Bridging a Rural-Urban Divide
Author
Danielle Stokes - University of Richmond
University of Richmond
Current Issue
September-October 2022
Issue
5
city skyline across the bridge from rural farms with wind turbines

The new infrastructure law offers an opportunity to holistically address the geographic nuances of climate change policy and sustainable infrastructure. Stakeholders have a responsibility to consider place-based distinctions in promoting environmental justice

Many communities around the country have been grappling with the impacts of climate change for decades, but in recent years the onset of extreme natural disasters and weather events has catapulted climate adaptation and related environmental justice concerns to center stage. While policymakers have focused on climate mitigation and adaptation broadly, they are only beginning to discuss how different geographical areas will be impacted. For example, urban regions such as Boston have increasingly felt the effect of heat islands, or zones of elevated temperature resulting from buildings and roads that absorb the sun’s heat more than natural landscapes. In a 2021 study, Climate Central ranked Boston as the sixth hottest city of 159 analyzed. Upon noting the temperature differentials between urban and suburban areas, Boston-area leaders began to explore green-space designations as necessary infrastructure to mitigate the climate-related health and safety concerns that have resulted from metropolitan development. This is but one example of the climate challenges that occur along the rural-urban divide.

The nuances of the rural-urban divide warrant significant airtime within environmental policy discourse because each geographic location experiences climate change differently and may employ mitigation techniques that have implications in neighboring locations. Namely, cities can take mitigation measures such as investing in public transit, reducing access to parking, and requiring green buildings, but often cannot fully realize their mitigation goals and renewable energy needs without the building of energy infrastructure in the vast landscapes of nearby rural land. Conversely, conservation efforts and resistance to green infrastructure in rural areas provides for a more livable natural environment, but significantly shifts the costs of green development to urban areas.

As the environmental divide between these areas continues to widen, communities must make a shift toward collective action to achieve environmental protection. Accordingly, the government and other stakeholders have a responsibility to consider place-based nuances as they seek to promote environmental justice and sustainable infrastructure. The 2021 Infrastructure Investment and Jobs Act offers one policy mechanism that can begin to close this gap. At its core, this legislation provides for investment in economic, transportation, and technological infrastructure—critical to the future of environmental law and its policies—that will bridge the rural-urban divide.

Understanding the varying policy distinctions between rural and urban areas requires taking a deeper dive into the many fault lines along which this divide occurs. The first step is defining urban and rural areas. The U.S. Census Bureau divides urban into two categories: urbanized areas, which have a population of 50,000 or more, and urban clusters, which have a population of at least 2,500 but less than 50,000. Rural areas are defined as the converse, or “any population, housing, or territory not in an urban area.” By this definition, only about 1 in 5 Americans live in rural areas.

The rural-urban divide goes far beyond environmental challenges—implicating cultural, educational, and political factors, which are also relevant to policymaking. Where political viewpoints are concerned, there has been a longstanding debate related to the rural-urban divide. Most recently, news outlets dissected the 2020 election results by noting that rural and small-town voters overwhelmingly supported Republicans, while those in cities and suburbs favored Democrats. While this is often the political breakdown, voting trends indicated that the rural-urban division was even more prominent within the same state as compared to 2016. Political commentators pointed to coronavirus vaccination rates and opposition to redistricting as key issues creating this divide.

Outside of the political sphere, there are also certain distinctions regarding economic development, educational attainment, and sustainability that have also been linked to rural and urban locations. For example, the U.S. Department of Agriculture reports that the share of adults with at least a bachelor’s degree continues to increase more rapidly within urban areas, noting a 14-point gap in the percentage share of the population with a bachelor’s degree between rural and urban locations. Additionally, rural areas account for the vast majority of communities deemed “low educational attainment,” or areas where 20 percent or more of the working-age population lacks a high school diploma. When it comes to access to broadband, the Federal Communications Commission reports that although nationwide connectivity has increased in recent years, 17 percent of Americans in rural areas lack broadband access compared to less than 2 percent in urban areas.

It is clear that the rural-urban divide impacts distinct but related issues. Many argue that analyzing such issues through a lens of polarity perpetuates a divisive cycle. The National League of Cities asserts the need to shift toward a shared future of sustainable growth that “hinges less on a place’s designation as urban or rural, and more on its economic connections.” While it may be true that discussing certain aspects of politics, economic growth, or culture in terms of rural versus urban is counterproductive, where there are unique geographic considerations—such as the case with the energy transition and climate change adaptation—these distinctions can be critical to policy development.

For example, certain place-specific trade-offs should be considered from a natural-environment versus built-environment perspective. Hanna Love and Tracy Haden Loh of the Brookings Institution highlight the invaluable natural resources that rural areas provide to the world, such as “food production, carbon sequestration, and stewardship of biodiversity and habitat resources.” Yet, these are the same areas that lag in business growth and a consistent rise in standard of living, primarily because of the digital divide. On the other hand, urban areas have the benefit of increased education rates and economic gains but must also manage the costs of industrialization and denser development. Urban areas account for more than 70 percent of greenhouse gas emissions by virtue of accommodating much of the built environment.

In rural and urban areas alike, heat islands and air pollution pose significant risks to health and safety, but the methods by which these challenges are addressed vary depending upon location. For instance, rural communities generally bear the burden of renewable energy project siting, which can span thousands of acres and may or may not provide electricity within the community. Yet, rural areas benefit from access to green spaces and tree coverage. Meanwhile, urban areas have the benefit of walkability and low- or no-carbon mass transportation, but must also cope with high levels of GHG emissions and outdated energy infrastructure. To facilitate an equitable clean energy transition, place-based policy nuances must be considered at the outset so that the costs of climate adaptation and mitigation are distributed fairly.

Climate change policymaking within these defined geographic areas requires a comprehensive analysis that incorporates sociopolitical, geographic, and environmental justice frameworks. Policymakers should define rural and urban areas and their distinctions, assess standard development practices, and reconceptualize environmentalism as a collective good.

The breadth of the rural-urban divide means legislators are tasked with the seemingly insurmountable task of creating dynamic policies with multifaceted implementation techniques.

One monumental opportunity to rise to this challenge is presented by the Infrastructure Act. The legislation seeks to reduce climate change impacts of transportation systems, increase broadband connectivity, and enhance electric grid reliability. Most importantly, it provides for rebuilding America’s roads, bridges, and rails, which is expected to ease inflationary pressure and strengthen supply chains. The Infrastructure Act has also allocated significant funding to addressing many environmental justice concerns related to public participation and local development. However, the act did not go nearly as far as many would have liked in addressing how the climate crisis will be handled differently by urban dwellers and rural populations.

