GlobalWarming.org

Earlier this week, the Supreme Court agreed to hear an appeal from five electric utilities in State of Connecticut v. American Electric Power.  The utilities are challenging an appellate court decision that the “political questions” doctrine does not bar states and other plaintiffs from suing emitters of carbon dioxide (CO2) for injuries alleged to result from CO2-induced global warming.

Troutman Sanders, a law firm with an extensive environmental practice, concisely summarize the history and basic issues of the case:

Supreme Court Grants Certiorari in Second Circuit Global Warming Nuisance Case

December 6, 2010

In a victory for industry, the Supreme Court today granted a petition from a group of electric utilities for a writ of certiorari seeking review of the decision of the United States Court of Appeals for the Second Circuit in Connecticut v. AEP.  The case concerns whether greenhouse gas emitters may be sued in tort on a theory that their emissions, by assertedly causing climate change, constitute a public nuisance. 

The lawsuit was originally brought in the United States District Court for the Southern District of New York by eight states, the City of New York and several environmental parties against five electric utilities.  The suit alleged that the companies’ coal-fired plant emissions were a significant cause of global warming and constituted a public nuisance actionable in tort.  The District Court dismissed the case in 2005, holding that the lawsuit presented a “political question” that was not appropriate for judicial resolution.  However, in September 2009, the Second Circuit overturned the District Court, found that the plaintiffs properly stated a cause of action for “public nuisance,” and rejected Defendants’ argument that Clean Air Act regulation of greenhouse gases displaced Plaintiffs’ federal common law nuisance claims.

Granting the petition for certiorari does not mean that the Court will overturn the Second Circuit decision, only that the Court will now consider the issues on the merits.  One development of note is that Justice Sonia Sotomayor recused herself from considering the petition and will undoubtedly also recuse herself from the merits decision.  Justice Sotomayor was on the Second Circuit panel that heard oral argument on Connecticut v. AEP, but recused herself from taking part in the Second Circuit’s decision after learning of her nomination to the Supreme Court. 

For more information, please visit our previous discussion of the Connecticut v. AEP case.

The case pits the States of Connecticut, New York, California, Iowa, New Jersey, Rhode Island, Vermont, and three conservation groups against American Electric Power, Southern Company, Tennessee Valley Authority, Xcel Energy, Inc., and Cinergy Corporation.

 A victory for plaintiffs would be a boon to ambulance chasers throughout the land and, indeed, across the globe but a bane to the U.S. economy. It would also further erode what remains of our constitutional system of democratic accountability.

CO2 is the inescapable byproduct of the carbon-based fuels that power modern manufacturing, agriculture, and commerce. This means that classifying CO2 as a “public nuisance” has an enormous potential to endanger public health and welfare. The American Farm Bureau Federation put the point very well in an amicus brief on a related case (Comer et al. v. Murphy Oil et al.):

[B]ecause the production and use of fossil fuels and the attendant GHG emissions are so closely tied with all facets of modern life, a finding that using fossil fuels and emitting GHGs constitute a nuisance is akin to saying that modern life constitutes a nuisance. That may be true in some sense, but the necessary rejoinder is: compared to what? Certainly not as compared with pre-industrial society with preindustrial levels of atmospheric GHG concentrations. As Justice Breyer stated in his concurring opinion in Whitman v. Am. Trucking Ass’ns, in the context of air pollution regulations designed to protect the public health, “[p]reindustrial society was not a very healthy society; hence a standard demanding the return of the Stone Age would not prove ‘requisite to protect the public health.’”

