California AG sues greenhouse gas emitters.

Attorney General Lockyer Files Lawsuit to Reduce Global Warming Emissions from Five Largest Polluters

California Joins Seven Other States, New York City in Groundbreaking Action

Office of the Attorney-General
State of California

July 21, 2004

04-076
FOR IMMEDIATE RELEASE
(916) 324-5500

(LOS ANGELES) Attorney General Bill Lockyer today filed a groundbreaking lawsuit against five major utilities, alleging global warming constitutes a public nuisance that threatens California with widespread harm, that the defendants have contributed to the nuisance as the nations largest emitters of carbon dioxide, and seeking reductions in the companies global warming pollution.

This lawsuit opens a new legal frontier in the fight against global warming, said Lockyer. Global warming poses a serious threat to our environment, our natural resources, our public health and safety, and our economy. A head-in-the-sand response is not an option. For the sake of our people and their future, we must act now. Requiring these major polluters to do their part is crucial to successfully fighting the threat.

The lawsuit was filed jointly by Lockyer, and Attorneys General Richard Blumenthal of Connecticut, Tom Miller of Iowa, Peter C. Harvey of New Jersey, Eliot Spitzer of New York, Patrick C. Lynch of Rhode Island, William H. Sorrell of Vermont and Peg Lautenschlager of Wisconsin. New York City also joined the action, filed in U.S. District Court for the Southern District of New York.

The utilities named in the complaint together own approximately 174 power plants. The companies include: American Electric Power Company, Inc. (AEP); AEP Service Corporation (wholly-owned AEP subsidiary); Southern Company; Xcel Energy; Cinergy Corporation; and Tennessee Valley Authority (TVA).

Combined, the defendants pollute the air annually with about 652 million tons of carbon dioxide, a leading cause of global warming. That is more than the total emitted by one-and-one-half Californias, and 358 percent more than the total produced by all the motor vehicle gas combustion in California.

Brought under the federal common law of public nuisance, the lawsuit does not seek damages or other monetary remedies. Instead, it asks the court to order the defendants to abate their contribution to the public nuisance of global warming by reducing their carbon dioxide emissions.

The lawsuit marks the first use of public nuisance law to fight global warming and the first time government officials have sued private companies to reduce carbon dioxide emissions. The unprecedented legal action has deep roots in U.S. Supreme Court rulings that have long recognized public nuisance law allows states to seek remedies for harm caused by pollution generated in other states.

There is a clear scientific consensus that global warming has begun, is altering the natural world, and that global warming will accelerate in this century unless action is taken to reduce emissions of carbon dioxide, the lawsuit states. This complaint seeks a court order requiring defendants to reduce their emissions of carbon dioxide, thereby abating their contribution to global warming, a public nuisance.

Left unchecked, global warming will cause serious injuries to the states, the complaint alleges. It adds the injuries are more than a collection of disparate harms. Together, they constitute a threat of fundamental transformation. Unless carbon dioxide emissions are reduced, the complaint alleges, the states and their residents will suffer widespread damage to public health, coastal resources, forests, wildlife, water supplies, property, infrastructure and key economic sectors.

In California, the complaint alleges, global warming could: cause heat-related deaths to double in Los Angeles, with the poor and elderly at most risk; worsen smog and, as a result, increase the incidence of asthma and other respiratory diseases; produce rising sea levels, and inundate low-lying property and damage infrastructure along the states 1,100-mile coastline; cause San Francisco to suffer a 100-year storm every 10 years; cause billions of dollars of property damage due to increased flooding; and threaten to inundate tidal marshes in the San Francisco Bay estuary, the largest on the West Coast.

Additionally, according to the complaint, global warming could: contaminate the water supply for 20 million Californians by increasing salinity in the San Francisco Bay and San Joaquin Delta; substantially reduce the Sierra snow pack, and cause resulting water shortages that would harm residents, hurt agriculture, disrupt other businesses and cut the source of hydroelectric power; and significantly increase the damage caused by wildfires.

Carbon dioxide emissions must be reduced to effectively fight the danger posed by global warming, according to the complaint. The risks of injury to the plaintiffs and their citizens and residents from global warming increase with the speed and magnitude of global warming, the complaint states. The speed and magnitude of global warming is primarily dependent, in turn, upon the level of carbon dioxide emissions.

As the nations five largest emitters of carbon dioxide, the complaint alleges, the defendants account for 24 percent of such emissions from the electric power industry. Additionally, they produce 10 percent of the countrys total carbon dioxide emissions, according to the complaint. Specifically, AEP and AEP Service emit 226 million tons of carbon dioxide annually, Southern 171 million tons, TVA 110 million tons, Xcel 75 million tons and Cinergy 70 million tons.