OF the aspects of the rural-urban divide alluded to within the Infrastructure Act, one of the most important is access—to both transportation and information. The act calls for a $100 billion investment in railroads and other forms of public transit, as well as a $65 billion expansion in broadband access. Implementation will be supported by the Department of Energy’s newly established Clean Energy Corps, which seeks to establish a workforce that will bring innovative solutions to the climate crisis. As for transportation, the Infrastructure Act seeks to reduce the climate change impacts of the system as well as increase the use of electric vehicles, making transportation access more sustainable and reliable, especially for urban dwellers. In broadband access, the new funds will help to achieve key procedural environmental justice goals, particularly those related to equal access to and meaningful involvement in decisionmaking.

By connecting economic investment, technological advancement, and sustainable transportation, the Infrastructure Act could enhance access to climate solutions and environmental justice resources. To do so would require guidance that explicitly details how varied communities—wealthy, underprivileged, BIPOC, rural, urban—experience climate change, and defines necessary mitigation and adaptation measures that account for place-based nuances. For example, the Infrastructure Act’s investment in power, grid reliability, and resilience is simply that—an investment. The actual process by which policy is implemented will require federal, state, local, and individual input.

Bridging the rural-urban divide thus requires a base level of procedural knowledge, community engagement, and consensus building. In green-energy development, for example, one of the first steps is equipping community members to participate in public meetings. Green development seeks to foster economic growth and sustainability while considering social and environmental impacts. In most communities in the United States (rural and urban alike), public meetings are a prerequisite to new development approval. The approval process typically begins with the local planning commission, which conducts the preliminary project review. Provided that all stipulations are satisfied and there is not significant public disapproval, the project then moves on to the next governing body, most often the city council or county commission.

Under the current system, land-use planners and community members often operate with limited resources that would benefit from investments under the Infrastructure Act. Local legislators set forth the parameters for new development, but public opinion can make or break a project. Support of and opposition to green development is not a place-specific sentiment; however, incentives and challenges vary along geographic lines. Challenges most often take the form of NIMBY, or “Not in My Back Yard,” complaints. These can be raised for a variety of reasons—both reasonable and otherwise—and take different forms depending on the location. A few geographically distinct examples related to the clean energy transition and environmental justice come to mind.

Consider utility-scale renewable energy projects. The Princeton University’s Net Zero America report estimates that 228,000 square miles—an area larger than Wyoming and Colorado combined—of renewable energy development is necessary to reach net-zero emissions by 2050. In rural areas, utility-scale renewable energy projects are often pitched as economic development opportunities that will revitalize a community. RMI, a clean energy non-profit, projects that 600 gigawatts of new wind and solar will emerge in rural areas between 2020 and 2030. The group suggests that these projects will be valued at approximately $11 billion by 2030. The bulk of financial benefits would take the form of tax revenues collected by local governments and annual wages from construction, operation, and maintenance jobs.

Yet another economic benefit could be the incentive pay that landowners receive for transitioning underutilized land to renewable energy sites. Land-lease payments to rural property owners hosting wind turbines or solar panels on their properties are estimated to generate $2.2 billion annually by 2030. For many landowners, the possibility of passively earning income during the life of a renewable project, which is often 20-30 years, is particularly promising where the property would not be profitable otherwise. This constituency sees renewable energy development as a sound economic investment that happens to also provide environmental benefits. As a result, these stakeholders may often serve as community support advocates for green development.

On the other hand, green development proposals give rise to NIMBY complaints that range from reasonable environmental concerns to a desire to maintain the status quo both aesthetically and economically. Those who raise concerns most often do so in the name of environmental conservation and wildlife habitat preservation, which are certainly legitimate considerations. There are, however, certain nuisance claims that are linked, whether accurately or inaccurately, to potential health effects. Specifically, landowners have pointed to solar panel glare, wind turbine shadow flicker, and noise pollution as causing feelings of stress, disrupting sleep, and triggering seizures. Studies by health departments in Vermont, Maine, and Oregon have acknowledged that health effects of green development are mostly minimal, especially compared to the harmful effects of air pollution, which the transition to renewable energy helps to mitigate.

In urban areas, the same planning and approval processes for sustainable infrastructure must take place—and present similar challenges. In coastal cities, for example, the public debate often centers on retrofitted infrastructure such as seawalls. Seawalls are necessary to prevent erosion and protect against storm surges, but they also disrupt the natural flow of sand and sediment, to the harm of other ecosystems. In urban areas more broadly, green development often raises concerns about disrupting neighborhood demographics as a result of creating large green spaces and installing small-scale renewable energy. Those in support of such projects point to preservation of private property, increased property value, and greater tax revenues as advantages. Those in opposition underscore the trade-offs between protecting the built versus natural environment.

As we grapple with the consequences of climate change, all communities—rural and urban—will play key roles in the clean energy transition. From a renewable energy perspective, rural and urban areas must each contribute to reducing GHGs by shifting reliance on fossil fuels and providing for economic revitalization. To satisfy decarbonization goals, the power sector will need to incorporate utility-scale and distributed energy. The distinction between these energy sources is their proximity to end-users. Utility-scale systems are located farther away from end-users and are connected via transmission lines (often found in rural areas), whereas distributed systems are located at or near the location where it will be used (the primary option in urban areas).

While utility-scale and distributed renewable energy sources provide environmental benefits, they also have some negative environmental impacts. These include aesthetic challenges, land disturbance, and project decommissioning. One of the key distinctions between utility-scale and distributed sources is the energy footprint, or spatial area that they cover. In rural areas, projects can span hundreds or thousands of acres, with facilities as tall as 300 feet. In urban areas rooftop solar panels and small wind turbines have a much smaller footprint, but they often clash with standard residential and commercial facades.

To understand the rural-urban divide beyond the context of NIMBY complaints and the project footprint, take the Blue Creek Wind Farm project as an example. This Ohio facility spans 40,000 acres in Paulding and Van Wert counties, both of which are deemed rural by Census Bureau standards. The project generates 304 megawatts of electricity, enough to power approximately 76,000 homes. The local communities benefit from the $2.7 million annual tax revenues and $2 million in land lease payments, which were negotiated as part of the project approval process. The project provides electricity not only for local rural communities, but for a distant urban area as well.

Ohio State University entered into an agreement with the project developer to purchase 50 MW of wind energy capacity, providing approximately 25 percent of the Columbus campus’s energy needs. This arrangement provides insight into the shared costs and benefits of green development across geographic areas. In Van Wert and Paulding counties, citizens receive economic benefits and a portion of clean energy gains at the expense of disrupted sight lines. Yet, citizens in Columbus reap environmental benefits at only an economic cost. Such trade-offs are the equities that must be balanced as we move towards a clean energy future.

