On April 2, the US Supreme Court issued what some are calling a “watershed decision” concerning carbon dioxide and other so-called “greenhouse gas” emission limits for new automobiles. The decision is far-reaching because it is the first time the court has ruled that carbon dioxide, methane, and other greenhouse gases are subject to regulation under the federal Clean Air Act.
Bill Bumpers, head of Baker Botts’ global climate change practice group and an authority on climate change issues, met recently with reporters in Houston to explain the legal, economic, and environmental implications of the ruling, which forces the Environmental Protection Agency to set new emission limits for vehicles and has broader ramifications as well.
If the EPA doesn’t set new standards within one year that include CO2 emissions, states and environmental groups can now sue the agency. “And the EPA will probably lose,” said Bumpers.
By adding CO2 to the list of emissions covered by the Clean Air Act, many companies will find it more difficult to get permits - refiners, for instance.
“The court basically came down on the side of the large majority of scientists who agree than CO2 is contributing to climate change,” said Bumpers.
Scientific American editor Christopher Mims noted in its online edition that, “The court declared, in effect, that these cities and states [who sued the EPA] were in some way potentially injured by the actions of the EPA - essentially an admission that the court believes that anthropogenic global warming is at least a possibility.”
The Supreme Court decision may embolden Congress to pass additional legislation to further cap greenhouse gas emissions from all sources. In fact, several oil companies - most notably BP - have endorsed these curbs. President Bush called the matter “settled” and said his administration would take a long look at its current policies.
Critics say that science is still inconclusive about the role of CO2 and other greenhouse gases as a factor in climate change. Others warn that the court ruling is a de-facto acceptance of the Kyoto Protocol, which the US has yet to ratify.
The business community widely believes that the interests of the United States and other Western nations will be harmed by the Kyoto treaty, which exempts developing nations from its provisions while forcing the US and others to comply.
“The ruling is a cultural awakening for Joe Six-Pack as well as the CEO, who are now recognizing that [climate change] is a serious issue that needs to be addressed,” said Bumpers. “They’re starting to ask how they can deal with this, and how can they make it work economically. Many of my clients are hedge funds and other funds, and they are asking me - ‘Where do I put my money.’”
Bumpers added, “If companies just dig in their heels and say ‘no,’ they won’t have any say into how this is structured. The flip side is that this will create an economic boom. It costs, but it’s also going to be a stimulus. It IS going to happen, so we need to address it.”
Don Stowers
Editor-OGFJ