Lockyer and his fellow Attorneys General stressed their objective is to have the companies do their fair share to help reduce global warming. Further, the Attorneys General contend the defendants, by using available means and technologies, can lower their carbon dioxide emissions at relatively little cost.

Defendants have available to them practical, feasible and economically viable options for reducing carbon dioxide emissions without significantly increasing the cost of electricity to their customers, the complaint states. The options, according to the complaint, include: switching fuels, improving efficiency, increasing generation from non-carbon sources such as wind and solar, and better managing demand, among other measures.

Link to news release

The complaint filed in the United States District Court for the Southern District of New York

Nowhere in North America is there yet any regulatory limit on greenhouse gas emissions (GHGs). Some jurisdictions have moved tentatively in that direction, not with regulatory limits, but with requirements that companies offset greenhouse gas emissions from their operations with development or acquisition of carbon offsets.

In its earliest manifestation, companies would contribute funds to a tree plantation, for example. As the offsets "markets" have matured quickly in the last four years, the commodities and investment sectors have seen the lucrative opportunity this presents. Corporations can now purchase green credits.

Remember that the objective is to not add to or reduce atmospheric carbon. It is a financial game; the objective is to mollify public concern, and get a permit. The green credits are granted to projects that are carbon sinks, such as tree plantations; or that will replace existing dirtier emitters (converting a coal-fired industrial process to a gas-fired process) or meet new demand with fewer carbon emissions than would otherwise occur (a wind energy development instead of a gas-fired plant); or that makes more efficient use of existing GHG emitters (using the methane generated in a landfill for heat or electricity generation, rather than letting it evaporate).

Some jurisdictions now require projects that are heavy GHG emitters to offset a certain proportion of their project's output. Some project proponents offer to offset some percentage of the expected GHG output with green credits, anticipating that the offsets will in turn offset some of the public resistance to a project.

For example, the Sumas Energy 2 (SE2) gas-fired generation plant (heavily opposed in both BC and Washington, but has received approval from EFSEC. The National Energy Board, however, gave in to public protest and denied SE2 a permit for a powerline that would run from Sumas to Abbotsford, to tie into the western continental grid. SE2 is appealing that decision.) initially offered $100,000 per year for ten years for GHG research or offsets. Later, they increased the offer (and its complexity) to match, approximately, the "Oregon Rules" which sets a price of $0.86/tonne of carbon dioxide and a threshold The Oregon Rules set a standard which requires new facilities to meet a level of operation which is 17% below the most efficient natural gas fired plant. A facility may meet this standard by implementing offset projects
directly or through a third party, or it can follow what is known as the monetary path. SE2 opted for the monetary path.

(Older Catholics may recognize the spirit of indulgences in these offset schemes. You can sin, but with enough cash you can still buy your way into heaven.)

BC Hydro went further. With the Island Cogeneration Plant (ICP) in Campbell River (operating) and the Vancouver Island Generation Project (VIGP) in Duke Point (turned down by the BC Utilities Commission (BCUC), but still likely to be built) (see www.sqwalk.com) BC Hydro committed to offsetting 50% of the greenhouse gas emissions of the two projects. In its review of VIGP, the BCUC entrenched the arrangement, and BC Hydro is now required to offset 50% of the emissions, with a price of $10/tonne now set by a regulator.

Now, where was I? Right - no greenhouse gas regulations yet, but some voluntary concessions meant to assuage project opponents.

Yet in the absence of any regulatory hooks, 8 states and New York City have filed suit against America's 5 biggest greenhouse gas generators, all power utilities, as public nuisances.

Frivolous? Off the wall? You do what you can to effect change. We applaud these state and city governments.

Of the utilities named in the lawsuit, one has recently surfaced in BC. Cinergy Corp, of Cincinatti, in late 2003 entered into a relationship with Hillsborough Resources, to jointly develop a coal-fired generation plant at Hillsborough's Quinsam Mine in Campbell River (link). At the same time, Cinergy made a public commitment in the USA to reduce greenhouse gases in its operations (most of the company's generation capacity is from coal in the US midwest) (link).

This is appalling corporate hypocrisy - appear to do good work at home, do the opposite where you think no-one is watching. Whether it's Bhopal, a Nike factory in Indonesia, or coal-fired generation in Campbell River, it is unacceptable. Cinergy has no idea how ill-advised is their investment in coal-fired generation in British Columbia.