Like the politicians who assured an earlier generation of Americans that the income tax would apply only to the super rich, plaintiffs in AEP v. Connecticut say they just want to compel the nation’s biggest coal-burning utilities to cut their emissions. But once the precedent is established, there can be no principled basis for shielding any class of emitters from tort claims. As I explain in a column posted at PajamasMedia.Com:

If litigators can sue large utilities for emitting CO2, they can also sue smaller utilities and manufacturers. Indeed, they can in principle sue anyone and everyone. Utilities, after all, only emit CO2 in the process of serving customers who use electricity. People lighting their homes, powering their factories, and running their laptops are ultimately to blame for destroying the planet, according to the “science” invoked by plaintiffs. In their worldview, everybody is injuring everybody else — which implies that everybody has standing to sue everybody else. Plaintiffs may preach “green peace,” but they sow the seeds of a war of all against all.

Since global warming is, by definition, global, and since anyone anywhere on the planet who uses carbon-based energy, or consumes goods and services made or transported with carbon-based energy, contributes to CO2 emissions, both the pool of potential victims and the pool of alleged injurers number in the billions! This despite the fact that without carbon-based energy, billions of people on the planet would starve and/or freeze in the dark, and billions more would not even exist. Massachusetts v. EPA’s legacy of absurd results is small change compared to the Hobbesian nightmare the Court will bring into being if it decides Connecticut v. AEP in favor of plaintiffs.

If Connecticut et al. win, firms large and small will face the threat of interminable litigation, from a potentially limitless pool of plaintiffs, in which multiple courts, acting without benefit of statutory guidance, improvise remedies — both injunctive relief and damage awards — as they see fit. A victory for plaintiffs would, in short, destroy for many firms the legal predictability essential to business planning.  

In addition, climate policy would be made by decision-makers even less accountable than the non-elected bureaucrats at EPA, who at least depend on congressional appropriations for their budgets and salaries. We would have to live under Kyoto-like restrictions on energy use imposed neither by Congress nor by EPA but by trial lawyers and activist judges appointed for life.

In their lawsuit against the utilities, plaintiffs asked the lower court to fashion a remedy whereby the utilities would be required to reduce their CO2 emissions by a “specified percentage each year for at least a decade.” Such a “remedy” is legislative in nature and therefore beyond the competence of courts and juries, as the Justice Department argued in its amicus brief, submitted to the Supreme Court on half of the Tennessee Valley Authority:  

Establishing appropriate levels for the reduction of carbon-dioxide emissions from power plants by a “specified percentage each year for at least a decade” (as Plaintiffs request), would inevitably entail multifarious policy judgments, which should be made by decision-makers who are politically accountable, have expertise, and are able to pursue a coherent national or international strategy — either at a single stroke or incrementally.

No doubt plaintiffs once hoped the specter of CO2 litigation chaos would spook industry into supporting cap-and-trade as the lesser evil, just as they hoped the prospect of EPA regulation of greenhouse gases via the Clean Air Act would tip the political scales in favor of Waxman-Markey. However, this greenhouse protection racket strategy of regulatory extortion has not worked and arguably even backfired, exposing greenhouse crusaders as self-righteous bullies. 

In November, angry voters punished supporters of the stealth energy tax formerly known as cap-and-trade. They’ll be even angrier if the Court empowers ambulance chasers to “enact” the job-killing, anti-energy policies they just rejected at the polls.

On Saturday (December 4, 2010), the Senate defeated a package of tax policy extensions, including a year extension of the Volumetric Ethanol Excise Tax Credit (VEETC) at $.36 per gallon, a 20 percent reduction from current levels.  In response, a diverse coalition of organizations issued a joint press release applauding the vote on the VEETC and explaining why the tax credit should not be renewed.

