What are the legal pathways to reducing carbon emissions? On this episode of Columbia Energy Exchange, host Jason Bordoff is joined by Michael Gerrard, Founder and Director of the Sabin Center for Climate Change Law at Columbia University. Michael Gerrard is a professor of environmental law, climate change law, and energy regulation, and a member and former Chair of the Faculty of the Earth Institute at Columbia. He is the author and editor of more than a dozen books, two of which were named Best Law Book of the Year by the Association of American Publishers. His latest effort, “Legal Pathways to Decarbonization in the United States,” is an extensive policy encyclopedia that presents a menu of recommendations for policymakers, the legal community, and students to enable and accelerate decarbonization in the U.S.
In a wide-ranging conversation, they discuss the playbook of legal options available to cut emissions and tackle the challenge of climate change - from fuel-switching to carbon capture, carbon pricing and identifying emission reduction pathways in trade and tax policy, they dissect policy recommendations for moving the U.S. toward a 2-degree pathway in order to meet the goals of the Paris Agreement on climate change.
Jason Bordoff: Hello and welcome to Columbia Energy Exchange. A weekly podcast from the Center on Global Energy Policy at Columbia University. I’m Jason Bordoff and our guest today is my friend and colleague, Michael Gerrad. One of the leading environmental law faculty in the United States. He’s the Founder and Director of the Sabin Center for Climate Change Law here at Columbia University. Highly regarded professor of environmental law. He’s the author and editor of over a dozen books two of which were named best law book of the year by the Association of American Publishers. And in his later ______ [00:00:36], he’s co-edited, “Legal pathways to decarburization in the United States.” We’ve often had authors on this podcast to talk about their books and I have read every one of those books cover to cover and I’m ashamed to admit that I have not yet read cover to cover, although, I’ve read a decent amount of it, this massive tone, this policy encyclopedia which I suspect, he’ll tell us was not really designed to be read cover to cover. But it presents a menu of recommendations for policy makers, for the legal community, for students, for lawyers to think about the tools they have to enable and accelerate deep decarbonization in the United States. So, that’s what I’m going to talk about today. Michael, thanks for joining us on Columbia Energy Exchange.
Michael Gerrard: Thank you Jason and I’m shocked that 1200 pages of fine print, you haven’t gotten through quite yet.
Jason Bordoff: Not quite yet. We can hear, for podcast listeners, you can hear it drop on the table. It is a significant piece of work and an incredibly valuable piece of work. So, you know, the challenges with achieving deep decarburization, we think about political economy, how do you get things done in Washington. The sense that we kind of know what we need to do with existing regulations. President Obama pursued a set of executive things he could do with executive authority and then the things we want to try to get congress to do like put a price on carbon, cap and trade. So, why do we need 1200 pages to sort of identify what the legal tools are that we have to deal with this problem.
Michael Gerrard: And as you said, it’s well known what the broad strokes are. What’s necessary but we wanted to get into the real nitty-gritty. We started with a report that was done about five years ago by the sustainable development solutions network which is affiliated with the Columbia and with a group in Paris called ______ [00:02:19] that mapped out for 16 major economies. What are the pathways that they can all be on for deep decarburization. John ______ [00:02:29] professor at Widener University Law School in Pennsylvania and I then ask the question, how does U.S. law need to change in order for the U.S. to be on this pathway? And we decided that it was necessary to take a deep dive and understand really not only in a macro sense that we need more renewable and so forth. But what are each of the legal tools that are necessary in order to make it happen.
Jason Bordoff: And talk about in high levels, it means a long list in this book but when you think about it, what are the key policy tools and levers that we have that we need to be focusing on?
Michael Gerrard: Well, there are three pillars that are identified in the technical reports, energy efficiency. Decarburizing the electricity supply so that we are no longer using fossil at least without CCS. And electrification of as many uses as we can. So, those are the three broad elements of it with all of them carbon price would be very helpful. But it is not nearly enough. There is a lot of obstacles that stand in the way and one of the major things we looked at is how do we clear away the obstacles? How do we make it all happen faster and more smoothly?
Jason Bordoff: How do you think about federal, state and local when you’re thinking about this broad suite of policy tools?
