Climate Change

A Solution Enabled by the Conflict in Ukraine, Cryptocurrency Regulation, and the Energy Crisis Could Address All Three Issues

Chase Webber, MJLST Staffer

This post focuses on two political questions reinvigorated by Vladimir Putin’s invasion of Ukraine: the energy crisis and the increasing popularity and potential for blockchain technology such as cryptocurrency (“crypto”).  The two biggest debates regarding blockchain may be its extraordinarily high use of energy and the need for regulation.  The emergency of the Ukraine invasion presents a unique opportunity for political, crypto, and energy issues to synergize – each with solutions and positive influence for the others.

This post will compare shortcomings in pursuits for environmentalism and decentralization.  Next, explain how a recent executive order is an important turning point towards developing sufficient peer-to-peer technology for effective decentralization.  Finally, suggest that a theoretical decentralized society may be more well-equipped to address the critical issues of global politics, economy, and energy use, and potentially others.

 

Relationship # 1: The Invasion and The Energy Crisis

Responding to the invasion, the U.S. and other countries have sanctioned Russia in ways that are devastating Russia’s economy, including by restricting the international sale of Russian oil.  This has dramatic implications for the interconnected global economy.  Russia is the second-largest oil exporter; cutting Russia out of the picture sends painful ripples across our global dependency on fossil fuel.

Without “beating a dead dinosaur” … the energy crisis, in a nutshell, is that (a) excessive fossil fuel consumption causes irreparable harm to the environment, and (b) our thirst for fossil fuel is unsustainable, our demand exceeds the supply and the supply’s ability to replenish, so we will eventually run out.  Both issues suggest finding ways to lower energy consumption and implement alternative, sustainable sources of energy.

Experts suggest innovation for these ends is easier than deployment of solutions.  In other words, we may be capable of fixing these problems, but, as a planet, we just don’t want it badly enough yet, notwithstanding some regulatory attempts to limit consumption or incentivize sustainability.  If the irreparable harm reaches a sufficiently catastrophic level, or if the well finally runs dry, it will require – not merely suggest – a global reorganization via energy use and consumption.

The energy void created by removing Russian supply from the global economy may sufficiently mimic the well running dry.  The well may not really be dry, but it would feel like it.  This could provide sufficient incentive to implement that global energy reset, viz., planet-wide lifestyle changes for existing without fossil fuel reliance, for which conservationists have been begging for decades.

The invasion moves the clock forward on the (hopefully) inevitable deployment of green innovation that would naturally occur as soon as we can’t use fossil fuels even if we still want to.

 

Relationship # 2: The Invasion and Crypto   

Crypto was surprisingly not useful for avoiding economic sanctions, although it was designed to resist government regulation and control (for better or for worse).  Blockchain-based crypto transactions are supposedly “peer-to-peer,” requiring no government or private intermediaries.  Other blockchain features include a permanent record of transactions and the possibility of pseudonymity.  Once assets are in crypto form, they are safer than traditional currency – users can generally transfer them to each other, even internationally, without possibility of seizure, theft, taxation, or regulation.

(The New York Times’ Latecomer’s Guide to Crypto and the “Learn” tab on Coinbase.com are great resources for quickly building a basic understanding of this increasingly pervasive technology.)

However, crypto is weak where the blockchain realm meets the physical realm.  While the blockchain itself is safe and secure from theft, a user’s “key” may be lost or stolen from her possession.  Peer-to-peer transactions themselves lack intermediaries, but hosts are required for users to access and use blockchain technology.  Crypto itself is not taxed or regulated, but exchanging digital assets – e.g., buying bitcoin with US dollars – are taxed as a property acquisition and regulated by the Security Exchange Commission (SEC).  Smart contract agreements flounder where real-world verification, adjudication, or common-sense is needed.

This is bad news for sanctioned Russian oligarchs because they cannot get assets “into” or “out of” crypto without consequence.  It is better news for Ukraine, where the borderless-ness and “trust” of crypto transaction eases international transmittal of relief assets and ensures legitimate receipt.

The prospect of crypto being used to circumvent U.S. sanctions brought crypto into the federal spotlight as a matter of national security.  President Biden’s Executive Order (EO) 14067 of March 9, 2022 offers an important turning point for blockchain: when the US government began to direct innovation and government control.  Previously, discussions of whether recognition and control of crypto would threaten innovation, or a failure to do so would weaken government influence, had become a stalemate in regulatory discussion. The EO seems to have taken advantage of the Ukraine invasion to side-step the stagnant congressional debates.

Many had recognized crypto’s potential, but most seemed to wait out the unregulated and mystical prospect of decentralized finance until it became less risky.  Crypto is the modern equivalent of private-issued currencies, which were common during the Free Banking Era, before national banks were established at the end of the Civil War.  They were notoriously unreliable.  Only the SEC had been giving crypto plenty of attention, until (and especially) more recently, when the general public noticed how profitable bitcoin became despite its volatility.

EO 14067’s policy reasoning includes crypto user protection, stability of the financial system, national security (e.g., Russia’s potential for skirting sanctions), preventing crime enablement (viz., modern equivalents to The Silk Road dark web), global competition, and, generally, federal recognition and support for blockchain innovation.  The president asked for research of blockchain technology from departments of Treasury, Defense, Commerce, Labor, Energy, Homeland Security, the Consumer Financial Protection Bureau (CFPB), Federal Trade Commission (FTC), SEC, Commodity Futures Trading Commission (CFTC), Environmental Protection Agency (EPA), and a handful of other federal agencies.

While promoting security and a general understanding of blockchain’s potential uses and feasibility, the order also proposes Central Bank Digital Currencies (CBDC).  CBDCs are FedCoins – a stablecoin issued by the government instead of by private entities.  Stablecoins (e.g., Tether) are a type of crypto whose value is backed by the US Dollar, whereas privately issued crypto (e.g., Bitcoin, Ether) are more volatile because their value is backed by practically nothing.  So, unlike Tether, a privately issued stablecoin, CBDCs would be crypto issued and controlled by the U.S. Treasury.

Imagine CBDCs as a dollar bill made of blockchain technology instead of paper.  A future “cash transaction” could feel more like using Venmo, but without the intermediary host, Venmo.

 

Relationship # 3: Crypto and Energy

Without getting into too many more details, blockchain technology, on which crypto is based, requires an enormous amount of energy-consuming computing power.

