ENVIRONMENTAL LAW SEMINAR: ENERGY POLICY AND CLIMATE CHANGE Means and Miller Wednesdays, 6:30-8:30 January 14 April 8 (No Class March 18) INSTRUCTORS

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1 University of Maryland School of Law Spring Semester 2008 ENVIRONMENTAL LAW SEMINAR: ENERGY POLICY AND CLIMATE CHANGE Means and Miller Wednesdays, 6:30-8:30 January 14 April 8 (No Class March 18) The focus of this course is the legal response to anthropogenic -- human-caused -- global warming. Merely to describe that focus already is to take sides on what are still debated issues. It assumes that humans are changing the climate and that the potential consequences of the change merit a legal response. The course examines those assumptions and the existing and proposed legal actions that rest on them. INSTRUCTORS Robert Means is a consultant in domestic and international energy issues. He currently serves as electricity advisor to the State Department s Iraq desk. He also teaches a course in climate change in the Environmental Science and Policy masters program of Johns Hopkins University and has taught courses in energy law and policy at the University of Texas. Contact information: (W) (H) MeansRC@state.gov (W) Robert.means@starpower.net (H) Alan Miller is a Principal Projects Officer with the International Finance Corporation, the private sector arm of the World Bank. His primary responsibilities include coordination of environmental finance projects and climate change policies. He co-teaches a course on Energy, Development and Climate Change at Vermont Law School and is the co-author of an environmental law textbook (with Professor Percival). Contact information: amiller2@ifc.org ASSIGNMENTS AND COURSE MATERIALS Assignments will be posted on Blackboard; assignments for the first two classes are being posted along with this syllabus. All assigned readings will be available on the web or will be distributed electronically or in class. 1

2 GRADING Grades will be based on two papers, class participation and an in-class final examination. The approximate weighting of the three components is: Papers: 40% Class participation 10% Final examination: 50% OVERVIEW OF THE COURSE The course is divided into four parts. Part I looks at scientific, technical and economic issues: the causes of global warming and the projections of future warming and its consequences; the technical alternatives for responding to climate change; and possible criteria for deciding how (if at all) these alternatives should be deployed. These issues provide the background for the legal issues discussed in the remainder of the course. Parts II and III deal with existing rules and institutions. Part II looks at international institutions and the implementation of the Kyoto Protocol. Part III looks at federal and state legislation in the United States. Part IV looks to the future. It deals with two topics that parallel Parts II and III: internationally, alternatives to replace Kyoto on its effective expiration in 2012; domestically, potential national climate change legislation. SYLLABUS Part I. Background for the Legal Issues Classes 1 and 2 (January 14 and 21) The topics discussed in these classes fall into two broad categories: defining the problem, and assessing potential responses. Defining the problem: The causes of global warming. The earth is growing warmer because it is receiving more energy from the sun than it is radiating back into space. That imbalance is in turn the result of a second imbalance: Emissions of CO 2 and other heat-trapping gases (greenhouse gases) exceed the absorption of those gases by plants and the ocean. Future warming. Future warming depends partly on climate science. There is uncertainty regarding some elements of that science, particularly the role of clouds. However, the largest source of uncertainty is human actions. How fast 2

3 will the world s populations and economies grow? What technological changes will occur in the supply and use of energy? What actions (if any) will be taken to limit greenhouse gas emissions? Consequences of the projected future warming. Warming itself may be a serious problem in some regions, but the most serious consequences are likely to be changes such rising sea levels that are themselves a consequence of the warming. Assessing potential responses: There are two (not mutually exclusive) potential responses to global warming. One is adaptation, for example, building dikes to protect against a rising sea level. The other is mitigation, which refers to responses intended to reduce future warming. This course will focus almost entirely on mitigation. This is not because adaptation is unimportant. Significant additional warming is now almost inevitable, and for that warming, adaptation is the only possible response. However, the legal issues related to global warming are almost entirely concerned with mitigation. PART II THE INTERNATIONAL FRAMEWORK Classes 3-5 (January 28 through February 11) 1. The negotiating process and the operation of modern multilateral environmental agreements There are dozens of international environmental agreements covering subjects as diverse as biodiversity conservation, disposal of toxic wastes, and protection of the ozone layer. The process by which these agreements are negotiated has become far more open and public in recent decades, frequently including publication of an unofficial daily newspaper the Earth Negotiation Bulleting. Similarly, key structural features have evolved over time and typically include periodic meetings, working groups called subsidiary bodies, a secretariat, and provisions for addressing technical issues in annexes and amendment through protocols. In this class we will review the process by which multilateral environmental agreements are negotiated and implemented as the context for discussing the current status and possible future of the Kyoto Protocol, with some historical reference to earlier experience with the 1987 Montreal Protocol providing for protection of the ozone layer. 2. The UN Framework Convention on Climate Change (UNFCCC) and Kyoto Protocol Most discussion of the Kyoto Protocol focuses on only a few features the emission reduction targets applicable to developing country signatories and the mechanisms, provisions that allow trading of emission reduction obligations by countries or 3

