Environment, Land & Resources

China to Expand Environmental Regulatory Authority

Posted in Air Quality and Climate Change, China, Water Quality and Supply

China’s Ministry of Environmental Protection’s increased authority over climate change and pollution control issues indicates a greater enforcement role for central government.

By Paul A. Davies and Andrew Westgate

The Chinese government has announced a major reorganization of China’s ministries that comprise the Chinese central government at a session of the 13th National People’s Congress in Beijing. The reorganization, which will reduce the number of ministries from 34 to 26, is intended to streamline and strengthen central government’s role in accordance with the principle of “comprehensively deepening reforms,” a key component of President Xi Jinping’s political program.

The Ministry of Environmental Protection (MEP) will be reconstituted as the Ministry of Ecology and Environment (MEE) as part of the reorganization. The MEE’s authority will expand to consolidate pollution-related responsibilities currently allocated among several other ministries, as well as assuming responsibility for climate change policy from the National Development and Reform Commission, a powerful economic planning agency which developed the national emissions trading system launched in late 2017. Specifically, MEE will expand its authority with respect to supervision and prevention of groundwater pollution, wastewater emission control, protection of rivers, non-point source agricultural runoff, protection of oceanic environments, environmental oversight for China’s massive South-North Water Transfer Project, and responsibility for climate change and emissions reduction policies. Continue Reading

China Plans New Energy Ministry to Replace the National Energy Administration

Posted in Air Quality and Climate Change, China, Power, Oil, Gas and Minerals

China’s new energy ministry demonstrates the country’s continued commitment to environmental protection and renewable energy.

By Paul A. Davies and Andrew Westgate

Recent comments from senior communist party leaders indicate that the Chinese government intends to establish a new Ministry of Energy to streamline and consolidate authority for energy-related issues. The responsibility for these issues is currently dispersed among a variety of other ministries. The new ministry will be responsible for managing sectors including electric power generation, oil and natural gas in a bid to improve the workings of government and policymaking in relation to energy. However, the full extent of the new ministry’s authority remains unclear, including whether it will have oversight of China’s state-owned oil companies. Continue Reading

The European Commission Signals a More Active Regulatory Role to Drive Green and Sustainable Investment

Posted in Green Finance

Recommendations signal a major shift for Europe’s financial system through both legislative and non-legislative changes.

By Paul A. Davies and Aaron E. Franklin

The European Commission (EC) has revealed its action plan for mobilizing the financial system to encourage a “greener and cleaner economy.”[1] The plan, which was released on 8 March, states that it aims to facilitate the following, in conjunction with the Paris Agreement and the EU’s sustainable development agenda: i) improvements in the financial system’s contributions to sustainable and inclusive growth, and ii) stronger financial stability by incorporating environmental, social, and governance (ESG) factors into investment decision-making. The inescapable takeaway is that the EC strongly encourages a more active regulatory role in the sustainable investments market, through both legislative and non-legislative changes. Continue Reading

New York Releases Offshore Wind Master Plan

Posted in Power, Oil, Gas and Minerals, Project Siting and Approval

Plan outlines next steps for procuring 2,400 MW by 2030, with a likely significant benefit for New York’s economic development.

By Tommy Beaudreau, Janice Schneider, Michael Gergen, and David Amerikaner

New York Governor Andrew Cuomo and the New York State Energy Research and Development Authority (NYSERDA) have released the New York State Offshore Wind Master Plan, an extensive document that highlights the state’s progress on offshore wind development while charting an ambitious path forward. The plan is designed to help meet the Governor’s previously announced goal of procuring 2,400 megawatts (MW) of offshore wind energy by 2030. The offshore wind goal is part of an overall strategy to generate at least 50% of New York’s electricity from renewables by 2030, as previously covered in this blog. Continue Reading

Why Green Bond Issuers and Underwriters Should Not be Deterred by US Securities Law

Posted in Green Finance

By Aaron Franklin

The United States has the deepest, most liquid capital markets in the world, attracting issuers from across the globe. To sell to US investors, these issuers must comply with US securities laws, entailing a more rigorous diligence and disclosure process. Issuers must weigh the benefits of increased demand against the additional costs, but the outcome should not depend on whether the bonds will be green or otherwise have sustainability credentials.

The US securities laws that apply to bond deals include a variety of rules on who can issue and purchase bonds, such as the registration requirements in the Securities Act of 1933, the Trust Indenture Act of 1939, and the Investment Company Act of 1940. But the real concern for bond issuers and underwriters is the threat of investors claiming securities fraud under the Securities Exchange Act of 1934, using “Rule 10b-5.” In general, a plaintiff is entitled to damages under Rule 10b-5 if a bond issuer or underwriter misrepresented or omitted a material fact in connection with the purchase or sale of the bond, with the intent to deceive or with recklessness, and the plaintiff lost money by relying on that misrepresentation or omission. This right to litigate for “material omissions” does not exist in most other jurisdictions, even where contractual fraud claims are possible. To avoid lawsuits under Rule 10b-5, issuers and underwriters (and their legal counsel) typically spend more time and effort (relative to deals not sold to US investors) investigating the affairs of the issuer and ensuring the offering disclosure is sufficiently robust.

Continue Reading

CEQA Developments: How New Proposed Regulations and Streamlined Legislation Will Impact California Projects

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

Webcast addresses recent developments involving the California Environment Quality Act.

By Marc Campopiano, Chris Garrett, and Winston Stromberg

The Project Siting & Approvals Practice hosted a 60-minute webcast on February 21, “CEQA Developments: How New Proposed Regulations and Streamlined Legislation Will Impact California Projects.” Speakers provided an overview of the proposed updates to the California Environmental Quality Act (CEQA) Guidelines, the implications of new proposed legislation to streamline CEQA (including S.B. 827), and the impact of the California Air Resources Board’s Scoping Plan on CEQA.