Blockchain is a decentralized “distributed ledger technology.” The permanent recordings of transactions are stored and verifiable at every “node” – the computer in front of you could be a node – instead of in a centralized database.  In contrast, the post you are now reading is not decentralized; it is “located” in a UMN database somewhere, not in your computer’s hard drive.  Even a shared Google Doc is in a Google database, not in each of the contributor’s computers.  In a distributed system, if one node changes its version of the distributed ledger, some of the other nodes verify the change.  If the change represents a valid transaction, the change is applied to all versions at each node, if not, the change is rejected, and the ledger remains intact.

These repeated verifications give blockchain its core features, but also require a significant amount of energy.

For most of the history of computers, computing innovation has focused primarily on function, especially increased speed.  Computer processing power eventually became sufficiently fast that, in the last twenty-ish years, computing innovation began to focus on achieving the same speed using less energy and/or with more affordability.  Automotive innovation experienced a similar shift on a different timeline.

Blockchain will likely undergo the same evolution.  First, innovators will focus on function and standardization.  Despite the popularity, this technology still lacks in these areas.  Crypto assets have sometimes disappeared into thin air due to faulty coding or have been siphoned off by anonymous users who found loopholes in the software.  Others, who became interested in crypto during November 2021, after hearing that Ether had increased in value by 989% that year and the crypto market was then worth over $3 trillion, may have been surprised when the value nearly halved by February.

Second, and it if it is a profitable investment – or incentivized by future regulations resulting from EO14067 – innovators will focus on reducing the processing power required for maintaining a distributed ledger.

 

Decentralization, and Other Fanciful Policies

Decentralization and green tech share the same fundamental problem.  The ideas are compelling and revolutionary.  However, their underlying philosophy does not yet match our underlying policy.  In some ways, they are still too revolutionary because, in this author’s opinion, they will require either a complete change in infrastructure or significantly more creativity to be effective.  Neither of these requirements are possible without sufficient policy incentive.  Without the incentive, the ideas are innovative, but not yet truly disruptive.

Using Coinbase on an iPhone to execute a crypto transaction is to “decentralization” what driving a Tesla running on coal-sourced electricity is to “environmentalism.”  They are merely trendy and well-intentioned.  Tesla solves one problem – automotive transportation without gasoline – while creating another – a corresponding demand for electricity – because it relies on existing infrastructure.  Similarly, crypto cannot survive without centralization.  Nor should it, according to the SEC, who has been fighting to regulate privately issued crypto for years.

At first glance, EO 14067 seems to be the nail in the coffin for decentralization.  Proponents designed crypto after the 2008 housing market crash specifically hoping to avoid federal involvement in transactions.  Purists, especially during The Digital Revolution in the 90s, hoped peer-to-peer technology like blockchain (although it did not exist at that time) would eventually replace government institutions entirely – summarized in the term, “code is law.”  This has marked the tension between crypto innovators and regulators, each finding the other uncooperative with its goals.

However, some, such as Kevin Werbach, a prominent blockchain scholar, suggest that peer-to-peer technology and traditional legal institutions need not be mutually exclusive.  Each offers unique elements of “trust,” and each has its weaknesses.  Naturally, the cooperation of novel technologies and existing legal and financial structures can mean mutual benefit.  The SEC seems to share a similarly cooperative perspective, but distinguished, importantly, by the expectation that crypto will succumb to the existing financial infrastructure.  Werbach praises EO 14067, Biden’s request that the “alphabet soup” of federal agencies investigate, regulate, and implement blockchain, as the awaited opportunity for government and innovation to join forces.

The EPA is one of the agencies engaged by the EO.  Pushing for more energy efficient methods of implementing blockchain technology will be as essential as the other stated policies of national security, global competition, and user friendliness.  If the well runs dry, as discussed above, blockchain use will stall, as long as blockchain requires huge amounts of energy.  Alternatively, if energy efficiency can be attained preemptively, the result of ongoing blockchain innovation could play a unique role in addressing climate change and other political issues, viz., decentralization.

In her book, Smart Citizens, Smarter State: The Technologies of Expertise and the Future of Governing, Beth Simone Noveck suggests an innovative philosophy for future democracies could use peer-to-peer technology to gather wide-spread public expertise for addressing complex issues.  We have outgrown the use of “government bureaucracies that are supposed to solve critical problems on their own”; by analogy, we are only using part of our available brainpower.  More recently, Decentralization: Technology’s Impact on Organizational and Societal Structure, by local scholars Wulf Kaal and Craig Calcaterra, further suggests ways of deploying decentralization concepts.

Decentralized autonomous organizations (“DAOs”) are created with use of smart contracts, a blockchain-based technology, to implement more effectively democratic means of consensus and information sharing.  However, DAOs are still precarious.  Many of these have failed because of exploitation, hacks, fraud, sporadic participation, and, most importantly, lack of central leadership.  Remember, central leadership is exactly what DAOs and other decentralized proposals seek to avoid.  Ironically, in existing DAOs, without regulatory leadership, small, centralized groups of insiders tend to hold all the cards.

Some claim that federal regulation of DAOs could provide transparency and disclosure standards, authentication and background checks, and other means of structural support.  The SEC blocked American CryptoFed, the first “legally sanctioned” DAO, in the state of Wyoming.  Following the recent EO, the SEC’s position may shift.

 

Mutual Opportunity

To summarize:  The invasion of Ukraine may provide the necessary incentive for actuating decentralized or environmentalist ideologies.  EO 14067 initiates federal regulatory structure for crypto and researching blockchain implementation in the U.S.  The result could facilitate eventual decentralized and energy-conscious systems which, in turn, could facilitate resolutions to grave impending climate change troubles.  Furthermore, a new tool for gathering public consensus and expertise could shed new light on other political issues, foreign and domestic.

This sounds suspiciously like, “idea/product X will end climate change, all political disagreements, (solve world hunger?) and create global utopia,” and we all know better than to trust such assertions.

It does sound like it, but Noveck and Kaal & Calcaterra both say no, decentralization will not solve all our problems, nor does it seek to.  Instead, decentralization offers to make us, as a coordinated society, significantly more efficient problem solvers.  A decentralized organizational structure hopes to allow humans to react and adapt to situations more naturally, the way other living organisms adapt to changing environments.  We will always have problems.  Centralization, proponents argue, is no longer the best means of obtaining solutions.