Michael Gerrard: So, we looked at the federal level. We looked at state level. We looked at local levels. We looked at private governance and there is a rule for every one of those. The book also has a hundred page index of all the recommendations organized by actors. So, if you want to know what state public utility commissions can do, you will see a list of things for those and city councils and congress and so forth. So, every level of government and both the legislator and executive branches have considerable roles here.
Jason Bordoff: Let’s just, I want to come back to, what we just did work review, central global energy policy and the Sabin Energy on interactions between carbon pricing and regulatory tools and that comes up obviously with a question of federal and state and local. So, how do you think about the interactions between those things? I mean, is it necessarily the case that the more of the things you can do in this tone, the better or is there a certain way to think about once you’ve done a couple of these, maybe the others would be duplicative and unnecessary and how should we think about that?
Michael Gerrard: There are some things that would ideally be done at the federal level if we had a federal government that was able to doing that kind of thing. Carbon pricing is the first amongst all these example of that. But there are a lots of other issues with prohibiting and siting and so forth where if the federal government won’t act then the states and municipalities often can. And there are other areas where it really is most naturally a matter of local authority for example building codes and traditionally a matter of local authority. But building codes are central to energy efficiency and so we’re going to be working on model building codes that would be adopted by cities across the country, we hope.
Jason Bordoff: And what’s the, so just stay with that for a second. If you had a carbon price that you thought was a good one. Leave aside the political challenge of getting a carbon price that might be high enough to actually account for the externalities. What would be the rational for mandates, meaning building codes on top of that? Is it, why would we think that the builder, owner, user of the buildings doesn’t necessarily respond to that pricing center as we would hope that they would?
Michael Gerrard: Well, the first place as often it is connected between who has to pay the carbon tax versus who pays for the electricity or natural gas or oil bills and who benefits from it. So, that distinction, the disconnect between who pays and who benefits is one.
Jason Bordoff: Principal agent.
Michael Gerrard: Principal agent issue. Second issue is what’s the elasticity that it maybe that the price signal will not be strong enough to induce a property owner to undertake a significant expenditure. Third is uniformity and the way that builders work with the specifications. If anybody who wants to build a building in New York City knows that they have to have insulation of a certain nature and ventilation and so forth. It’s much more likely to happen that way than if you were to wait for price signals to somehow trickle down to the architects and the engineers and the builders.
Jason Bordoff: Are there others, what are some other examples where you think state and local actually make more sense and the right place to focus?
Michael Gerrard: The issue of the sighting of the renewable energy facilities is another one where unless it’s on federal land, intrinsically, you have state and local decisions about land use, land allocation, permitting, all of those are areas where there is a federal overlay very often depending on whether there is federal acts and invokes certain statutes and so forth. But most of these land used decisions are traditionally state or local.
Jason Bordoff: So, back to the federal level now, how much, how far can we get with existing authorities that the executive branch has? Obviously as I said, President Obama tried to use several of the more significant ones and how much is this about new legislation which as we all know is not easy to do in congress right now.
Michael Gerrard: So, EPA and the department of transportation already have all the authority they need on motor vehicles standards. Both passenger and freight. The department of energy has all the authority it needs on energy efficiency standards for appliances and equipment.
Jason Bordoff: And authority just to be clear would be existing, you know, DOT and EPA, fuel economy rules or missions standards and just continue to ratchet those up until you get to long term deep decarburization goals.
Michael Gerrard: The existing statutes give the agencies the authority to issue regulations that are strong enough. And so, an agency working for a president who really wanted to do this could take a great deal of action without congress. The clean air act of course is the major tool that the Obama administration used. We know that, that was not really designed to deal with greenhouse gases and the courts have expressed some hostility to the broadening of its use. So, that scenario where a…
Jason Bordoff: Do you think power plant would have prevailed if the 2016 elections had turned out differently?
Michael Gerrard: I think that the fact that the Supreme Court stayed the clean power plant in February before the election is a profoundly bad omen for what would have happened to it and now that justice Kennedy has been replaced by justice Cavanuagh that makes it even more uncertain.
Jason Bordoff: So, broadly, so, we’ll continue. You were talking about the executive actions that exist. Do you feel like President Obama when he turned to using executive actions in the second term really sort of had a pretty comprehensive list over the big opportunities that we could, one could use moving forward.