Here’s what the participants said:

 “A reduction in the corn ethanol tax credit is a small step in the right direction for animal agriculture and America’s taxpayers.  Burning a substantial portion of our food and feed as fuel is not a sustainable answer, in the long term, to solving this nation’s fuel needs.  Continuing to divert a significant portion of our corn crop into our fuel tanks will continue to increase costs for the meat and poultry industry and will result in higher food prices for consumers.” 
– J. Patrick Boyle, President and CEO, American Meat Institute

“The ethanol tax credit should be allowed to expire on schedule at the end of 2010.  In this period of huge deficits, there is no justification for the government’s losing billions of dollars in tax revenue to prop up an industry that already has a market required by law”
– George Watts, president of the National Chicken Council

“The VEETC will cost $4.75 billion next year alone, more than 2 times the roughly $2.25 billion in tax incentives for all other renewables in the tax extenders package. Not only is the VEETC bad fiscal policy, but it’s sucking all the oxygen out of our federal budget for renewables. This environmentally destructive handout to the oil industry means doing more harm than good when it comes to investing in clean energy and must be eliminated.”
– Nathanael Greene, Director of Renewable Energy Policy, Natural Resources Defense Council

“The blender’s credit and import tariff on foreign ethanol have distorted the corn market, creating needless volatility in the cost of animal feed.  Feed accounts for 70 percent of the total cost of raising a turkey, and corn is the single-largest ingredient in turkey feed.  The turkey industry has endured the deepest cutbacks of any in animal agriculture – a decrease in turkeys raised of more than 6 percent since 2007 levels and a near 9 percent reduction from 2008 levels – to adjust to these increased input costs. More importantly, the turkey industry eliminated nearly 3,000 jobs vital to rural America in 2008 and 2009 alone.”
 – Joel Brandenberger, president of the National Turkey Federation

“The federal government faces a projected deficit nearing $1.4 trillion next year, and yet some in Congress insist upon continuing to shell out billions through refundable tax credits to the ethanol industry. The time has come for Congress to end this wasteful practice and reduce burdens on taxpayers.”
 – Andrew Moylan, Director of Government Affairs, National Taxpayers Union

“While we believe a 20 percent reduction in the corn ethanol tax credit is a step in the right direction, spending $3.8 billion next year alone for conventional biofuels is still too much.  Today’s vote gives the Senate another chance to get this policy right, by further reducing or eliminating both the corn ethanol tax credit and import tariff.  We look forward to working with Congress to promote the development of truly sustainable advanced biofuels.”
– Geoff Moody, Manager, Federal Affairs, Grocery Manufacturers Association

“A growing choir of voices agrees: the Senate must pony up and end the subsidy for dirty corn ethanol for good.  When people across the country are having a hard time putting food on the table, welfare to millionaires and polluting corporations alike is unacceptable.   It’s impossible to justify wasting billions of taxpayer dollars on an industry that is bad for the environment and bad for the economy.”
– Kate McMahon, Biofuels Campaign Coordinator, Friends of the Earth

“With the national debt fast approaching parity with the GDP, now is not the time to renew a wasteful subsidy for even one year. Nor should tax policies vital to the nation’s economic recovery be held hostage to a special-interest giveaway. The November elections were a rebuke to fiscal irresponsibility in Washington. The lame duck Congress can show that it got the message by letting the VEETC meet its statutorily appointed fate.”
– Marlo Lewis, Senior Fellow in Environmental Policy, Competitive Enterprise Institute

“It makes no sense to spend billions of dollars a year on a fuel that does little to reduce America’s dependence on oil but does a lot to exacerbate soil erosion, water pollution and habitat destruction across the Corn Belt,”
– Craig Cox, Senior Vice President, Environmental Working Group
 
“Congress needs to scrap plans to extend VEETC.  This is an outdated and wasteful policy that does nothing for our energy security or environment.  With all the other critical funding needs facing the country, giving the oil industry billions of taxpayer dollars to follow the law just doesn’t make sense.”
 – Brendan Bell, Union of Concerned Scientists

“Reducing the corn ethanol tax credit is a step in the right direction.  However, allowing the ethanol tax credit to expire at the end of 2010 creates greater certainty for the grain industry. Other grains, including wheat, may increasingly be in shorter supply as the nation continues losing wheat acreage and market volatility remains high,”
– Robb MacKie, president and CEO, American Bakers Association