In other words, one hopes that addressing critical issues in the future – like potential military conflict, economic concerns, and global warming – will not be exasperated or limited by the very structures with which we seek to devise and implement a resolution.


Hydrogen – The Fuel of the Future?

Max Meyer, MJLST Staffer

Hydrogen is viewed by many as being a key part of reducing global greenhouse gas emissions. Recently, a bipartisan group of lawmakers expressed interest in hydrogen and want to support its adoption in the United States. When used as a fuel source, hydrogen produces only water and heat. It could potentially be used to power cars, trucks, and airplanes and generate electricity. Hydrogen is used on a fairly minimal scale today, but entities ranging from industry to government are increasing investment in the technology. Currently, hydrogen is regulated by a variety of federal agencies, but no comprehensive regulatory scheme exists.

 

Hydrogen Production 

Hydrogen is one of the most abundant elements on earth, but it only exists in compound form with other elements. Hydrogen has the highest fuel content of any fuel by weight.

Hydrogen can be separated from compounds in a few different ways. It can be produced from steam-methane reforming which accounts for 95% of hydrogen production in the U.S. In this process, “natural gas (which is mostly methane) reacts with high pressure, high temperature steam in the presence of a catalyst to produce a mixture of mostly hydrogen and carbon monoxide.” The product stream is then processed further to produce a stream of mostly hydrogen. Water can be added to this mixture to convert the carbon monoxide into carbon dioxide. If the carbon dioxide is subsequently capture and stored underground, the hydrogen produced is referred to as blue hydrogen. If the carbon dioxide is not captured, the hydrogen is called grey hydrogen.

Hydrogen can also be produced from water by electrolysis which splits water molecules into pure hydrogen and oxygen using electricity. When renewable energy is used for electrolysis the resulting hydrogen is often referred to as green hydrogen.

 

Why Is It Important?

Using fuel cells, hydrogen can produce electricity. A fuel cell contains two electrodes, one negative and one positive, with an electrolyte in the middle. Hydrogen is fed into the negative electrode and air is fed into the positive end. At the negative end, a catalyst separates the hydrogen molecules into protons and electrons. To produce electricity, the electrons go through an external circuit before entering the positive electrode. Then, the protons, electrons, oxygen unite to produce water and heat. Fuel cells can be used in a number of applications ranging passenger and commercial vehicles to powering buildings.

 

Current Regulatory Framework

Hydrogen is regulated by several federal agencies. The Pipeline and Hazardous Materials Safety Administration (PHMSA) regulates hydrogen pipelines. PHMSA’s mission is to “protect people and the environment by advancing the safe transportation of energy and other hazardous materials[.]” Thus, PHMSA’s regulation of hydrogen pipelines is focused on safety. The Occupational Safety and Health Administration (OSHA) regulates hydrogen in workplaces OSHA’s regulation of hydrogen specifically covers the installation of hydrogen systems. The Environmental Protection Agency (EPA) also regulates hydrogen in several ways. Hydrogen is regulated under the EPA’s Mandator Greenhouse Gas Reporting Program, Effluent Standards under the Clean Water Act, and Chemical Accident Prevention program. However, the EPA’s regulation of hydrogen is primarily a result of hydrogen’s relationship to fossil fuels. The regulations are concerned with the production of hydrogen from fossil fuels such as the methane steam reform process outlined above.

The Department of Energy (DOE) has invested in research and development concerning hydrogen. In 2020, the DOE released its Hydrogen Program Plan. The DOE’s program is intended to “research, develop and validate transformational hydrogen and related technologies… and to address institutional and market barriers, to ultimately enable adoption across multiple applications and sectors.”

In 2021, Congress passed an infrastructure bill with $9.5 billion of funding for clean hydrogen initiatives. $8 billion of that funding is directed towards the creation of Regional Clean Hydrogen Hubs across the country to increase the use of hydrogen in the industrial sector. $1 billion is for clean hydrogen electrolysis research to lower costs from producing hydrogen using renewable energy. Finally, $500 million is for Clean Hydrogen Manufacturing and Recycling to “support equipment manufacturing and strong domestic supply chains.”

 

Regulation in the Future

The federal government currently does not regulate the construction of hydrogen pipelines. Presently, the Federal Energy Regulatory Commission (FERC) under the Natural Gas Act “regulates the siting, construction, and operation of interstate natural gas pipelines.” If Congress were to give FERC this same power for hydrogen pipelines it would allow for national planning of the infrastructure and lead to a comprehensive pipeline network. Recently, members of Congress have considered the regulatory framework covering hydrogen pipelines and if additional authority over these pipelines should be given to FERC or other federal agencies. However, these discussions are still in the preliminary stages.

Hydrogen has the potential to play a large role in the United States’ effort to reduce greenhouse gas emissions. It can be used in a variety of industries including the transportation and industrial sectors. Congress has recognized hydrogen’s importance and must continue to invest in lowering the costs of hydrogen production and building hydrogen infrastructure.


How the Biden Administration Has Made Offshore Wind a Priority

Max Meyer, MJLST Staffer

Since coming into office in January of 2021, the Biden Administration has made fighting climate change and reducing domestic greenhouse gas (GHG) emissions a priority. In particular, the Biden Administration set a goal of doubling the nation’s offshore wind capacity in Executive Order 14008. Reaching this goal would result in 30 Gigawatts (GW) of offshore wind capacity. Developing offshore wind energy will help states reach their clean and renewable energy goals as many sates on the coast do not have large wind energy resources on land. Since the issuance of Executive Order 14008, the Department of the Interior (DOI) has taken several steps towards reaching that goal.

Statutory Authority

Under the Outer Continental Shelf Lands Act (OCSLA) (codified at 43 U.S.C. ch. 29), passed in 1953, the Secretary of the Interior is charged with the administration of mineral exploration and development of the Outer Continental Shelf (OCS). The OCS is defined as “all submerged lands lying seaward of state coastal waters (3 miles offshore) which are under U.S. jurisdiction.”

In the Energy Policy Act of 2005 (EPAct), Congress created the OCS Renewable Energy Program to be administered by the DOI. Under this authority, the DOI in 2009 promulgated regulations for leases, easements, and rights-of-way for renewable energy development in the OCS. The Bureau of Ocean Energy Management (BOEM), under the DOI, is the agency tasked with overseeing the renewable energy development program.