Michael Gerrard: I think that he was doing most of the things that could be done with authority not as quickly as many of us had hoped that it would happen and when you get into a lot of the details for instance about the electric transmission system, I think there is more that could have been done in that area. But that also is an example where I think it could rational and then it is necessary because these statute that was supposed to provide for expediting the construction of transmission lines has broken some court decisions rendered ineffective. So, I think we do need congressional action there. But there was a lot of activity on both appliance energy efficiency standards and on motor vehicles standards and I think that, that was important progress under existing statutes.
Jason Bordoff: I mean, you talk about the electricity sector just to be clear, you weren’t talking about the clean air act. You were talking about authorities, they have to facilitate say permitting of long distance transmission lines.
Michael Gerrard: They are always talking specifically about the wholesale transmission lines where states have the authority for the sighting of transmission lines and many states are standing in the way or it’s going really slowly. And work was, the department of energy was given some authority to override state and local opposition but it was extremely limited and ineffective.
Jason Bordoff: And so was that, I’m sorry, I just want to make sure, I understood what you said. Is that something, there is better authority to cite those lines and overrule the state but are you saying more congress needs to do more or just that the administration needed to, you act in a way it didn’t.
Michael Gerrard: In that specific area, I think we need congressional action because the fourth circuit interpreted the statute to in a particular way that slowed it down and then the department of energy designation of particular transmission area was also invalidated in a way that and that made it ineffective. So, that’s an area where I think congress should act.
Jason Bordoff: In addition to editing this book, you also wrote that chapter on decarbonization of electricity, particularly around utility scale renewable. So, what, go a little more in depth into what needs to be done there?
Michael Gerrard: So, the magnitude of the construction program of new utility scale renewable we need is immense. If we electrify the most of the transportation system and much space heating and cooling, we are going to double the amount of electricity that is generated. At the same time, we need to shut down all of the coal fired generation. And move away from natural gas. Which means that each and every year out to at least the year 2050, we are going to need to be building thousands or tens of thousands of utility scale wind and solar. The current legal system, we have to approve that are just too cumbersome. If each one requires a multi-year species review and environmental impact review, it’s never gonna happen. And so, we have specific recommendations for changing the process, most of which can be done with an existing statutory authority. The western solar plan was a program of the land management within the department of the interior to look at large regions for solar and do all the environmental and species review at once. That worked well and when specific project came up, they could be approved quite quickly. So, one of the things we suggest is that we have similar plans for other regions of the country. So that you can put a lot of renewable facilities there with a minimum of delay.
Jason Bordoff: One other thing that was interesting about the book was we often talk about the tools, this is what the course, I teach at ______ [00:13:46] about the tools, the federal government has mandate subsidies, you can price externalities. There is behavioral economics tools that you talk about. But you focus in addition to all of those things, you focus a lot on removing existing obstacles. So, can you talk more about what those obstacles are? What needs to be done?
Michael Gerrard: So one of the obstacles is the environmental review process which often takes, an average of four, five years per project. A lot of that can be expedited by combining actions by narrowing the scope somewhat of the analysis to just look at the things that are relevant by having limited periods of time for judicial review for people to challenge it. That’s one example of a kind of obstacle that can be cleared away.
Jason Bordoff: So, you’re talking about NEPA review, the national environmental policy act and that, which is as you know, you often hear the energy industry, people building hydrocarbon infrastructure complain that NEPA takes too long and presents bottlenecks, so that it sounds like a function of NEPA is whatever the kind of project. Whether it’s clean energy or otherwise. It’s a slow process and for clean energy, you are saying, there are ways to reform it and accelerate it.
Michael Gerrard: It’s a slow process. It has many benefits. It identifying many problems with projects that can, environmental problems that can be headed off. But it’s frustratingly slow for applicants across the board and toward the end of the Obama administration, congress passed a statute called the fast act which was designed to help expedite federal review and approval of all manner of projects. It wasn’t used much by the Obama administration and not used much by the Trump administration. But it’s on the books and it has a lot of ability to help coordinate different federal reviews and speed them up.