View the webcast or download the presentation slides on-demand by registering here.

Federal Judge Enjoins California’s Proposition 65 Cancer Warning for Glyphosate As “Misleading”

Posted in California, Chemical Regulation, Environmental Litigation

By Richard P. Bress, Philip J. Perry, Andrew D. Prins, Ryan Baasch and Alexandra Shechtel

On February 26, for the first time ever, a federal district court has enjoined a California Proposition 65 warning requirement on First Amendment grounds. Under California’s Safe Drinking Water and Toxic Enforcement Act of 1986 — colloquially known as “Proposition 65” — the State listed the herbicide glyphosate, the most widely used herbicide in the world, as a chemical “known” to the State to cause cancer. California automatically listed glyphosate as a known carcinogen upon the finding by one organization, the International Agency for Research on Cancer (IARC), that glyphosate is “probably” a human carcinogen — despite contrary findings by virtually every other regulatory or research authority worldwide that has studied the question. Based on this listing, Proposition 65 requires that businesses provide a “clear and reasonable” warning to consumers before exposing them to glyphosate or products containing glyphosate. California’s regulations state that “[t]he message must clearly communicate that the chemical in question is known to the state to cause cancer.” This warning requirement for glyphosate was scheduled to take effect on July 7, 2018.

On behalf of a nationwide coalition of agricultural and business interests, Latham & Watkins filed suit against certain California officials in the United States District Court for the Eastern District of California, arguing, among other points, that the Proposition 65 warning requirement for glyphosate violates the plaintiffs’ First Amendment rights. U.S. District Judge Shubb issued a preliminary injunction prohibiting the State and anyone acting in privity or concert with the State from enforcing the glyphosate warning requirement. See Nat’l Ass’n of Wheat Growers et. al. v. Zeise et. al., No: 2:17-2401-WBS-EFB (Opinion dated Feb. 26, 2018).

Judge Shubb found that the compelled warning regarding glyphosate likely violates the plaintiffs’ First Amendment rights. The court explained that the warning is impermissible because “[i]t is inherently misleading for a warning to state that a chemical is known to the state of California to cause cancer based on the finding of one organization … when apparently all other regulatory and governmental bodies have found the opposite, including the EPA.” In other words, the warning does not pass muster under First Amendment analysis because, “given the heavy weight of evidence in the record that glyphosate is not in fact known to cause cancer, the required warning is factually inaccurate and controversial.” A reasonable consumer would not understand a substance to be “known to cause cancer,” as the warning must state, “where only one health organization had found that the substance in question causes cancer and virtually all other government agencies and health organizations that have reviewed studies on the chemical had found there was no evidence that it caused cancer.” Further, the court explained, “[p]roviding misleading or false labels to consumers also undermines California’s interest in accurately informing its citizens of health risks at the expense of plaintiffs’ First Amendment rights.” Therefore, the court preliminarily enjoined the warning requirement as to glyphosate.

Diesel Ban Poised to Cut Pollution in German Cities

Posted in Air Quality and Climate Change

German cities face driving bans for diesel passenger cars in order to meet European Union air quality limit values.

By Joern Kassow

The German Federal Administrative Court recently made a fundamental ruling stating that diesel driving bans are generally admissible. German cities may consider general off-limit areas for diesel fueled cars, as well as partial driving bans on certain heavily used streets.

Currently, approximately 70 German cities do not meet the EU’s nitrogen dioxide air quality limit values. To tackle this issue, the driving bans shall provide for better air quality through a reduction of nitrogen dioxide pollution.

In two rulings dated 27 February 2018 (file numbers 7 C 26.16 and 7 C 30.17), the German Federal Administrative Court established the legitimacy of diesel driving bans within narrow confines. Namely, a driving ban must be the only appropriate measure to keep the exceedance period of the nitrogen dioxide air quality limit values as short as possible.

The Federal Administrative Court clarified that, according to German federal law, a driving ban decree specifically for diesel fueled cars would normally be inadmissible. However, the principal of the primacy of application of EU law requires compliance with the EU’s air quality limit values as soon as possible. Consequently, German federal law must be set aside as far as it prevents the decree of driving bans, if a driving ban is the only appropriate measure to best limit the exceedance period of the nitrogen dioxide air quality limit values.

For this purpose, however, the court sets certain guidelines for implementing driving bans to achieve this purpose, especially regarding the proportionality principle. Therefore, German cities must contemplate a phased introduction of driving bans, initially addressing older vehicles only. Vehicles that comply with the Euro 5 emission standard may not be subject to driving bans before 1 September 2019. In addition, sufficient exemptions are necessary, for example for tradespeople, as well as for certain residents.

To what extent the affected cities are now willing (and required) to implement diesel driving bans shortly, in order to meet the European nitrogen dioxide air quality limit values, remains unclear. However, observers view this ruling as an important step in cleaning up air quality in German cities.

Proposed CEQA Guidelines Amendments Proceed Through Rulemaking Process

Posted in California, CEQA

Proposed changes include shifting the methodology for studying projects’ potential traffic impacts and clarifying the terms for deferred mitigation measures.

By Marc Campopiano, Winston Stromberg, and Samantha Seikkula

The California Natural Resources Agency (the Agency) has given notice that it intends to revise many of the regulations implementing the California Environmental Quality Act (the CEQA Guidelines). If adopted, the proposed rulemaking package would represent the most substantial amendments to the CEQA Guidelines in 20 years. The most significant proposed change shifts the methodology for studying projects’ potential traffic impacts and mitigation measures under CEQA. Continue Reading