Regulatory Authority

The BOEM renewable energy development program is broken into four steps: (1) planning, (2) leasing, (3), site assessment, and (4) construction and operations. During the first step, BOEM identifies Wind Energy Areas (WEAs) which are “locations that appear most suitable for wind energy development.” After WEAs have been identified, BOEM issues a public notice to gauge the interest in leasing land in the WEA. Depending on the interest received from BOEM, leasing is done through either a competitive or noncompetitive leasing process.

After leasing is completed, the lessee must submit a Site Assessment Plan (SAP) to BOEM. The purpose of the SAP is for the lessee to provide documentation so that BOEM can evaluate whether the project will comply with applicable regulations. The agency can either approve, approve with modification, or disapprove the SAP. Finally, the lessee must produce a Construction and Operations Plan (COP). As the name suggests, this submission includes a “detailed plan for the construction and operation of a wind energy project on the lease.” BOEM reviews the COP, including environmental review, and can either approve, approve with modification, or disapprove the COP.

Recent Offshore Wind Developments

In May 2021, the DOI approved the COP for the Vineyard Wind project located near Martha’s Vineyard and Nantucket. This is the first large-scale, offshore wind project in the United States. The project will have 800 Megawatt (MW) of energy capacity which is enough to power 400,000 homes and businesses. Construction of the project began in November 2021. One of the first steps in the construction process will be placing two transmission cables to transmit electricity from the Vineyard Wind project to the mainland.

Also in November 2021, the DOI approved the COP for the South Fork Wind making it the second large-scale, offshore wind project in the United States. This project off the coasts of New York and Rhode Island will have a capacity of 130 MW which is enough to power approximately 70,000 homes.

In addition to granting final approval of several projects, BOEM has also taken action in the earlier steps of the OCS renewable energy process. For the Carolina Long Bay WEA, located off the coast of the Carolinas, the BOEM began taking public comments on a proposed lease. In October, BOEM received the COP for the Mayflower Wind project. This project would also be located near Martha’s Vineyard and Nantucket and would have an energy capacity of more than 2 GW. If approved, the Mayflower Wind project would be one of the largest offshore wind projects in the United States. BOEM also published a Call for Information and Nominations to gauge commercial interest in wind energy development in the Gulf of Mexico.

BOEM has also taken steps to advance offshore wind in the Pacific Ocean in 2021. In July, BOEM published a Call for Information and Nominations to determine commercial interest in the Morro Bay Call Area East and West Extensions, a portion of the Morro Bay WEA. This WEA is located off the coast of Central California. Finally, BOEM designated the Humboldt WEA off the northern coast of California moving closer to the leasing process in this area.

Despite heavy support from the Biden Administration, offshore wind does face opposition. The commercial fishing industry has emerged as a strong opponent of these projects. The industry is concerned that the turbines will impact fish and hinder access to fishing grounds. The Biden Administration could face legal challenges to offshore wind development, particularly under the National Environmental Policy Act (NEPA), from the fishing industry. One such challenge in Fisheries Survival Fund v. Haaland, 858 F. App’x 371 (D.C. Cir. 2021) has proven unsuccessful for the fishing industry.

While the DOI and BOEM have taken many actions to further develop offshore wind in the United States, much more will have to be done to reach the Biden Administration’s goal of 30 MW of offshore wind capacity by 2030. Nonetheless, offshore wind is an important resource for coastal states looking to decarbonize their energy generation and for reaching the Biden Administration’s decarbonization goals.


One Person’s Trash is Another’s Energy

Carlton Hemphill, MJLST Staffer

It comes to many as a literal and metaphorical breath of fresh air to see the new administration’s interest in reducing the effect we have on the environment, but achieving a goal of net-zero emissions by 2050 is no small feat for such a large country and requires leaving no stone unturned. Much of the recent focus in the media has been on increasing the prevalence of electric cars and switching to renewable energy sources that do not emit carbon dioxide or other greenhouse gases, such as wind and solar. That being said, there is another often overlooked process that, while not the end all solution, can still help us achieve this goal of reducing greenhouse gases, and in my opinion should be getting more attention than it is currently receiving. I am referring to the use of anaerobic digesters.

The Dirty Details:

Let’s face it, people generate a lot of waste, both food waste and excrement. Everybody eats and everybody poops. Moreover, the animals we raise for food also generate an enormous amount of waste. Methane, a byproduct from the decomposition of organic matter such as excrement, acts as a greenhouse gas if released into the atmosphere before being burned. Compared to CO2, methane is 25 times as powerful as a greenhouse gas. Anaerobic digesters use microbes to break down organic waste to produce methane (referred to as biogas) which is then burned to generate electricity.

This is not a novel concept either. Some cities and farms have already taken steps to implement anaerobic digesters for harnessing biogas from sewage and manure. States like Connecticut and New York already implement biogas programs, and many dairy farms across the nation have anaerobic digesters that produce methane from manure. A town in Colorado even powers vehicles using poop . . . yes, you read that correctly.

However, across the country the potential of biogas has not yet been fully realized, meaning there is still a large amount of methane escaping into the atmosphere as a greenhouse gas that could instead be captured and transformed into electricity. The American Biogas Council states that there are currently over 2,200 biogas production sites across the U.S. with the potential for an estimated 14,958 additional sites “ripe for development.”

The biggest barriers to widespread implementation of biogas production stem from a combination of economic feasibility, infrastructure, and lack of political support. Biodigesters can require a large capital investment to setup with financial benefits not being immediately realized. Additionally, while wastewater treatment plants and landfills have existing infrastructure better suited for conversion to biogas production and utilization, rural farms would need either pipes to move the gas or connection to the electrical grid to sell back the generated electricity. Without the necessary political support, in the form of government programs financially incentivizing anaerobic digestion, these issues will continue to act as a deterrent.

Federal eye on Biogas:

While the recent executive orders dealing with the climate crisis do mention mitigating methane emissions, the focus is instead on mining in the oil and gas sectors and not repurposing existing organic matter. It seems then that in our nation’s quest to go green we are overlooking the potential to transform the very waste we create. With food waste constituting the second largest category of solid waste sent to landfills, and cities producing millions of tons of sewage annually, implementing anaerobic digesters would provide numerous environmental advantages. They save landfill space, prevent methane from leaking into the atmosphere, and generate electricity reducing our reliance on other forms of electrical generation.

