Environment, Land & Resources

TCI Releases Framework for Draft Policy to Reduce GHG Emissions From Transportation

Posted in Air Quality and Climate Change, Environmental Regulation

Under the TCI program, fuel suppliers would be required to hold allowances to cover their reported emissions.

By Jean-Philippe Brisson, Joshua T. Bledsoe, and Benjamin W. Einhouse

The Transportation & Climate Initiative (TCI), a regional collaboration of Northeast and Mid-Atlantic states and the District of Columbia, has advanced its program to reduce greenhouse gas (GHG) emissions from the combustion of transportation fuels. On October 1, 2019, TCI published a Framework for a Draft Regional Policy Proposal (the Policy Proposal).

This blog post reviews the presentation of the TCI program’s key design elements and summarizes key stakeholder comments on the Policy Proposal. Continue Reading

Air District Targets Southern California Logistics Industry

Posted in Air Quality and Climate Change, California, CEQA, Environmental Regulation, Project Siting and Approval

A local air district is developing a rule that would require both existing and proposed warehouses to reduce trucking emissions or pay a mitigation fee.

By Joshua T. Bledsoe

The South Coast Air Quality Management District (SCAQMD or District) is developing a so-called Indirect Source Rule (ISR) that would require Southern California warehouses to reduce emissions associated with trucking activity and on-site equipment. Proposed Rule 2305, recently released by the District in discussion draft form, would establish the Warehouse Actions and Investments to Reduce Emissions (WAIRE) Program — which would apply to owners and operators of warehouses located in the South Coast Air Basin (Basin) with greater than 100,000 square feet of indoor space in a single building. If the SCAQMD’s development timeline holds, Proposed Rule 2305 will phase in on July 1, 2020. Continue Reading

Satisfying ‘Daubert’ in Environmental Toxic Tort Litigation

Posted in Environmental Litigation

Recent decisions have excluded plaintiffs’ expert opinions that fail to estimate actual exposure and prove it was sufficient to cause injury.

By Christine G. Rolph and Laura J. Glickman

Recent federal court rulings in toxic tort litigations have stressed the importance of the dose-response relationship and the need to carefully evaluate the level of exposure to pass the Daubert standard for expert witness admissibility under the Federal Rules of Evidence 702. Under the Daubert standard, courts must assess whether the reasoning or methodology underlying the expert testimony is scientifically valid and whether those reasons or methodologies can be properly applied to the facts at issue. Dose-response methodology studies the relationship between the quantity of a substance (dose) and its overall effect (response) on a person, and is “the hallmark of basic toxicology.”[1] The courts continue to scrutinize experts’ dose-response analysis to determine the reliability of that testimony on specific causation. The following three cases highlight the importance of a thorough dose-response analysis in any expert opinion that evaluates a plaintiff’s exposure and harm. Continue Reading

New Multi-Target French Climate Energy Package Boosts Objectives

Posted in Air Quality and Climate Change, Environmental Regulation, European Environmental and Public Law

The legislation includes six key measures to cut greenhouse gas emissions and to reach carbon neutrality by 2050.

By Paul A. Davies and Michael D. Green

The French Parliament has adopted a new climate energy package to tackle the effects of climate change and boost France’s energy transition endeavors to reach carbon neutrality by 2050. As per Article 4.1 of the 2015 Paris Agreement, carbon neutrality is defined in the package as the balance, across the national territory, between anthropic emissions by sources and removal of greenhouse gases by sinks. Six key goals comprise this latest legislation. Continue Reading

Council of EU Adopts ESG Disclosure and Benchmarks Legislation

Posted in Green Finance

The formal adoption reflects the EU’s acknowledgement that a robust system of sustainable finance will be essential to the proposed capital markets union.

By Paul A. Davies and Michael D. Green

On 8 November 2019, the Council of the EU published a press release announcing the adoption of legislative reforms that aim to enhance the proposed capital markets union. Notably, two of the reforms are related to sustainable finance: the Low Carbon Benchmark Regulation (LCBR), and the Disclosure Regulation, the full texts of which were published on 24 October 2019.

LCBR

The LCBR amends the previous Benchmarks Regulation, and was introduced in response to the perceived lack of uniformity among existing low-carbon indices. This inconsistency was considered to be unsatisfactory, as investors were unable to use benchmarks as reliable and easy tools to compare the low-carbon attributes of investments and portfolios.

To combat these issues, the LCBR introduces the following:

  • A new category of benchmarks, comprising two types of financial benchmark: an EU climate transition benchmark, and a “Paris-aligned” benchmark that brings investment portfolios in line with the Paris Agreement. Administrators for these benchmarks will have to publish detailed information on whether or not, and to what extent, the benchmarks ensure a degree of overall alignment with the target of reducing carbon emissions or the attainment of the objectives of the Paris Agreement is ensured.
  • An obligation for all benchmarks (with the exception of those related to interest rates and foreign exchange) to disclose in their benchmark statement whether or not their benchmarks pursue environmental, social, and corporate governance (ESG) objectives, and whether or not the benchmark administrator offers such ESG-focused benchmarks.
  • An extension of the transition regime under the Benchmarks Regulation to 2021, for critical and third-country benchmarks.