Jason Bordoff: And one of the things that as you know came up in the last administration, still comes up in court all the time is the extent to which a NEPA review for whatever you’re reviewing pipelines are one example, not the only one. The way climate change is taken into account in NEPA. Just say a word about kind of where that is now and what you think ought to be done?
Michael Gerrard: So, early in the Obama administration, the council on environmental quality proposed guidelines for how climate change should be considered in the NEPA process. There was a lot of push back in congress. The rules, the guidelines didn’t go final until the last year of the administration. It called for consideration of both whether the greenhouse gas emissions that would result from a construction of the project and what is the effect of climate change on the project, the physical impact that it would have that Trump administration quickly revoked that guidance. But a number of court decisions have said whether or not you have the guidance, the underlying law, the national environmental policy act requires this analysis. This analysis is actually not that difficult. You know, a typical environmental impact statement is even longer than this book. And there is an industry of consultants that are in the business of writing these EIS.
Jason Bordoff: The keystone pipeline, EIS a few dozen of these books.
Michael Gerrard: Right, right. Adding a couple of chapter, adding a chapter that talks about these climate impacts is not that difficult and it doesn’t add much time or expense to doing it. But it is very helpful to decision makers who actually care about this kind of thing. I mean, particularly the impact that climate change will have on a project. It makes no sense to be building a project that in 30 years is gonna be under water. And the EIS with the right kind of analysis will reveal that.
Jason Bordoff: Some of the analysis we do about dynamic effects, if you would it comes up with you know, DC circuit cases around the gas pipelines for example, if you were to bring an additional gas to the market, that has a mission associated with consumption of that gas. It might change the market. It height depress the price of gas. That could challenge goal also challenge renewables. You put more into the global market and that affects consumption halfway around the world. So, it’s not totally straight forward sometimes analysis.
Michael Gerrard: Right. But it’s a kind of analysis that is often done on the financial side anyway. You know, the people who are financing a project won’t understand these factors as well. So, it’s not always straight forward. It’s not indisputable. But methodologies are emerging to do that. And you can show how the result of these different methodologies, so decision makers will know what they are dealing with.
Jason Bordoff: As you talked about those very important role for renewable, that was the section, you wrote as we use more electricity. This is a pretty technology neutral report in some sense, it focuses on carbon capture. It focuses on nuclear, this discussion of hydrogen and heavy-duty freight. Can you talk about nuclear energy? Clearly a price on carbon would help but there is, I mean, the way we think about risk as a society when we think about nuclear energy and how much that the government should bare and how we license these facilities. What additionally do you think needs to be done if nuclear is gonna play a role? If it makes economic sense and should play a role?
Michael Gerrard: I would think about nuclear in three pockets. The first pocket are the existing nuclear power plants which I think should continue in operations as long as they can do so safely because whenever a nuclear power plant shuts down, it’s almost invariably replaced by fossil. Just a few days ago, it was announced that three mile island is gonna shut down and it will be replaced by coal and gas. That makes no sense. I think, we should keep these operating as long as that can be done safely.
Jason Bordoff: Now as an economic choice where it’s just having trouble.
Michael Gerrard: Yes, that’s right. And the state of Pennsylvania didn’t bail them out unlike New York and Illinois which are bailing out some of these existing plants. The second bucket is building new nuclear power plants using more or less existing technology. And of course, the economics of that, it become quite impossible to nuclear power plants now under construction in the United States, in Georgia, the cost overruns are in the billions. I don’t think, anybody is gonna start any new nuclear power plant construction using existing technology. The third is new technology, small modular nuclear and so forth. I’m all for vigorous R&D program but don’t expect any positive results from that for commercial scale for a decade or two or three. So, I think, we need to try to advance in R&D but we absolutely can’t count on it. And once it’s going, it’s only electricity and so, you also need to have taken steps to electrify the other uses.
Jason Bordoff: Yeah, right and we are also people know, we have a large carbon management initiative here that Dr. ______ [00:20:33] is leading and so collaborating on some of these legal pathways to carbon capture, utilization and storage. A lot of faculty, colleagues across the university that are leaders in this space. So, talk a little bit about beyond the kind of incentive whether it’s to put a price on carbon or clean electricity standard beyond that what you think needs to be done towards policy for CCS when it comes to these legal pathways?