Fortunately, the EPA recognizes the value in biogas production and, if Biden’s proposed $14 billion in spending towards climate change materializes, the EPA may be able to allocate some of that funding towards developing new sites. When creating new laws and policies aimed at climate change perhaps it is best to always keep in mind the universal law of conservation of energy. Energy is neither created nor destroyed, but rather transformed; what we flush down the drain or discard as trash still has energy and it is up to us to utilize it.

 


America is Ready to Fight Climate Change. Is the Grid?

Valerie Eliasen, MJLST Staffer

Climate change is perhaps the most serious threat to our planet’s future. From a rise in average temperatures to more frequent floods, fires, hurricanes, and other natural disasters, the evidence of a warming planet is clear. Scientists warn that climate change and its dangerous effects will continue to worsen unless a strong response to counteract the threats is undertaken immediately. In response to these worries and widespread support of the issue by consumers, numerous large corporations have begun setting goals to combat climate change.

The Biden administration has also prioritized the issue. Among his first acts in office, President Biden signed an executive order, which acted to “place the climate crisis at the forefront of [the] Nation’s foreign policy and national security planning.” Among many other things, Biden’s executive order created a new position to “elevate the issue of climate change” and directed the United States to rejoin the Paris Agreement. The executive order includes a goal to “achieve net-zero emissions, economy-wide, by no later than 2050” and “a carbon pollution-free electricity sector no later than 2035.”

To achieve such a lofty goal, businesses and corporations across the country will need to rapidly change how they do business. It’s easy to see that single use plastics will begin to disappear and that electric vehicles will become more commonplace, but what will the shift to cleaner energy look like?

California provides us with an interesting case study. California is well known for its aggressive and progressive approach to climate change. The State established a detailed climate plan in 2006, which outlines the ways in which the State will reduce emissions and emphasize clean energy in the long run. While a deeper look at California’s experience with aggressive climate policy over the past few years can help us envision what the United States’ increasingly electric future will look like, it provides us with some warnings as well.

The first problem is capacity. Because California’s renewable energy sources primarily come from solar and wind generation, a huge problem is presented when the sun doesn’t shine, the wind slows down, and backup resources aren’t available. In August 2020, when extreme heat hit the southwest, California didn’t have enough of its own energy to power its residents’ air conditioners. Further, the states California often borrows energy from in cases of shortage were experiencing the same heat wave and did not have resources to spare. The result: the first rolling blackouts in close to 20 years. Much of California’s problem lies in its ability to provide energy after the sun sets. The technology to efficiently store energy for later use is not developed enough to provide the kind of storage needed. Further, several of California’s fossil fuel plants have been retired in recent years and haven’t been replaced with enough non-solar energy sources. With increasingly hotter summers and insufficient sources of consistent energy, blackouts are likely to reoccur.

The second problem is the grid. With the United States’ new emissions goals and continued societal shift towards combatting climate change, we are likely to see a large shift to electric appliances and vehicles. Additionally, the use of air-conditioning could increase nearly 60 percent by 2050 due to the planet’s warming temperatures. As such, the power grids are going to need to be able to handle more variable sources of energy and increased demand of electricity in the coming years. The power grids in place in many regions of the United States are not cut out for these changes. California, for example, has the “least reliable electrical power system in the US . . . with more than double the outages of any other state over the last decade” and will likely only become more unreliable as clean energy sources are phased in and others are phased out. The power industry is going to need to invest countless dollars into making power grids more flexible and robust than what we have now. One article likens this process to rebuilding a plane mid-flight.

The nation’s new environmental goals are a vital and important step in combating climate change. Inaction is not an option. Failure is not an option. And thankfully, President Biden’s executive order has the force of law, so the government will be better able to make sure these goals are met. But unless policymakers understand that many of the recent issues in California were caused by poor planning and poor coordination between policymakers and energy producers, California’s reality will become a nationwide problem. The government and the States need to work closely with the power industry, to invest a large amount of money into improving and strengthening the grid, and to expand the amount of renewable energy available day and night. This may be the only way to keep the lights on while helping the planet stay cool.


Regulatory agencies spring into action after Supreme Court decides dusky gopher frog case

Emily Newman, MJLST Staffer

While “critical habitat” is defined within the Endangered Species Act (ESA), a definition for “habitat” has never been adopted within the statute itself or any regulations issued by the two agencies responsible for implementing the ESA, the U.S. Fish and Wildlife Service (USFWS) and the National Marine Fisheries Service (collectively, the “Services”). In 2018, however, the U.S. Supreme Court called this gap into question. Weyerhaeuser Co. v. United States Fish and Wildlife Serv., 139 S. Ct. 361 (2018). In Weyerhaeuser Co. v. United States Fish and Wildlife Service, the Court reviewed a case by which the USFWS designated a particular area of land as critical habitat for the dusky gopher frog, including private property and land that was currently unoccupied by the frog. Id. at 366. Weyerhaeuser Company, a timber company, and a group of family landowners challenged the designation because the land was not currently occupied by this species and would need to be improved before occupation could actually occur. Id. at 367. The Court vacated and remanded the case to the Fifth Circuit, determining that the land first must be designated as “habitat” before being designated as “critical habitat.” Id. at 369. More specifically, they remanded to the Fifth Circuit for it to interpret the meaning of “habitat” under the ESA; however, they did not specifically direct the Services to adopt a definition. Id. The Fifth Circuit ended up dismissing the case upon remand.

The Services’ proposed new rule aims to address this gap. The proposed rule was published on August 5, 2020, and within it, the Services propose two alternative definitions for the meaning of “habitat” which would be added to § 424.02 of the ESA. The first definition is as follows: “The physical places that individuals of a species depend upon to carry out one or more life processes. Habitat includes areas with existing attributes that have the capacity to support individuals of the species.” The alternative definition of “habitat” is listed as: “The physical places that individuals of a species use to carry out one or more life processes. Habitat includes areas where individuals of the species do not presently exist but have the capacity to support such individuals, only where the necessary attributes to support the species presently exist.”

The first definition emphasizes “dependence” while the second emphasizes “use”, but both allow for unoccupied areas to be included in the definition. Additionally, both definitions imply that the land has to be suitable for a particular species in its current condition with no improvements made. The Services clarified that the proposed rule would only be prospective and would not revise any designations of critical habitat already made.