These examples indicate how critical the Infrastructure Act funding—and its provision of access—is to furthering green policy initiatives and bridging the rural-urban divide. The current process for land-use development relies heavily on public input. In rural and urban areas alike, there are community members in support of and in opposition to certain aspects of development. Their level of engagement with the development process significantly depends on access. This means access to broadband, which is especially relevant in rural areas, in order to review project plans, provide comments, attend virtual meetings, and understand the intricacies of green development. It also means access to public transit and other sustainable modes of transportation in order to attend public meetings, which is crucial in urban areas. Beyond the scope of the Infrastructure Act, community members also need access to information and social capital to be engaged public participants.

Meaningful participation in and access to the legislative and development process has been a foundational tenet of the environmental justice movement. From the federal government’s perspective, environmental justice takes a person-centered view, requiring equitable policies no matter one’s race, color, national origin, or income. The nature of the climate crisis necessitates an expansion of the environmental justice framework to also incorporate a place-centered view to equitably address geographic differences.

Because almost all communities can be ignorant or ambivalent about the climate crisis, stakeholders in both the public and private sectors have a responsibility to provide impartial resources for community members to make informed decisions. The International Institute for Environment and Development argues that “adaptation is all about the quality of local knowledge and of local capacity and willingness to act.” Environmental justice is primarily concerned with meaningful involvement of diverse communities. To be an informed participant in the development process at minimum requires a basic understanding that present action or inaction can lead to future risks. Misguided and under-appreciated NIMBY complaints serve as prime examples of the need for community education about green development and policy trade-offs. Community members should be equipped to not only express their policy preferences, but to also inquire as to the potential outcomes where alternative preferences are concerned.

This consideration of alternative preferences is a key component to reframing perspectives on climate change policies. Traditionally, individualism has been the driving force in most policy debates. Yet, the nature of climate change demands collective action and consideration of how one community’s actions or inactions affects another. In a 2021 tweet, Pope Francis shared that “climate change can be faced with a renewed sense of shared responsibility for our world, and an effective solidarity based on justice, a sense of our common destiny, and recognition of the unity of our human family.” Although the individualism versus collectivism debate often plays out on a global scale, it is also relevant when considering energy and environmental justice along rural and urban lines. This disconnect is a major challenge to consensus building and perpetuates a cycle of one area bearing costs at the expense of another.

Environmentalism and the energy transition requires investments and sacrifices in all geographies, with the understanding that green development yields a collective good. For example, urban areas cannot sustain utility-scale projects given the necessary footprint, but they can prioritize distributed renewable energy. To facilitate equitable outcomes, policymakers should consider all costs and benefits, locally and across geographic scales, and recognize that these costs and benefits can differ depending on whether the area is rural or urban.

The time is now to equitably balance the interests of all communities so that climate adaptation costs and benefits are evenly distributed across geographies. Doing so requires policymaking that engages in holistic risk assessments and explicitly acknowledges the need for collectivism and global citizenship in the environmental framework. The Infrastructure Act is a significant first step in balancing equity from a procedural justice perspective, as it provides rural and urban communities with tools to access the development process. Yet there is still significant room for legislation to prioritize geographic and social equity. To effectively bridge the rural-urban divide, we must analyze policy choices through an environmental justice lens that considers the intricacies of various geographic areas while respecting and requiring the input of all stakeholders. TEF

LEAD FEATURE The new infrastructure law offers an opportunity to holistically address the geographic nuances of climate change policy and sustainable infrastructure. Stakeholders have a responsibility to consider place-based distinctions in promoting environmental justice.

Judging in a Changed Climate
Author
Sandra Nichols Thiam - Environmental Law Institute
Paul Hanle - Environmental Law Institute
Environmental Law Institute
Environmental Law Institute
Current Issue
July-August 2022
Issue
4
Sweating judge fanning himself with papers

Climate change is driving a groundswell of litigation in a very broad range of legal categories. These lawsuits are critical not just for the parties in the cases but for the many social impacts that will reach far beyond the specifics of a given controversy. Many of these matters gain urgency in view of the lag in policy responses to the challenges posed by a changing natural environment. Plaintiffs in this wave are asking not so much for novel uses of the law as for applying existing law and precedent to a changed factual context.

When there are such significant shifts in litigation trends, judges typically prepare for the challenge by identifying changes in management and resources they may need—and by seeking education on new issues. Because of the profound implications of climate change and efforts to stem it, and the nature of the science that explains it, today’s judges are seeking just this kind of support. Through ELI’s Climate Judiciary Project, we are meeting the need for specialized education on the science and law of this threat.

Climate change is already affecting every aspect of life. It runs through our environment, society, and economy. Right now, species vanish from the Earth faster as habitats decline, deeper droughts and more severe heat waves afflict communities, sea-level rise places infrastructure and buildings at risk and financially burdens governments, owners, and insurers—all because the oceans and troposphere have grown warmer.

Yet the dynamics of climate change are so difficult to grasp, the impacts so vast and trends so slow, that this severe problem can seem far removed and abstract to most people. Atmospheric carbon increases by only a few parts per million each year. In the same time span, sea levels rise by a few millimeters. The global average temperature has risen but two degrees Fahrenheit in a century and a half. These changes are scientifically significant but virtually undetectable to the average person, making it particularly hard for society to respond with recognition, much less resolve.

The main drivers of these changes, fossil fuels, are integral to our economic system and have also been responsible for unprecedented prosperity. How to disentangle this commodity from global markets and from countries that rely on oil and gas revenues? What to do about oil and gas infrastructure around the world? What about the jobs involved? How do you begin to tackle such a massive challenge? In addition to clashing political views about the proper size and structure of government, and enormous investment by fossil fuel interests to obscure the true situation, these factors have greatly impeded society’s response to climate change despite the scientific understanding coalescing year by year.

Time is precisely what we do not have. With rising trends in sustained droughts, heavier downpours, strong hurricanes, frequent large wildfires, more extreme-heat events, and growing sea-level rise, climate change is already assaulting humanity and Earth’s natural systems—and will only accelerate in its impacts.

All of this is against a backdrop of historic injustice. Benefits of our industrial economy have often disproportionately accrued to the privileged while environmental burdens devolved in outsize portions to the disadvantaged. In a time of social and political transition, historic power structures will tend to be reinforced. Thus, the climate problem poses yet another injustice: impacts are already disproportionately felt by people of color and low-income communities who are least responsible for their creation in the United States and around the world.

While response has been painfully slow, it has already influenced our legal system at every level of government, and across every branch. Sweeping and ambitious attempts—the Waxman-Markey legislation of the 2000s and the Juliana litigation—have failed to gain the resolution their proponents sought. At the same time, a steady flow of less-conspicuous actions in policymaking and in quotidian federal decisionmaking were mainstreaming climate change action. These included legislative and executive actions like the Infrastructure Investment and Jobs Act passed last year and President Biden’s Executive Order on Tackling the Climate Crisis at Home and Abroad. Climate is now a constant in federal environmental and energy law decisionmaking, in environmental assessments, Endangered Species Act listing decisions, and permitting of gas pipelines.