4 through projects in developing countries. In reality the Convention and its associated Protocol have multiple provisions of continuing importance including requirements for national reporting, a system for financing greenhouse gas reduction projects in developing countries, two different forms of carbon trading ( joint implementation and the Clean Development Mechanism or CDM), and procedures for amendment, ratification, and enforcement. In this class we review the Convention and Protocol as living documents and begin an introduction to some of the issues with respect to its effectiveness and appropriateness as the basis for any future climate regime. 3. Carbon trading -- an introduction and overview The first significant use of trading as the basis for achieving environmental objectives is generally considered to have been in the acid rain program included in the Clean Air Amendments of 1990, concurrent with the negotiations that resulted in the UNFCCC. The concept was included in the UNFCCC but took on much greater significance in the Kyoto Protocol. Carbon trading now takes place within the EU, in projects under the CDM, and as voluntary offsets purchased by consumers worldwide. Maryland is one of a growing number of states to have introduced trading programs in the US in recent years. In this class we will do an overview of the carbon market in its different forms and introduce some of the issues about its effectiveness and future. PART III. THE EXISTING LEGAL FRAMEWORK IN THE UNITED STATES Classes 6-9 (February 18 through March 11) Electricity generation and transportation account for more than 70% of U.S. CO 2 emissions. Part III focuses on measures for reducing emissions from those sectors. It deals with three topics: Technical alternatives. Part I surveyed the technical alternatives for reducing greenhouse gas emissions. Part III looks in more detail at the alternatives for reducing emissions from electricity generation and transportation. These alternatives are of two kinds: ones that reduce the amount of energy consumed in producing an output, such as a kilowatt-hour of electricity (energy intensity) and ones that reduce the emissions of greenhouse gases (primarily CO 2 ) from using the energy (carbon intensity). Kinds of legal rules: Legal rules do not reduce greenhouse gas emissions. Their role is to promote the deployment of technical alternatives that can achieve that reduction. Two general kinds of legal rule play an important role in existing or proposed climate change policies: 4

5 o Ones that directly changes the cost or price relationship between alternative courses of action by subsidizing the favored action or penalizing the disfavored one. o Ones that impose volumetric requirements. These requirements can require a certain volume of favored actions (such as generating electricity with renewables) or a certain reduction in the volume of disfavored actions (such as emissions of CO 2 ). Legal rules now used in the United States. Table 1 gives current U.S examples of the kinds of legal rule set out in the preceding point. As the table notes, in the area of climate policy there appear to be no current U.S. example of legal rules that directly penalize disfavored actions. A carbon tax would be such a rule, but there is no realistic prospect of the United States enacting one in the foreseeable future. A carbon tax will be discussed in Part III, but as a point of comparison for the kinds of legal rules that are in fact being used or seriously proposed. Table 1. Kinds of Climate-Related Legal Rules Favored Actions Cost and Price Tax subsidies for wind power & biofuels Volumetric Renewable Portfolio Standard Disfavored Actions No current examples Cap-and Trade PART IV. THE FUTURE Classes (March 25 through April 8) 1 Part IV will consider possible changes in climate-related legal rules over the next four years. Domestically, President Obama will complete his present term at the beginning of 2013; internationally, the emissions limits that developed countries accepted in the Kyoto Protocol then will no longer apply. These two events define Part IV s focus: the Obama administration s climate proposals, and the negotiations to fashion a successor to Kyoto. 1 Class 13 (Apri115) is reserved for review and for carry-over from earlier classes. 5

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