The Services issued the proposed rule largely in order to respond to the Supreme Court’s ruling in Weyerhaeuser, but the Services do mention additional purposes such as the desire to “provide transparency, clarity, and consistency for stakeholders.” The proposed rule is also meant to build upon regulatory reforms issued by the Services in 2019. Additionally, the Services place the proposed rule in a larger context as part of the efforts of the Trump administration to “bring the ESA into the 21st century.”

The proposed rule has received both support and criticism. Those in support of the rule mainly highlight how defining “habitat” would lead to more certainty as to when a particular area would or could be protected under the ESA. They say that this could positively impact species by “aiding the public’s understanding of those areas that constitute habitat” and also by helping companies plan out projects in such a way as to minimize any impact on habitat.

Those against the two definitions contained in the proposed rule have multiple reasons for their criticism. For one, they believe that the primary definition in particular runs the risk of conflating “habitat” and “critical habitat” even though “habitat” presumably should cover a wider area. Second, they argue that defining “habitat” through a regulation is unnecessary and has not been necessary in the 45 plus years that the ESA has been around. This is because defining “habitat” could undermine any critical habitat designations under the ESA, and it would also negatively impact or cause confusion in other parts of the ESA where the word “habitat” is used and other federal statutes that are often “implicated by actions related to listed species.” Third, while the proposed rule is prospective and would not require reevaluations of past critical habitat designations, that does not mean the Services by their own accord won’t reevaluate those designations using the new definition of “habitat.”

The last, and arguably most important, critique of the proposed rule is that either definition has the potential to exclude essential areas of habitat such as fragmented, degraded, or destroyed habitat that would need to be restored, and also habitat that is needed for species whose range will likely fluctuate due to the impacts of climate change. Critics, such as the Southern Environmental Law Center (SELC) and the American Fisheries Society (AFS), argue that this would only maintain the status quo and simply “wouldn’t make sense from a management perspective for species recovery or the legislative perspective intended by Congress in enacting the ESA.” The AFS makes a useful analogy to what would happen if a similar definition applied to polluted waters under the Clean Water Act: “Indeed, if a similar definition was used for polluted waters in the U.S. under the Clean Water Act, we would never have improved water quality by installing treatment systems to remove pollutants, as the definition leaves the only condition as status quo.”

Several opponents of the proposed rule provide their own alternative definitions of habitat or what that definition should include. The Defenders of Wildlife suggest a definition that is consistent with definitions of habitat in academia and with the intent of the ESA, as well as being complementary to but distinct from the definition of “critical habitat” in the ESA: “ ‘Habitat’ is the area or type of site where a species naturally occurs or depends on directly or indirectly to carry out its life processes, or where a species formerly occurred or has the potential to occur and carry out its life processes in the foreseeable future.” Additionally, the AFS advises that any definition of habitat account for areas that may not even “house” the species in question but that are nevertheless important for energy and resource flow; this broader suggestion reflects the move towards “holistic watershed approaches” in fisheries management.

The public comment period for the proposed rule closed on September 4, 2020, but the Services has not yet issued a final rule. Looking ahead, though, the strong opinions both for and against the proposed rule indicate that the Services will most likely face litigation irrespective of what they decide upon in the final rule. Moreover, a change in the Administration following the 2020 election will likely affect the outcome of this regulatory action.

 

 


Extracting Favors: Fossil-Fuel Companies are Using the Pandemic to Lobby for Regulatory Rollbacks and Financial Bailouts

Christopher Cerny, MJLST Staffer

In the waning months of World War II, Winston Churchill is quoted, perhaps apocryphally, as saying, “[n]ever let a good crisis go to waste.” It seems fossil-fuel companies have taken these words to heart. While in the midst of one of the greatest crises of modern times, oil, gas, and coal companies are facing tremendous economic uncertainty, not only from the precipitous drop in demand for gasoline and electricity, but also from the rise of market share held by renewable energy. In response, industry trade groups and the corporations they represent are engaged in an aggressive lobbying campaign aimed at procuring financial bailouts and regulatory rollbacks. The federal government and some states seem inclined to provide assistance, but with the aforementioned rise of renewable energy, many see the writing on the wall for some parts of the fossil-fuel industry.

The ongoing COVID-19 pandemic continues to inflict immeasurable havoc on a global scale. The virus and the mitigation efforts designed to curb its spread have dramatically changed the way humankind interacts with each other and the world around us. In the United States, nearly all states at one time or another implemented mandatory shelter-at-home orders to restrict movement and prevent the further spread of the novel coronavirus. These orders have, in many ways, completely restructured society and the economy, with perhaps no sector being more impacted than transportation. At the peak of the virus in the United States, air travel was down 96% and, in April 2020, passenger road travel was down 77% from 2019. Similarly, the pandemic has altered America’s energy consumption. For example, the Midcontinent Independent System Operator reports a decrease in daily weekday demand in March and April of up to 13% and a national average decline of as much as 7% for the same time frame. A secondary impact of these market disruptions is on the fossil-fuel industry. The decrease in electricity demand has further diminished the already declining coal market, while the fall off in travel and transportation has radically impacted oil prices.

On April 20, a barrel of oil traded for a loss for the first time ever when demand fell so low that the cost storing oil exceeded its sale price. While the price of a barrel of oil, the world’s most traded commodity, has since improved, as of October 1st, the U.S. stock index for domestic oil companies remains down 57% in 2020. Similarly, coal consumption in the United States is projected to decline 23% this year. Natural gas remains resilient, with U.S. demand only dropping 2.8% between January and May of 2020. However, much of natural gas’s buoyancy comes at the expense of lower prices. These numbers are dire, especially for coal and oil, two domestic industries already on the decline due to the rise in renewable energy.

Fossil-fuel companies have gone on the offensive. The oil and gas industry is responding to these calamitous figures and grim financials by lobbying state and federal lawmakers for financial bailouts and the relaxation of environmental regulations. The California Independent Petroleum Association, an oil and gas trade group, requested an extension for compliance with an idle well testing plan that would push 100% program compliance from 2025 to 2029. Further, the trade group asked California to scale back on Gov. Gavin Newsom’s plan to increase the staff of the California Energy Management Division, the state agency charged with oversight of oil and gas drilling. In Texas, the Blue Ribbon Task Force on Oil Economic Recovery, created at the behest of the state oil and gas regulatory body and composed of representatives and leaders of Texas’s oil and gas trade groups, recommended the suspension of particular environmental testing and extensions for environmental reporting to the state agency. The Louisiana Oil and Gas Association asked Louisiana Gov. John Bel Edwards to suspend the state’s collection of severance taxes.