These federal actions are eclipsed by legal developments at the state and local level, where many governments have adopted greenhouse gas reduction targets, developed climate action and adaptation plans, and are investing in renewable energy. Both New York and California, for example, committed to reducing greenhouse gas emissions to nearly zero by 2050, and Hawaii passed a law committing to achieving 100 percent clean energy by 2045. In recent years, the pace of legal activity has intensified and diversified as pressure grew from civil society, (mostly) progressive politicians, and the private sector. Despite political swings, the trend over the last few decades is clear: climate-responsive laws and policies have accumulated over time. Accompanying the steady drumbeat of growing climate impacts, a rule of law of climate change is emerging.

This new body of law and policy related to climate change is developing in response to the challenges—as law has always evolved in response to new circumstances. But it is taking place in the absence of a comprehensive legal and policy strategy. The law and policy transition is accelerating, but scientific evidence and impacts themselves are outpacing this progress. In addition, there remain powerful countercurrents against an emerging consensus. In particular, some in the fossil-fuel industry remain resistant to adjusting to the new realities, with, for example, counter suits over their role in creating a climate crisis.

The courts have a critical role to play in this transformation of society, our economy, and even our governance system. Rights and responsibilities will be rewritten. Duties of care and reasonableness redefined. Government roles reshaped and reallocated. All these are matters to be processed through the courts. Litigation has the benefit not only of addressing the specific controversy between the parties to the case but of uncovering previously unknown efforts to defraud the public, raising the public profile of the issues, and providing an incentive for adaptation efforts as the standard for reasonable behavior changes.

As defined by the Intergovernmental Panel on Climate Change’s most recent report, climate litigation is an attempt to control, order, or influence the behavior of others in relation to climate governance. Some define the category as “litigation motivated by a concern about climate change or climate change policy” and others, such as the Sabin Center for Climate Change Litigation, more broadly as “cases that raise material issues of law or fact relating to climate change mitigation, adaptation, or the science of climate change.” Regardless of where you draw the boundary around these cases, more and more of them are being filed.

As of April 2022, the Sabin Center Database documents over 1,400 climate cases in the United States. The rate of filings is increasing—82 cases were filed in 2017, and the number almost doubled by 2018, with 159 cases filed that year. Total cases nearly doubled between 2017 and 2020, from around 650 to 1,200. The current trajectory of filings, coupled with continual refinement of climate science that yields more robust results, suggests this trend may well accelerate.

Climate litigation involves parties from all levels of government—federal, state, and local—non-governmental organizations, industry and industry associations, and individuals. Plaintiffs pursue an expanding range of legal theories, extending to a wide variety of constitutional, statutory, administrative, and common law claims, at both the federal and state levels. The focus of these claims includes issues related to adaptation, mitigation, and financial risk, with overlap among the issues central to some cases.

While more and more cases are being filed, it seems the courts have treated core questions about climate change response as a hot potato. While Massachusetts v. EPA gave plaintiff states standing and found that the agency was required to regulate carbon emissions from motor vehicles, and the resulting endangerment finding was also upheld, subsequent efforts to carry out this mandate have been hung up. In Connecticut v. AEP, the Supreme Court found that most federal common law claims are displaced by the Clean Air Act, effectively pushing such claims to state courts. In Native Village of Kivalina v. ExxonMobil, the Court held that money damages are also displaced to state courts. When youth plaintiffs in Juliana took a different tack and argued for a constitutional right to a stable environment, the Ninth Circuit demurred, saying that the courts are not a proper venue for addressing climate change. The Supreme Court is currently reconsidering the question of EPA’s authority to regulate carbon emissions in West Virginia v. EPA. In the meantime, many of the state cases seeking to hold parties accountable for climate change have been hung up at the procedural stage.

While small government ideology and continued resistance from fossil-fuel producers played important roles, these decisions reflect primarily that as a society we have not had the requisite reckoning about how we will allocate responsibility for climate change. That reckoning is coming, and the courts will play a critical part in shaping the future governance of our changed environment and society.

Crucial to humanity’s response is scientific understanding of the causes and effects of climate change. This understanding, built squarely on long-understood basic science, has emerged from the careful collective efforts of hosts of experts. Leading scientists such as Inez Fung have dedicated decades to understanding the dynamics of Earth’s atmosphere. Christopher Field of Stanford University and Katharine Mach of the University of Miami have dedicated their careers to understanding the relationships between changes in the climate system and impacts felt on the ground. Benjamin Strauss, CEO of Climate Central, has led research describing the status and trends of sea-level rise and its economic and social implications. And still others, such as Jalonne White-Newsome, document the relationships between climate change and health equity. These findings and many more will be essential to enabling judges to apply laws to the new realities.

Judges will need to understand the science at issue in cases, but they also require a fundamental understanding of what is in store for us from climate change, and why it is happening. To fulfill their role, judges must be able to respond in an informed way to these new challenges. The law, policy, and justice challenges posed by climate change do not require new kinds of law, however. Rather, what is needed here is the clear-eyed application of existing law and precedent with understanding of how completely the entire factual landscape has changed.

At the Environmental Law Institute, we strive to find the best ways to use laws and policies to address society’s environmental priorities. The Institute was established in 1969 to shepherd the development of the new, emerging area of law related to the natural environment. We document and disseminate law and policy trends, and we work with partners to use law and policy to address their problems. For these efforts, we seek the best, most reliable information about scientific facts and effective legal approaches. One thread that runs throughout is our specialized education to support stronger governance.

Prominent is our long-standing program educating judges, which sprang from a request for help in this regard from Judge James L. Oates in his speech accepting the 1989 ELI Award. Starting a year later, judges have come to ELI seeking analysis of foundational and emerging topics related to environmental, public health, and natural resource rights and responsibilities in their jurisdictions. In 32 years, the program has enabled thousands of jurists in 28 countries—including federal and state judges in the United States—to fully and effectively play their role in addressing society’s challenges.

ELI is not alone in using education to advance environmental solutions. Climate Central is another such organization; it researches and reports on the science and impacts of climate change. It too targets influential audiences—such as television meteorologists—as well as the general public.

In 2018, former president of Climate Central Paul Hanle was seeking a new focus for his climate science education efforts. On the climate policy front at the time, the Trump administration was moving to block and undo established policies and programs at every level, pushing much of the action to the courts. In his scoping to identify opportunities to advance climate education, he met with former BP Energy Vice President David Van Hoogstraten, a long-time ELI friend, who suggested the power that might arise from bringing Paul’s climate science education to ELI’s judicial education program.

