Today in the United States, there is no federal comprehensive statute addressing climate change. With the Trump Administration now in power, it is doubtful that any such statute will be forthcoming anytime soon. Unfortunately, many corporations and the lawyers that advise them don’t know what to do in the absence of such regulation.
As an environmental lawyer with over 50 years in the business, I and many others have lived and practiced through the initial implementation and amendments to the Clean Air Act, the Clean Water Act, the hazardous waste laws, the Endangered Species Act and the National Environmental Policy Act. These are the environmental laws that we practitioners in the United States know and interpret.
For those subject to their provisions, they are not voluntary. They are required. They are regulatory. They can be harsh, but they also define the playing field.
By contrast, the situation with our societal response to climate change is different – totally different – and unlike any other area of modern environmental law. How should one act in the absence of regulation when there is a very real perceived need to act? How does one give legal advice in the absence of precedents, in the absence of rules?
Now to be clear, there are countless peripheral actions around climate change. The Commodity Futures Trading Commission has jurisdiction over derivatives that include carbon credits. The Securities and Exchange Commission has jurisdiction over certain disclosures. There are numerous lawsuits about the damage from climate change, and there is litigation regarding the representations that have been made about carbon neutrality and net zero emissions. There are shareholder actions, and there are countless bloggers and critics.
But the fact remains that there is no central federal climate statute and no central source of climate-related regulations. And with the overturning of Chevron deference, the likelihood of other related statutes being interpreted to give broad authority over climate has been reduced substantially.
Interestingly, as much as regulation is disdained and attacked, lawyers and their clients have difficulty making decisions in the absence of regulations. A global scientific and political consensus exists that we must achieve net zero emissions by 2050 if we are to have a chance at keeping global temperature increases below 2 degrees Centigrade. Most companies have decided to try to address this concern in some way. To do this, they must evaluate their Scope 1, 2 and 3 emissions, calculate their carbon footprint, and develop a plan for carbon reduction.
It is here that things become interesting. Are Scope 3 emissions included or not? Is it acceptable to capture and inject carbon dioxide underground and use it to produce more oil and gas and claim it as a climate response? Can carbon credit offsets or insets be used to achieve corporate goals? Must carbon offsets or insets provide additionality? Does a landowner have a property right to sell the carbon that is being captured, stored, and measured on their land each year?
These and many other problems will continue to vex lawyers and their clients for the coming years. One approach is to seek consensus on action – creating pseudo-regulations by agreement. However, such actions create boundaries where there are none, potentially stifling creativity which is sorely needed.
Another approach is to stress transparency and openness of thinking – open pursuit of creativity – open admission of the potential of error – bringing stakeholders and shareholders into the decision-making process.
We are living in different times than when our environmental laws emerged. Different times require different approaches, and lawyers as well as their clients must evolve or be left behind.