Moving forward, the LCBR empowers the European Commission to lay down the specific minimum standards for the two new benchmarks. These standards will specify the criteria for the choice of underlying assets, the weighting of those underlying assets, and the trajectory for the decarbonisation of the climate transition benchmark, as well as determining the method for the calculation of the carbon emissions associated with the underlying assets. In completing this task, the Commission will take into account the work of the Technical Expert Group on Sustainable Finance, which published a final report on the climate-related benchmarks introduced by the LCBR on 30 September 2019. (See EU Issues Final Report on Climate Benchmarks and ESG Disclosures).

Administrators who seek to provide either of the two new benchmarks will need to comply with the LCBR by 30 April 2020.

Disclosure Regulation

The Disclosure Regulation governs ESG disclosure requirements for financial market participants and financial advisers, and how those firms integrate ESG factors into their investment decisions. (See EU Issues New Sustainable Investment Disclosure Rules). The next step is for European supervisory authorities to come up with specific and detailed rules for the implementation of the Disclosure Regulation, for which they are expected to begin the consultation process in early 2020.

Conclusion

The adoption of the LCBR and the Disclosure Regulation demonstrates the EU’s continuing interest in sustainable finance and its acknowledgement that a robust system of sustainable finance will be an essential part of the capital markets union. The effectiveness of the new regulations remains to be seen, and may be dependent on the technical input to be provided by the Commission in the near future.

Latham & Watkins will continue to follow and report on developments in this area.

This post was prepared with the assistance of James Bee in the London office of Latham & Watkins.

German Court Dismisses Farmers’ Climate Protection Claim

Posted in Environmental Litigation

The court argued that the German government’s 2014 decision on climate protection goals for 2020 was not legally binding.

By Jörn Kassow

On 31 October 2019, the Administrative Court of Berlin dismissed a climate lawsuit brought by German citizens against the government. The plaintiffs had alleged that the government was violating their rights by missing certain climate protection targets.

In 2014, the German government adopted its climate protection goals for 2020, which aimed at a reduction of greenhouse gas (GHG) emissions by 40% (compared to 1990). However, the government now estimates that Germany will only be able to reduce emissions by 32%. Furthermore, Germany will probably not achieve the 14% reduction of GHGs which are not covered by the European Union Emissions Trading System (EU ETS), as required under the so-called Effort Sharing Decision, without credits from emission-reduction projects in third countries. Continue Reading

UK Releases New Details on Net Zero Target Measures

Posted in Environmental Regulation

The announcements signal how both the Net Zero Review and the IETF will impact the UK’s transition to net zero.

By Paul Davies and Michael Green

On 2 November 2019, the UK government announced further details on two initiatives focused on helping the UK reach net zero greenhouse gas emissions by 2050. The first of these measures, HM Treasury’s Net Zero Review (Review), will consider how the UK should fund efforts to meet its net zero target. The second measure, the proposed Industrial Energy Transformation Fund (IETF), aims to help energy-intensive industries reduce their carbon emissions. New details surrounding the proposed measures signal how both the Review and the IETF will impact the UK’s transition to net zero. Continue Reading

EU and Countries Worldwide Coordinate to Harmonize Rules on Green Financing

Posted in Green Finance

The launch of the International Platform on Sustainable Finance indicates an increased focus on a globalized approach to coordinating sustainable finance.

By Paul Davies and Michael D. Green

On October 18, 2019, the EU, China, India, and five other countries combined to launch the International Platform on Sustainable Finance (IPSF). Acknowledging the role that private capital has to play in scaling up sustainable investment worldwide, the IPSF seeks to provide a platform to increase private-sector funding in this area. This blog post will consider in more detail the IPSF’s aims, as well as the ways in which the IPSF intends to achieve them. Continue Reading

UK Government Outlines New Powers and Regulations in Environment Bill

Posted in Environmental Regulation, European Environmental and Public Law

The Bill proposes a post-Brexit system of environmental governance to oversee new powers and regulations in four environmental law areas.

By Paul A. Davies and Michael D. Green

On 15 October 2019, the UK government published the final draft of Environment Bill 2019–20 (the Bill), which aims to set out the government’s environmental priorities post-Brexit. The Bill covers a broad range of topics ― from air quality to England’s future environmental governance — and gives a legal footing to several policy commitments that the government has made in recent years. This blog post will consider the Bill’s content, and the potential impact that the Bill may have on environmental regulation in England. Continue Reading

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