Recognizing the potential of such a program, but also the challenges associated with introducing a new and potentially contentious topic to the judicial education authorities, who very carefully protect judges from controversy and limit educational programs to only those considered critical to playing their role on the bench, ELI joined with Paul to test if a project on climate science for judges might be possible.

In early 2019, Sandra Thiam returned to ELI after five years abroad, to join Paul’s audacious effort to find out if judges saw a need for education on climate science and to meet that need. Sandy had a track record of educating judges in ELI’s international programs over many years and was excited for the chance to apply her experience to addressing one of the most pressing issues of our time.

Judges are, by definition, generalists. Very few have a background in science. And the science relevant to much climate litigation has only become clear in the last several years, long after any sitting judges completed their education. Lawyers often joke that they chose to pursue law in order to avoid science and math. The joke is not so funny when it affects the outcomes of cases.

The need for judges to understand elements of science is not new. In his introduction to the third edition of the Reference Manual on Scientific Evidence, Supreme Court Justice Stephen Breyer described how scientific and technical issues arise in litigation in our modern society. The manual provides information to judges on common scientific issues. Educational programs on key aspects of science also occur routinely. Common topics include implicit bias, neuroscience, forensics, and technology. These programs are convened by such institutions as the Federal Judicial Center, governed by a body chaired by the chief justice of the United States, as well as independent organizations such as the National Judicial College and the National Center for State Courts.

The project that we envisioned would be true to ELI’s core principles of being apolitical and serving as a technical informational resource without advocating for any policy or legal outcome. And it would further adhere closely to the core of the scientific endeavor—to explain the objective evidence and scientific understanding that climate change is real, human-caused, and has far-reaching and serious consequences for society and the planet. The content of the project would be mainstream science as reflected in assessments and consensus reports of leading scientific institutions such as the National Academy of Sciences, National Climate Assessment, and IPCC. It would focus particularly on the science that judges needed to know for the climate cases that were coming. And to do so, we would engage with the leading experts on these topics to shape their knowledge for presentation to the judiciary.

When we began to introduce the idea of education on climate science—at a judicial education conference on environmental law in Washington in 2018—several judges offered strong encouragement. One participant, a state chief justice, observed that there was a real need for this kind of program—and no one else was doing it. Consultations with leaders in judicial education helped us to understand current priorities. We were soon invited to submit a proposal for cosponsorship with the Federal Judicial Center of a pilot series of climate science seminars for federal judges to test if they thought it was needed. Leading universities around the country stepped up to host the pilot series, each for judges in the federal circuits in their region. We enlisted the aid of the American Association for the Advancement of Science to help us recruit leading scientists and evaluate if what they were presenting matched what judges expected. When we began the pilots, we had many questions about whether judges would see our content as a priority and how to meet their needs. So, we designed the pilots to encourage discussion and feedback from the judges about content and approach.

A long-time partner, the Sabin Center for Climate Change Law at Columbia University, hosted our inaugural program in June 2019 for judges from across the 1st, 2nd, and 3rd federal circuits. They came from western New York and San Juan, Puerto Rico, Boston, and the greater New York area. At our invitation, two New York state judges joined the group.

Radley Horton of the Lamont-Doherty Earth Observatory at Columbia, who had been a convening author of the Third National Climate Assessment, opened the program with lessons on the well-established science explaining why the climate is warming, the body of evidence that confirms it, and some impacts associated with the changing climate. Leading climate law expert and Director of the Sabin Center Michael Gerrard gave the first of many presentations he has contributed to our project, with an overview of trends in climate litigation, the history of litigation over EPA’s mandate to regulate greenhouse gases, the relatively routine environmental law cases, and the high-profile cases brought by cities and states against the oil companies.

While we learned more about sensitivities and interests at each of the five sessions, the enthusiasm for this content amongst the judges was unmistakable from the first. Our participants have consistently expressed the importance of being aware of such a critical new context in order to be able to play their role as judges. Overall, the message from participants has been clear: judges need and want the climate science education that we were delivering, and they are increasingly giving it priority in their continuing education.

The success of the pilots and indeed the project overall has relied on the contributions of dedicated and skilled experts to our programs and materials. Over the course of the pilot series, we worked with leading scientists from nine different institutions to present their expertise for judges. Two other climate litigation experts, in addition to Professor Gerrard, Professors Anne Carlson of UCLA and Dan Farber of Berkeley, gave legal talks during the sessions.

Altogether, in the pilot year, we delivered five half-day sessions to approximately 80 federal and state judges in New York, Washington, Berkeley, Chicago, and Atlanta. In addition to these programs, we were invited to present several sessions at scheduled gatherings of important groups of judges. Most noteworthy, perhaps, was the annual mid-winter meeting of the Ninth Federal Circuit a few days after it handed down the momentous decision to dismiss Juliana, where we delivered the first plenary session to approximately 100 judges including the presiding judges in that case.

Our final session took place in Atlanta on the fateful day of March 13, 2020, and was attended by judges from the 4th and 5th federal circuits as well as from North Carolina. Professor Gerrard joined scientists Karen Levy, Kim Cobb, and Marshall Shephard for that session. In spite of the world closing down over Covid, our program went ahead as planned with good attendance, a testament to the importance of this issue to judges.

By the time the pandemic spread, we had presented our program to judges from almost all of the federal circuits and four states. It was clear that there was a demand for the content. In response, we launched the Climate Judiciary Project.

The Climate Judiciary Project exists to serve the needs of the bench and relies on the contributions of climate scientists and legal scholars. Since its inauguration, we have attracted the support of leading federal and state judges, who connect the project with opportunities to reach more judges and to develop educational materials to meet their needs. We have expanded our partnerships to include the National Judicial College and the National Center for State Courts, as well as the Conference of Chief Justices. Through these groups, we have a steady stream of invitations to give presentations of various lengths, both virtually and in person, in different parts of the country.

One particularly exciting program is Judicial Leaders in Climate Science, a partnership with the National Judicial College. It is a year-long program with a cohort of 23 state judges that combines climate science and leadership. Coming from a very wide range of backgrounds from states and territories around the country, the group responded with great interest to the leadership and science curriculum we presented in March. Many of the participants told us how much they appreciated the information about how climate scientists validate climate facts. Even more jurists appreciated connecting with science presenter Benjamin Santer on a personal level, and understanding the values and rigorous scientific way that he has responded to challenges to his work. The group left the first session eagerly anticipating future gatherings, most notably a deeper dive into the science in Woods Hole in September.

Engaging directly with the judges on these topics is the most powerful way of sharing climate science information they need to apply the law to these new realities. Written materials will allow us to deepen our impact. After several years of conducting programs, we have polished our content and messaging and are developing a first-of-its kind curriculum designed explicitly to meet judge’s needs for understanding climate science that is relevant to litigation.