“Organizations from vastly different sides of the political spectrum have come together and said in a clear voice: it’s time to stop – not slow down – this policy of throwing billions of taxpayer dollars at an activity that serves little, if any, public benefit.  By creating huge incentives for corn to make its way to ethanol plants rather than be available to consumers and livestock, we are sacrificing our nation’s food independence while doing nothing to reduce our nation’s energy independence.  The time to stop this insanity is now.”
– Rob Vandenheuvel, Milk Producers Council

 “The American Frozen Food Institute commends the Senate for rejecting the continuation of a special-interest tax break that saddles food producers with higher costs and drives up prices for consumers in the check-out aisle.”
– Kraig R. Naasz, president and CEO, American Frozen Food Institute
 
“The wasteful and environmentally-damaging subsidy for corn ethanol should expire, as scheduled, at the end of 2010. The broad alliance calling for ending this taxpayer giveaway underscores the fact that it is the right thing to do for our nation’s fiscal health, our environment, and our food security.”
– Sara Chieffo, Deputy Legislative Director, League of Conservation Voters

“We welcome continued scrutiny of this wasteful tax subsidy, which in appropriately supports the water pollution and high-volume water use associated with corn ethanol production. Clean Water Action will continue to support energy choices that make protection of water resources a priority.”
– Lynn Thorp, National Campaigns Coordinator, Clean Water Action

“It’s time for the subsidy party for ethanol to end. Instead of giving taxpayers a lump of coal by wasting billions of dollars more on this failed policy, lawmakers should concentrate on ways to eliminate wasteful spending.”
 – Steve Ellis, Vice President, Tax Payers for Common Sense

This morning’s Pajamas Media.Com carries a column by yours truly entitled, “Ethanol’s Policy Privileges: Heading for History’s Dustbin?” With links to the relevant studies, the piece explains why Congress should let the ethanol tariff and tax credit expire when their statutory authority runs out at midnight, Dec. 31, 2010.

The most fun I had writing the op-ed was in debunking the propaganda that ethanol’s policy privileges ease our pain at the pump. My evidence? None other than www.fueleconomy.gov, a Web site jointly administered by the Environmental Protection Agency and the Department of Transportation. Fueleconomy.Gov shows that if you own any one of 110-plus “flexible fueled” vehicles, you pay hundreds of dollars more per year if you fill the tank with E-85 (motor fuel blended with 85% ethanol) than if you fill it with regular gasoline.

The column also argues that, even if one believes in Al Gore’s “planetary emergency,” the ethanol tariff and tax credit are at best horribly inefficient and at worst counter-productive as climate policy.

Not that I disagree with everything Al Gore says. As noted in the column, Mr. Gore now acknowledges that his previous support for ethanol subsidies was a mistake, noting their contribution to the food price crisis of 2008. Gore says he “had a certain fondness for the [corn] farmers in the state of Iowa because I was about to run for president” in 2000. As comedian Bill Maher  once quipped, “No one asked for corn in their gas tank. . .But I suppose if the first presidential primary was in Vermont, we would all be pouring maple syrup into our gas tanks.”

“Corn is King” has been the statist quo for many years in farm state politics — hence also in Washington, D.C. But the times they are a-changin. A bipartisan group of 17 senators, led by Sens. Dianne Feinstein (D-Calif.) and Jon Kyl (R-Ariz.), say it’s time for the tariff and tax credit to go gently into the night. A broad coalition of environmental, taxpayer, hunger, free market, and food industry organizations are urging House and Senate leaders to let the tax subsidy meet its statutorily appointed fate.

The lame-duck Congress has a rare opportunity to avoid $25-30 billion in new deficit spending over the next five years, ease consumers’ pain at the pump, and scale back political manipulation of energy markets just by letting two special-interest giveaways tumble into history’s dustbin. They can do good just by doing nothing — surely there’s a lesson in that too.