Michael Gerrard: So, I’m focused more on direct air capture and removing the CO2 from the atmosphere than I am on carbon capture and sequestration at power plants. I think, all the coal generation needs to be shut down. I just don’t think it could be made clean enough anything approaching economics. The underlying technical report that we relied assume that the only continued use of natural gas to generate electricity would be with carbon capture and sequestration. But we don’t have that economical and commercial level anywhere in the world. But we need massive amounts of carbon dioxide removal from the atmosphere. All of the IPCC and other reports say that is absolutely an essential component on top of efficiency and decarbonization and everything else.
Jason Bordoff: So the legal question you would be looking at there, who regulates those, who does it and this is sort of a public good in a sense, right.
Michael Gerrard: Right. One major issue is what do you do with the CO2? Do you dispose of it? We at the Sabin center have been working with the legal issues and some technical issues that scientists at Columbia ______ [00:22:06] laboratory have been working on, on offshore disposal of the CO2 and of course ______ [00:22:14] and others you work with have been working on utilization of carbon, so it doesn’t have to be disposed of. But there is no regulatory structure in place for any of that. Conceptually, it’s, we can imagine it. You know, when we sketched out what the laws would need to be but it does require a new regulatory scheme.
Jason Bordoff: And this both focuses on United States. Obviously, the growth of the mission is coming from many other parts of the world. Do you have thoughts about the legal tools, pathways to beyond international climate negotiations, help to incentivize global action? Border adjustments in the carbon price, you know, are one example that come up often. Other ones.
Michael Gerrard: We do talk about a border adjustment and I know that your center is working on some of the difficult details of how border adjustments would work. One thing that we would love to do would be to see this work about U.S. legal tools be replicated in other countries. So, there were 15 other countries for which these reports were prepared. U.S. lawyers can’t do that but we would love if lawyers in some of the other countries would undertake similar programs for how the laws in those countries could be modified so that we are, so that those countries are also on the same pathway.
Jason Bordoff: There is a whole literature about you know, whether if you have a carbon pricing regime and you have adjustments to impose it on imports, presumably exempted on exports, that falls within the article 20 exceptions to the GAT in the WTO and would be defensible. What’s your take on that? Is that a straight forward question?
Michael Gerrard: I don’t think, it’s straightforward. I think that you’re inviting lots and lots of litigation challenges to particular calculations because for any given import stream, the amount of money that could be at stake with the board of adjustment is so large that whoever passed the paper money is where gonna be willing to spend a lot of money on lawyers. And so, calculating what are the carbon emission impacts of a particular steel, aluminum or paper or whatever import with all the variables that go into the electricity supply and everything else at the manufacturing and becomes extraordinarily complex. So, the notion of it is pretty straightforward but the application is very complicated.
Jason Bordoff: And is there anything as I was reading this, it gives a really robust menu of legal tools that exist and then the question is which ones, how do we know, which ones to use, right so, an economist might say, you would do cost benefit analysis. You would figure out which are the cheapest, which are the most cost effective. Some of these were framed as EPA should do this, EPA should do that and whether it’s, you know, should have tax, should continue or expand tax credits for electric vehicles. If you subsidize something, you’ll get more of it. There is a lot of economic literature that a lot of those subsidies are marginal. You’re subsidizing activity that might have happened anyway or cash for clunkers, the program we put in place in Obama, the economic evidence of that doesn’t look great actually. So, do you have a sense of what tools exist to figure out which of these to prioritize? Which make the most sense? Which are most cost effective and how, there are so many things in here, how do we know which, how to prioritize them?
Michael Gerrard: The job we set out for ourselves as lawyers is to identify where are the legal impediments and how do we break away from those legal impediments. We left it to the people who did the[00:25:32] report. The engineers and so forth to tell us what were the physical tools that are necessary and we think that a lot of economists and others need to look at among the various tools that are available. Which do we select. That’s not a job for lawyers. That’s a job for economist. But we wanted to say, here is the tool kit. If you decide to do a carbon tax or renewable portfolio standards and these kinds of incentives or so forth, here is how the law needs to change in order to accomplish that.