The work is overseen by a distinguished advisory committee of 13 leading judges, scientists, and legal scholars—the top-tier of such leaders in the nation. We draw our content from the established literature of the nation’s and the world’s expert climate scientists, represented by the extensively validated reports of the National Academy of Sciences, the National Climate Assessment, and the Intergovernmental Panel on Climate Change (a program of the United Nations and World Meteorological Organization).

The curriculum includes information on both the specific areas of climate science that are likely to arise in cases and their methodologies—in particular emphasizing how norms of science differ from norms for the legal process and how climate scientists know what they know. Topics range from basic climate science, climate justice, impacts, attribution, and solutions to the uses of this science in administrative law, procedure, tort litigation, and other kinds of cases. Each module is being written by leading experts on the topic.

Whether through dissemination of modules of the curriculum, or by delivery of seminars and webinars, in the next three years we will focus our outreach on states and federal jurisdictions where cases will be heard. And in addition to the scientists who have already become CJP partners, we are also developing a cadre of outstanding senior and mid-career scientists with expertise on the topics critical to upcoming litigation to lead our seminars.

The trajectory of climate impacts will continue to increase for the foreseeable future. Efforts to use the law to stem greenhouse gas emissions and to adapt to these impacts will continue and ensuing controversies will be brought to court. We need judges to help make sense of rights and responsibilities in this new world.

To be able to do that, they need to become familiar with the chains of causation and trends of impacts that scientists are continuing to refine and verify. Our children are faced with the challenges of our legacy of climate change. But they have the benefit of receiving a clear scientific understanding of the unequivocal nature of human-caused warming. Vast scientific effort has given us this opportunity. Jurists currently on the bench, along with the rest of society, are just catching up to these realities. We will look to judges to sort out rights and responsibilities in the coming energy transition. The Climate Judiciary Project is supporting the bench in this process, providing the connection to the scientific community that jurists need to respond to our changing environment. R&P

ELI Policy Briefs represent the conclusions of the ELI Research & Policy Division. They first appear in the Forum and are later distributed in booklet form to other professionals, key decisionmkers, and the public.

ELI POLICY BRIEF No. 17 Spurred by government actions and court decisions—and accompanied by a drumbeat of growing impacts—a rule of law of climate change is emerging. ELI’s Climate Judiciary Project is preparing the bench to understand the science and ensure justice in the new legal environment.

The Environmental Argument for Less Meat in Your Diet
Author
Stephen R. Dujack - Environmental Law Institute
Akielly Hu - Environmental Law Institute
Environmental Law Institute
Environmental Law Institute
Current Issue
July-August 2022
Issue
6

Just over a half-century ago, Diet for a Small Planet, Frances Moore Lappé’s surprise best seller, exposed the harms of animal agriculture to a wide audience in the same way that Rachel Carson’s book of a decade earlier, Silent Spring, put to widespread shame the practice of applying pesticides to cropland. The title of Moore Lappé’s book encapsulates her thesis. The math in 1971 made a compelling case that abandoning meat is indeed necessary to avoid crossing planetary boundaries.

And we have up-to-date figures that confirm her conclusions. As revealed in a Sidebar to be published in our next issue, by Harvard’s Sparsha Saha, “Animal agriculture uses 83 percent of all available farmland on the entire planet . . .yet it produces just 18 percent of our calories and 37 percent of our protein.” The numbers are from a 2018 article by Oxford University’s Joseph Poore and Thomas Nemecek published in Science. Their report takes a comprehensive look at the world’s food system.

The scholars conclude that meat farming produces a majority of agriculture’s harmful climate effects. Indeed, as Poore and Nemecek state, “Converting grass into [meat] is like converting coal to energy. It comes with an immense cost in emissions.” Avoiding animal products entirely could reduce an individual’s effect on the climate system from growing food by 73 percent.

In reporting on this research, The Independent concluded that cutting out meat and dairy “is probably the single biggest way to reduce your impact on planet Earth, not just greenhouse gases, but global acidification, eutrophication, land use, and water use.”

Poore believes a labeling system can drive consumer behavior toward less meat. “The problem is, you can’t just put environmental labels on a handful of foods and look to see if there is some effect on purchasing,” he says. “Consumers take time to become aware of things, and then even more to act on them. Furthermore, the labels probably need to be in combination with taxes and subsidies.” He is still positive on the concept: “My view is that communicating information to consumers could tip the entire food system toward sustainability and accountability.”

In that regard, a bar chart published at ourworldindata.org highlights the problems of growing meat. It portrays the greenhouse gas emissions per unit of food type sorted by product weight. The conclusion is obvious: with a few minor exceptions, animal protein is more climate affecting than is protein derived from vegetable sources.

Beef is literally off the chart, more than twice the emissions per kilogram of product than the next highest food source. Indeed, beef has 40 times the climate impact per kilogram as does rice, and almost all other animal foods show a smaller but still substantial discrepancy. This is in addition to other resources that it takes to raise animals, including over 450 gallons of water to produce every McDonald’s Quarterpounder.

According to Poore and Nemecek, if humanity gave up animal agriculture, “Global farmland use could be reduced by 75 percent, an area equivalent to the size of the U.S., China, Australia, and the EU combined.” In other words, The Independent concludes in reviewing their research, “Not only would this result in a significant drop in greenhouse gas emissions, it would also free up wild land lost to agriculture, one of the primary causes for mass wildlife extinction.”

Even Consumer Reports is making the case for eating less meat and dairy. It reports on a Nature Food article that calculates “the way we grow, transport, and consume food accounts for about a third of the planet-heating gases created by humans, with animal-based foods causing twice as much as plant-based ones.” The magazine notes that “beef alone accounts for roughly half the emissions linked to U.S. diets but provides just 3 percent of the calories.”

Beef comes up once again in research out of Johns Hopkins University showing that plant-based fake meats have a “carbon footprint about 90 percent smaller than beef’s,” according to the magazine. “On the other hand, they are “1.6 to 7 times more energy-intensive then tofu, peas, or other less processed plant proteins.”

Every little bit helps. You can reduce the amount of meat in your diet as a first step—smaller portions or meatless days. You can make meat a side dish instead of the main course. You can make vegetable combos with morsels of meat in a supporting role. If you are looking for recipes, Diet for a Small Planet has several nourishing dishes in the meals it presents, although it is not the latest word on the input ratios in a healthy diet.

All environmental professionals should be aware that the latest data on the harms of animal agriculture are clear and compelling. Meaningful actions in response are simple—and delicious. —Stephen R. Dujack, Editor

 

Food Staples for Thought

Rice is a primary food source for more than half of the world’s population—especially in Asia, Africa, and Latin America. In China, the rice-consuming culture I’m most familiar with, rice is breakfast, lunch, dinner, and dessert. Even the Chinese character for “cooked rice” simultaneously means “food.” Rice is security, sustenance, and life itself.

