Vehicle emissions case promises broad impact

A Supreme Court ruling could affect voluntary efforts to reduce greenhouse gas emissions, according to Mike Spear, editor at large, in his monthly End Point column.

By Mike Spear, editor at large

Late November 2006, the U.S. Supreme Court started hearing arguments in the appeal brought by 12 states and several environmental groups against the U.S. Circuit Court’s upholding of the refusal by the U.S. Environmental Protection Agency (EPA) to regulate the amount of carbon dioxide emitted from vehicles.

The case dates back to 1999, when environmental groups first argued that the Clean Air Act required the EPA to regulate CO2 as a pollutant, along with other greenhouse gases. In 2003 the agency rejected that point of view, and now the Supreme Court’s ruling — not expected until later in the year — is awaited with as much interest, if not trepidation, by the chemical industry as it is by automobile manufacturers. If the ruling goes against the EPA, then efforts to control CO2 emissions could hinge on federal regulation rather than the voluntary reductions now being put in place by a growing number of companies.

An excellent example of such industry initiatives is the work that the bioplastics producer NatureWorks, Minnetonka, Minn., has put into its manufacturing site in Blair, Neb. (see the “green technology” article), which includes a 140,000-metric ton/yr polylactic acid unit and the world’s largest (182,000-metric tons/yr) lactic acid plant. By buying renewable energy certificates (RECs) to offset emissions from its production processes as well as from its corporate offices, the company claims it’s making the first commercially available greenhouse-gas-neutral polymer in the industry.

Instead of buying “green” power directly from generators — an option clearly not open to all, if only for geographical reasons — companies purchasing RECs needn’t switch from their usual power supplier and can buy as few or as many certificates as wanted. In NatureWorks’ case, the amount of energy covered by its certificates is 59,000 MWh/yr. This makes it one of the top 10 corporate buyers of RECs in the U.S., a roster that includes such disparate companies as Starbucks, IBM and Johnson & Johnson.

As a partner in the Green Power Market Development Group, set up by the World Resources Institute (WRI), Washington, D.C., NatureWorks researched a number of alternative energy sources before opting to buy RECs from a variety of power projects in the Midwest, including wind, hydro and solar facilities in Nebraska, Iowa, Minnesota, and North and South Dakota. The voluntary efforts of the WRI and its green power group have now spread to Europe, “to explore new renewable projects that complement progressive EU policies on renewables,” says WRI president Jonathan Lash.

Meanwhile, a novel twist for spurring the spread of voluntary greenhouse gas (GHG) trading systems in the U.S. was recently put forward by Kirsten Engel, a law professor at the University of Arizona, who formerly was with the EPA’s Office of General Counsel. She argues that the courts, in ruling on climate change lawsuits, “should allow defendants to comply with greenhouse gas abatement orders through the use of tradeable emissions offsets.”

For example, instead of ordering direct reductions in emissions, a court could require companies to purchase credits through the Chicago Climate Exchange (CCX), a voluntary market for trading GHG emissions allowances. CCX members, consisting of a cross-section of major public- and private-sector companies and organizations (including WRI), make a legally binding commitment to reduce GHG emissions by applying a “cap and trade” principle. Engel suggests that court-ordered purchases of emissions credits could help stimulate the creation of a much wider national U.S. carbon-trading system.

Many states and environmentalists are filing suits to pressure government to implement a federal GHG emissions-control program. These suits’ fate in part hangs on the outcome of the current Supreme Court case. If the EPA’s position is upheld, legal experts say it could undermine the plaintiffs’ standing in other climate change cases.

It would be ironic if, by not wanting to regulate CO2 emissions, the EPA were to become an unwitting agent in thwarting such a novel approach to increasing voluntary reduction efforts.

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