Jason Bordoff: So, we’ve seen different candidates put out platforms and you know, so ______ [00:26:08] work in this recently and here is the existing executive action. Then we would push for a national standard through congress but send the carbon price signal. It also included very large amount of additional government spending. Do you have a sense about, you have all these legal tools in here. We have the authorities we need. Do we need trillions of dollars of new government spending to get where we need to go?
Michael Gerrard: I think that for some of these, we do. I think that we certainly do for R&D. I think that for the scale of utility scale construction that we need, that the market signals have been nowhere near enough and I think that we do need a public works program to get a lot of, to get these renewable built at the necessary scale. Now, hopefully, they’ll be able to get, you know, pay back to sale of electricity and so forth, but I think that simply relying on market signals has not proven itself to be, to get us the rapid pace, we need.
Jason Bordoff: You talk about the importance of carbon price. You’re gonna prioritize three executive, things you can do with existing executive action. What would they be?
Michael Gerrard: Strengthening the motor vehicle standards, passenger emissions standards. Strengthen the energy efficiency standards for appliances and equipment, you know, adopt them for a lot more classes of equipment and make them stronger. And speed up the federal approval process for utility scale renewable.
Jason Bordoff: So, now what happens next with this all the amount of work that went into this. What’s the next step in this project?
Michael Gerrard: So, our next step is that we have launched an effort to procure a lot of pro bono lawyers around the country to draft the model laws and ordinances that are necessary to implement the recommendations. Rick[00:27:59] who just retired as an environmental partner at the law firm of ______ [00:28:04] and also teaches at Columbia as an adjunct has taken this on to organize it and so we now have a dozen major law firms that have already signed on to do the legal drafting. We are looking for more, if anybody is interested who is listening in volunteering, please contact ______ [00:28:23] law firm. We are about to create a website that will post not only the model ordinances and federal laws and so forth that we have drafted but there are also assembling a lot of that already exist. Either enacted or proposed. So that particularly at the state of local level, legislators who might be interested in moving forward can look and download model language. So, this is a major effort that we are gonna be doing over the next couple of years.
Jason Bordoff: And this should be local, state… All of the co-staffers, people in the administration.
Michael Gerrard: That’s right. All of the, every level of government. We’re trying to create the latest sort of language that can be at every level of government to carry out the recommendations.
Jason Bordoff: And then you’re also doing work, you mentioned some of these legal barriers, NEPA reviews and other things to developing renewable, expanding use of renewable energy. Talk a little bit about what you’re doing now, what needs to be done?
Michael Gerrard: So one of the obstacles that has shown up to where there is a large number of renewable energy projects is local opposition. People who don’t want to see a wind turbine or whatever. So, we at the Sabin center for climate change have also started something we are calling the renewable energy legal defense initiative whose purpose is to provide pro bono legal representation to communities and others who want wind and solar and associated transmission and storage and so forth but that are being opposed. So, the law firm where I was a partner for many years and I’m still affiliated ______ [00:29:56] has ______ [00:29:58] a litigation associate Laura Cunningham, who spend half her time over the next year working on this project. We have already started our first lawsuit which is a suite against a little town in upstate New York that banned utility scale solar for no good articulated reason. We’re representing some local farmers who have agreed to lease their land to solar developer. We are looking for more of these kinds of cases. So, again, if any of the listeners to this podcast know of instances where renewable projects are being blocked by local opposition and where litigation might be helpful, please let me know and we’ll look at lining up pro bono legal help.
Jason Bordoff: Michael, thanks for spending time with us today. I know, what a privilege it is for me to be on the faculty with you and get the chance to learn from you on a regular basis. So, thanks for spending time to help our listeners learn from you today as well and we spend as you know, all of our time here at the center to bring the insights from the kind of world class academic work our faculty across the university is doing and bring it to policy makers and make it useful to them, these legal pathways, guide book is a tremendous resource toward that effort. So, thanks for doing it and thanks for spending time to talk with us about it today.
Michael Gerrard: It’s been a pleasure Jason. Thank you.
Jason Bordoff: Thanks to all of you for listening. For more information about Columbia Energy Exchange, and the Center on Global Energy Policy, visit us online at Energypolicy.columbia.edu or follow us on social media at Columbiauenergy. I’m Jason Bordoff, we’ll see you next week.