It’s also one of the crops most vulnerable to climate change. A 2018 study led by Chunwu Zhu revealed that higher atmospheric carbon dioxide levels cause a decrease in nutrient levels of rice. The researchers found that at levels of about 580 parts per million, several B vitamins—crucial for bodily functions like nervous system regulation, metabolism, and immune response—decreased by 13 to 30 percent. Protein declined by an average of 10 percent; iron by 8 percent; and zinc by 5 percent. “Everything is becoming more like junk food,” David Wallace-Wells writes of this phenomenon in The Uninhabitable Earth.

How does this happen, given that carbon dioxide, the key input for photosynthesis, theoretically should promote more plant growth? It turns out that more plant mass isn’t always a good thing. While carbon dioxide does stimulate carbohydrate production, it doesn’t do the same for nutrients. The result is “a dilution effect of the nutrients in the grains,” says biologist Lisa Ainsworth, as reported by the UN Environment Programme.

“Acting just through that single crop, rice, carbon emissions could imperil the health of 600 million people,” Wallace-Wells reports. It’s a dire problem deserving of more attention. Already, millions of people are food-insecure. Two billion “have deficiencies of important micronutrients such as iron, iodine and zinc,” writes one of the study authors Kristie Ebi in The Conversation. These nutritional climate effects will only intensify existing health burdens.

They are also not the only risks to rice production. Rising temperatures, increased flooding, saltwater intrusion, and drought all reduce yields of the staple food. Moreover, a 2021 study in Science of the Total Environment found that higher temperatures increase rice’s uptake of arsenic, a toxic metal.

Just to complicate the issue even more, rice is actually itself a source of the potent greenhouse gas methane. While alleviating climate risks to rice, we also need to consider practices like alternate wetting and drying of rice fields to mitigate these emissions.

In response to these many challenges, Ebi calls for investments in further research to better understand the effects of climate change on rice and nutrition. Plant breeding for resiliency, genetic modification, and nutritional supplements are additional ways to address the issue. Still others have called for water-saving techniques to cope with drought.

Meanwhile, carbon emissions continue to shoot up—reaching a record high of 421 parts per million in May—as we burn ever-increasing amounts of fossil fuels. Debates on carbon-capture technologies aside, many of the changes we’ve brought on to the world’s most important staple food are irreversible. As the Chinese proverb goes, the rice has already been cooked. Actions taken cannot be undone. —Akielly Hu, Associate Editor

Notice & Comment is the editors’ column and represents the signatory’s views.

 

They Are Everywhere. They Last Forever. They Harm Health

Because of their widespread use, release and disposal over the decades, PFASs show up virtually everywhere: in soil, surface water, the atmosphere, the deep ocean—and even the human body. The U.S. Centers for Disease Control and Prevention’s web site says that the agency has found PFASs in the blood of nearly everyone it has tested for them, “indicating widespread exposure to these PFAS in the U.S. population.” Scientists have found links between a number of the chemicals and many health concerns—including kidney and testicular cancer, thyroid disease, liver damage, developmental toxicity, ulcerative colitis, high cholesterol, pregnancy-induced preeclampsia and hypertension, and immune dysfunction. —Scientific American

Decades of federal housing discrimination did not only depress home values, lower job opportunities and spur poverty in communities deemed undesirable because of race. It’s why 45 million Americans are breathing dirtier air today. . . . Redlining was outlawed more than a half-century ago, but it continues to impact people who live in neighborhoods that government mortgage officers shunned for 30 years because people of color and immigrants lived in them. —Washington Post

The Editors on What's on Professionals' Plates

Addressing Global Energy Crisis While Fighting Climate Change
Author
Bob Sussman - Sussman and Associates
Sussman and Associates
Current Issue
July-August 2022
Issue
4
Bob Sussman

The war in Ukraine and an alarming spike in oil and gas prices are posing a seemingly insoluble conflict between climate goals and the geopolitics of global energy markets. Up to now, reducing dependence on oil and gas has been the lynchpin of decarbonization strategies in developed countries, and industry giants have been under pressure to curtail oil and gas investment and shift capital to low-carbon businesses. But the world is now confronting acute oil and gas shortages, with European economies cutting ties with Russian suppliers, energy demand surging as countries rebound from the pandemic, and inflation driving up prices at the pump.

On the defensive politically, the Biden administration has become a reluctant proponent of boosting oil and gas supplies. It has urged the industry to increase its rig count on leased federal lands and retreated from its opposition to new oil and gas leasing. It has also signaled openness to approving new pipelines that have been stalled because of environmental concerns. Most importantly, to help our allies replace Russian natural gas, the president has pledged to increase LNG exports to the European Union. This will necessarily mean increases in U.S. gas production, building of new export terminals, and additional pipeline capacity.

Despite bipartisan support for helping our beleaguered European allies, undercurrents of concern have rippled through the advocacy community and its allies on Capitol Hill. They fear that greater natural gas production will result in higher methane releases, jeopardizing achievement of U.S. emission reduction goals, and will prolong dependence on fossil fuels, slowing adoption of carbon-free energy sources.

It would be unwise to dismiss these concerns and downplay the threat of climate change. The science of global warming remains compelling and the disruptive impacts of rising temperatures are becoming ever more severe. The Russian invasion of Ukraine is an economic and humanitarian disaster, but unmitigated climate change would be a disaster as well. Steep reductions in burning of fossil fuels offer the only protection against the worst impacts of climate change, and cannot be postponed indefinitely.

However, oil and gas remain deeply embedded in the global economy and it is simply not possible to ease energy supply shortages and soaring prices by immediately transitioning to renewable power. With U.S. allies putting their economies at risk to demonstrate solidarity with Ukraine and punish Russian aggression, finding alternate sources of fossil fuels is a moral imperative. The United States has abundant shale resources and world-class production technology and should do its part. Replacing Russian gas with supplies from the United States, Qatar, or the North Sea would not increase total production but simply shift output from one region to others. As a result, global emissions should not increase. If high-emitting operations in Russia are replaced by better-controlled facilities in the United States, emissions could in fact decline.

The European Union, where climate policy is less contentious than in the United States, has announced an energy plan that emphasizes more support for energy efficiency, wind and solar coupled with increased purchases of LNG from non-Russian suppliers. The plan includes financing for new import terminals and pipelines to replace obsolete Russian-linked infrastructure. However, it envisions that overall gas consumption would decline over time as growth in renewables reduces demand.

In the more polarized United States, energy politics is often a zero-sum game, with competing factions advocating either strong climate policies or increased support for fossil fuels but never both. Thus, Republicans have blamed Biden climate policies for oil and gas shortages and high prices, while Democrats have sought to curtail production of these fuels to accelerate adoption of renewables and electric vehicles. These competing agendas have largely canceled each other out, creating gridlock in U.S. climate and energy policy. Even modest measures to reduce emissions remain on the drawing board and ambitious climate goals are now effectively out of reach.

