. According to the Grantham Research Institute, it is tracking cases filed before courts in 43 countries from Australia to Germany and Pakistan to Papua New Guinea with the largest number against businesses in the U.S. 

Scholarly critics of this court decision, from the left and the right, observe the U.S. Constitution establishes three separate but equal branches of government. The framers structured the government this way to create a system of checks and balances preventing any one branch of government from becoming too powerful. But this decision has the judicial branch self determining the courts to be inferior, certainly not coequal. A widely quoted law professor has chastised this appeals court observing that federal courts have in recent years tacked matters of immigration policy, health insurance, abortion rights, and more, but in this instance, the court found the capstone constitutional right of the people to petition the government for a redress of grievances does not extend to the environment and climate.

Quoting from the amended complaint itself, this result appears inconsistent with the U.S. Supreme Court’s holding in Obergefell v. Hodges, “when the rights of persons are violated, ‘the Constitution requires redress by the courts,’ notwithstanding the more general value of democratic decision making.

In this instance, the Federal government filed a seventh Petition For Writ Of Mandamus seeking to preclude plaintiffs from getting to trial on their amended complaint by enforcing the earlier mandate of dismissal in response to which the District Court on April 19, 2024, filed a comprehensive Supplemental Order denying the government’s request for a stay and concluding “this Court recommends denying defendants’ petition for writ of mandamus.” But on May 1, 2024, the Ninth Circuit granted the government’s requested extraordinary remedy. The District Court dismissed the case after receiving that May 1st order.

The Ninth Circuit’s decision that environmental climate change is not justiciable is already having repercussions. On May 8, 2024, a Federal Court in California relying on the decision  dismissed a class action by minors against the U.S. EPA claiming they “have been harmed by climate change due to increased pollution and emissions, rising temperatures, extreme weather patterns, and wildfire exposure.

The plaintiffs in Juliana could ask the full 11 judges of the Ninth Circuit to reconsider this decision, but in part, because a similar request was denied from the 2020 dismissal, such is considered unlikely. This second dismissal of the case by the Ninth Circuit is likely to be the final word in this storied case but only the beginning of climate change litigation pursued not only under constitutional theories but also under state tort law and under the umbrella of ESG causes of action. 

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