On the national stage, the Independent Petroleum Association of America asked the Chairman of the Federal Reserve to support changes to the Main Street Lending Program, a part of the CARES Act, to expand the eligibility requirements to include many oil and gas producers. The American Fuel and Petrochemical Manufacturers, a refiners trade association, called on the Trump administration and the Environmental Protection Agency (EPA) to waive biofuel policies that mandate the blending of renewable corn-derived ethanol in petroleum refining. The American Petroleum Institute also reached out to the Trump administration seeking the waiver of record keeping and training compliance.

Not to be left behind, the coal industry ramped up its lobbying as well. In an opinion piece, the CEO of America’s Power, a coal trade group extolled the virtues of the fleet of coal power plants and their necessity in the recovery from the COVID-19 pandemic. The National Mining Congress, the coal industry’s lobbying arm, sent a letter to the Trump administration and Congressional leaders asking for an end to the industry’s requirements to pay into funds for black lung disease and polluted mine clean-up

These lobbying efforts are being met with varied levels of success. In a move that garnered criticism from the Government Accountability Office, the Department of the Interior through the Bureau of Land Management cut royalties on oil and gas wells leased by the federal government, saving the industry $4.5 million. The EPA scaled back enforcement of pollution rules, instead relying on companies to monitor themselves. The Governors of Texas, Utah, Oklahoma, and Wyoming sent a letter asking the EPA to waive the biofuel blending regulations in support of the refiners trade group. In September, the EPA denied the request. The Governor of Louisiana agreed to delay the collection of the severance tax, a revenue source for the state that can normally bring in $40 million per month. The Louisiana state legislature later voted to reduce the severance tax on oil and gas from 12.5% to 8.5% for the next eight years. The EPA finalized a rule that it is not “appropriate and necessary” to regulate certain hazardous air pollutants, including mercury, emitted from coil and oil fired power plants.

It is difficult to discern what impact these industry efforts and resulting government actions will have in the long term. The financial measures may have propped up an industry that otherwise would have suffered permanent damage and bankruptcies without the influx of relief and capital. However, environmental groups are more concerned with the regulatory rollbacks. For example, after the EPA chose to allow companies to self-monitor pollution, there was a year-over-year decline of 40% in air emissions tests at industrial facilities and over 16,500 facilities did not submit required water quality reports. The ramifications of the state and federal acquiescence to the fossil-fuel industry’s requested regulatory non-compliance may end up costing the American tax payers millions of dollars, causing irreparable immediate harm to the environment, and delaying critical action needed to mitigate anthropogenic climate change.


Turning the Sky Orange and the Lights Off: West Coast Wildfires Diminish Solar Power Generation

Isaac Foote, MJLST Staffer

On September 9th, 2020 social media feeds were taken over by images of the sky above San Francisco.  As if it was a scene out of Bladerunner 2049, the sky turned a remarkable shade of orange due to smoke from forest fires raging across the West Coast. The fires have had a devastating effect on the region; they have burned over five million acres of forest, forced over 500,000 people to evacuate their homes, and killed over 30 people. Further, the combustion of millions of trees has threatened air quality across the United States and has released over 83 million tons of CO2 emissions into the atmosphere. This is more CO2 than power plants in both California and Oregon release in a typical year and is another example of how climate change perpetuates itself.

In addition to CO2, when forests burn they also spew incredible amounts of soot (another name for black carbon) into the atmosphere. This soot can then join together with water vapor to create pyrocumulonimbus clouds in the stratosphere which, in turn, are very effective at absorbing light from the sun. Because carbon absorbs more blue light than red light, these soot clouds caused the ominous coloration of the sky above San Francisco on September 9th.

While most of the focus on forest fire smoke has (rightfully) been around its potential health effects, the absorption effect mentioned above can also have a significant impact on solar power installations. At a micro scale, the impact of forest fire smoke can be intense. One small scale solar installation in Cupertino, California saw a 95% reduction in energy generation on September 9th. Outside of California, a Utah study demonstrated that a single forest fire within 150 miles of a solar array reduced generation by 12.5% over a three day period following the start of the fire.

At the systemic level, California Independent System Operator (California ISO) reported that at times on September 10th statewide solar generation was reduced by ⅓ compared to typical summer levels. While this did not set off rolling blackouts (as California ISO was forced to implement in mid-August), a 33% shock to generation is a worrying sign for the future. After all, this wave of wildfires already resulted in significant strain on the California transmission system independent of solar disruption. California has a 100% clean energy generation target for 2045 (SB 100 (de León, 2018)) and projections estimate solar will need to constitute a large percentage of California’s energy production to meet this goal. While energy planners factor the instability of solar generation into forecasts of energy production, typical state-wide drops of this magnitude usually occur in winter, when energy demand is reduced due to lower temperatures. With the increased prevalence and intensity of forest fires, California grid operators must be wary of sudden smoke-related drops going into the future, especially during the hot and dry weather that corresponds with both forest fires and high energy usage.

According to the Solar Energy Industries Association, “[a] worst-case wildfire scenario could reduce annual solar-energy production from affected installations by as much as 2%.While this impact may seem small on the scale of the energy system, some back of the envelope math estimates this worst-case scenario would reduce California’s annual solar production by 569 gigawatt-hours or $94,340,000 in retail sales at current production levels. This calculation is not even considering additional maintenance costs and efficiency reductions that analysts worry may be necessary if soot settles onto solar panels after leaving the atmosphere.

Of course, none of this is to argue against the increased adoption of solar generation in California. In fact, rapidly moving from a fossil fuel based economy to one based on renewable energy is the most important step in preventing future large forest fires as “the link between climate change and bigger fires is inextricable.” Additionally, advocates of distributed solar argue that increased residential solar adoption may help mitigate the stresses that forest fires place on the electric grid. Instead, this should be treated as another example of the costs of climate change and, consequently, fossil fuel use. Even with aggressive reductions in greenhouse gas emissions, forest fires will continue in the American West and soot will continue to harm solar efficiency. The best solution is for grid operators (like California ISO) and government planners (like the California Energy Commission) to understand the risks forest fires pose to solar generation and factor that into their long term (like the Annual Planning Renewable Net Short) and short term planning processes.


A Rising Tool in International Climate Litigation: The Right to Life

Jessamine De Ocampo, MJLST Staffer

There has been a growing national and international trend placing environmental rights and environmental justice under the umbrella of human rights. The empirical data around climate change is vastly shaping the international human rights arena, allowing environmental rights to be considered and litigated amongst human rights. As of 2019, air pollution is estimated to have resulted in and continues to result in 7 million yearly premature deaths worldwide; of which 600,000 are children under the age of 5. Entire communities, particularly island nations, are being forced to relocate due to rising sea levels while climate variability and changing weather is resulting in severe food crises threatening food security.

Climate and environmental issues have been actively permeating the international human rights field. The UN Human Right Council entered a mandate for an investigation into the correlation between human rights and environmental rights, the Inter-American Commission of Human Rights commissioned their first special rapporteur on Economic, Social, Cultural and Environmental Rights, and the UN Human Rights Committee in a General Comment, recognized the relevance of climate issues in the context of the right to life. The Right to Life is a universally recognized fundamental human right. While it can be found in a multitude of international and regional doctrines, it is primarily referenced in relation to Article 3 of the United Nation’s Universal Declaration of Human Rights and Article 6 of the International Covenant on Civil and Political Rights. The right to life doctrine essentially states that every person has a right, protected by law, to live.

In the international courts, climate litigation cases have been decided under the Right to Life doctrine with growing success. A Pakistani farmer sued his country for failing to implement environmental legislation and won; a family of rural workers sued their home country of Paraguay for failing to protect them from severe environmental contamination in which the court held “the link between environmental protection and human rights is ‘undeniable.’ ” Finally, in December 2019, the Dutch Supreme Court held that the Dutch government must reduce emissions immediately in line with its human rights obligations.

As climate change and environmental justice concerns continue to pose an ever-growing multi-layered effect on our societies, these new tools may prove to be crucial in implementing liability. As the link tying climate change and human rights becomes stronger, individuals have more than before to establish a claim. The right to life doctrine can, and should, be used to enforce government liability for failing to regulate the harmful effects of climate change.


Davos Attendees Seek Political Cover under 1 Trillion Trees

Noah Cozad, MJLST Staffer

At the World Economic Forum (otherwise known as Davos), the most popular subject was something called the Trillion Tree Initiative to help fight climate change. Nearly every attendee at the forum committed to the initiative. Including President Trump, who in the past has forcefully denied climate change’s existence, calling it a “hoax” invented by the Chinese. President Trump even mentioned the initiative in the State of the Union, and a GOP representative has introduced a bill that would commit the United States to planting 3.3 billion trees every year for the next 30 years. Davos describes the initiative as a “mass-scale nature restoration,” that hopes to provide up to one-third of the emission reductions necessary for the Paris Agreement targets. Practically, the initiative seeks to provide a single platform for a variety of reforestation projects and to mobilize funds and support.  This initiative was started by the UN as part of the New Decade of Ecosystem Restoration, 2021-2030. The UN says the initiative “is about, conserving, restoring, and growing trees. Indeed, the goal of 1 trillion trees by 2030 includes conservation of existing trees (i.e. avoided deforestation), the restoration and natural regeneration of previously degraded forest lands, including actual reforestation and tree-planting schemes on suitable agriculture land, . . . as well as urban tree planting.”

The idea of planting 1 trillion trees comes from a controversial 2019 article in Science. The article finds that global tree restoration is currently one of the most effective carbon drawdown solutions. Accordingly, planting 1 trillion trees has the potential to store 25% of the current atmospheric carbon pool. The study focuses on reforestation, as opposed to afforestation which is planting trees where none were before. Critics have argued that this is an unreliable way to fight climate change and is not a meaningful substitute for cutting back on emissions. Further, it is a very slow solution, for example it takes 25 years for a tree planting project to offset a single commercial flight.

While it is undeniable that planting large amounts of trees will help with climate change, there are still many issues with this idea. The initiative seems like a silver bullet, relatively apolitical, and very easy for people to grasp onto and understand (unlike climate change, which as a whole is extremely complex). But herein lies many of the problems. For one the initiative completely shifted the focus of Davos away from proven solutions like carbon taxes. While carbon taxes are difficult and very political, a trillion trees is a good way for banks and pension funds, that are financially exposed to fossil fuel companies for $1.4 trillion, to act as if they’re doing something. Further, simply planting tons of trees might be bad for an individual ecosystem. In fact the Coalition for Environmental Justice in India has had to ask Leonardo DiCaprio from going forward with a tree planting project as ecologists say the current plan will dry up rivers, harm the floodplains, destroy biodiversity, and eventually make the area uninhabitable for the trees in the first place. The UN itself has said that the project is NOT a silver bullet and should instead be one smaller part of a larger plan.

Perhaps the biggest issue is that the initiative provides political cover to those making climate change worse and distracts from better solutions. Absent other climate policies, the United States would need to plant an area over twice the size of Texas to offset emissions. Trees play a critical role in climate change, but the best way to utilize them is to protect current forests and let them grow back naturally. And the best way to do that is to provide protections for the indigenous peoples living there, according to University of Minnesota Natural Resources Professor Forrest Fleischman. Professor Fleischman stated, “people are getting caught up in the wrong solution. . . . Instead of the guy from Saleforce saying, ‘I’m going to put money into planting a trillion trees,’ I’d like him to go and say, ‘I’m going to put my money into helping indigenous people in the Amazon defend their lands.’. . . That’s going to have a greater impact.”

Overall, the Trillion Tree Initiative is a good start, but should not be allowed to provide political cover for those invested in fossil fuels, and climate deniers. For example, the folks at Davos continue to support President Bolsonaro of Brazil, who has rolled back protections of indigenous people and the Amazon, one of the world’s largest carbon sinks, thus allowing large swathes of the tropical forest to burn and the people who live there to be killed. The trillion tree initiative should not distract us from such actions that ultimately make climate change worse. Instead of one, simplistic solutions, we should push for multiple, better solutions such as protecting public lands, forests, and the rights of the indigenous peoples who live there and protect the environment, along with planting more trees.