The current crisis, however, may provide an opportunity to combine elements of both agendas. The highest priority for reducing carbon emissions is enacting the clean energy tax incentives in the president’s stalled Build Back Better package. To secure support for this legislation from Senator Joe Manchin (D-WV) and some Republicans, Democrats could agree to incentives for new oil and gas infrastructure to replace Russian sources of supply in world markets and lower energy prices at home by better balancing supply and demand. This tradeoff would not be a complete win for die-hard climate or fossil fuel advocates but would be far better than the status quo.

Addressing Global Energy Crisis While Fighting Climate Change

Listing Investor and Environmental Benefits of Climate Disclosures
Author
Joseph E. Aldy - Harvard Kennedy School
Harvard Kennedy School
Issue
4
Joseph E. Aldy

The Securities and Exchange Commission proposed a regulation that would mandate reporting on climate-related risks by publicly traded companies. Building on the traditional financial disclosure requirements for such firms—standardized reporting of revenues, expenses, profits, and factors that have a “material impact” on the financial outlook of the company—climate-related risk disclosure would improve the efficiency of equity markets and promote more ambitious decarbonization efforts.

Whether a household deciding how to invest savings in a 401(k) retirement plan or the California Public Employees Retirement System, investors typically face an information problem: how to distinguish the potential returns and risks among a large number of publicly traded companies. Collecting and processing such information may be challenging. The corporate managers, making decisions with the resources provided by investors, may not necessarily maximize the return to those investors (e.g., suppose company employees always fly on private jets, enjoy large expense accounts, etc.). Mandating and standardizing disclosures can lower the costs of monitoring by investors and ensure that top officials’ actions in running a firm are better aligned with the principal’s investment objectives.

As more investors focus on the climate impacts of their investments, demand has grown for information about companies’ risks associated with climate change. Some investors view disclosure as an opportunity to spur more aggressive actions to cut emissions, while others are concerned that the failure to measure climate-related risks means that many companies are insufficiently managing them. And as corporate leaders announce ambitious climate goals­—such as net-zero emissions—investors seek out more information about the measurement and implementation of such goals.

The current mix of company-specific reporting of climate goals (often in annual ESG reports) makes it difficult to undertake apples-to-apples comparisons among corporations. With standardized information under a SEC disclosure rule, shareholders can more efficiently allocate their investments in those companies with more ambitious and substantial programs for reducing climate-related risks.

Recent scholarship provides evidence that investors consider climate-related outcomes in their investment decisions. An evaluation of the United Kingdom’s 2013 disclosure mandate, which required publicly traded companies to report their greenhouse gas emissions, showed that UK-based firms reduced their emissions 16 percent relative to otherwise similar European-based firms that were not subject to disclosure. After the disclosure mandate entered into effect, institutional investors reduced their holdings of carbon-intensive U.K. companies. For large, U.S. exchange-listed companies, cutting emissions resulted in stock price premiums: reducing emissions 10 percent resulted in a four percent increase in a company’s price-to-earnings ratio over 2016-20.

Compelling companies to report on their emissions and activities to reduce emissions, including the acquisition of offsets from projects beyond the corporate footprint, may also induce greater environmental integrity in these activities. Critics of corporate environmental goals have often labeled these efforts as “greenwashing.” Disclosure will establish standards on data collection, scenario analysis, and goal-setting and implementation that will provide the transparency to distinguish good-faith efforts to cut emissions from purely public relations activities.

Placing conditions on the reporting of the environmental integrity of emission offsets may facilitate more rigorous rules governing the development and verification of emission reductions associated with offset projects. For example, the SEC proposal suggests that corporations that purchase offsets based on reducing deforestation in a given area may be liable for the emissions that may result if that area burns in a forest fire at some later date. Alternatively, firms could demonstrate the environmental integrity of the offsets that they hold by carrying emission-based insurance policies.

By enhancing the transparency on offsets, disclosure requirements could spur technological and financial innovation that would improve the environmental outcomes associated with offsetting activities. Greater assurances on the environmental benefits of offsets, and more transparency, could also spur more liquid and more efficient offsets markets.

However, mandating climate risk disclosure is not a substitute for more comprehensive policies. This regulation would not prevent companies covered by disclosure requirements from selling carbon-intensive assets to those firms that are not covered by the rule (e.g., privately held companies), or outsource emission-intensive activities to their supply chains.

Listing Investor and Environmental Benefits of Climate Risk Disclosures

Slowly but Surely Back to State Court to Try the Climate Suits
Author
Bethany A. Davis Noll - NYU Law's State Energy and Environmental Impact Center
NYU Law's State Energy and Environmental Impact Center
Current Issue
July-August 2022
Issue
4
Bethany A. Davis Noll

Facing infrastructure problems, weather damage, and adaptation needs, states and cities around the country have brought a slew of cases in state courts against fossil energy firms. The governments argue that the companies lied about the harms of their products, and seek damages under tort, nuisance, and other state-law doctrines. Defendants removed those cases to federal court and plaintiffs want to get back to state court. Last year, in BP v. Baltimore, the Supreme Court added an additional hurdle for plaintiffs. But since then, the cases have all been marching their way back to state courts.

Defendants can “remove” a case to federal court if plaintiffs alleged a federal claim or question. Courts look at the face of the complaint to decide if that is the case. But federal courts cannot improperly elbow state courts out of deciding state-law issues.

In late May, the First Circuit became the latest appeals court to send a case back to state court. Rhode Island alleged that the defendant energy firms contributed to climate change, which is “wreaking havoc on the state’s infrastructure and coastal communities.” Defendants argued that the state-law claims belong in federal court because of federal common law interests in addressing “transboundary pollution.” But in two earlier cases where plaintiffs attempted to use the federal common law to hold defendants responsible for the harms of their emissions (Native Village of Kivalina v. ExxonMobil and Connecticut v. AEP), a similar group of defendants convinced the courts that federal common law claims did not exist because they are displaced by the Clean Air Act. Those non-existent federal claims cannot now take precedence over state law claims.

The First Circuit also rejected the argument that the CAA displaces the state-law claims. The relief that Rhode Island seeks is sufficiently different from what federal law can do (a uniform rule on emissions) that defendants’ argument cannot hold. In fact, the CAA explicitly preserves state-law claims in the area. Defendants argued that federal jurisdiction is warranted for the additional reasons that their drilling occurred in a “federal enclave” and offshore, allowing removal under the Outer Continental Shelf Lands Act. But both arguments failed. Enclave jurisdiction does not apply, because the deceptions and damages that plaintiffs allege are outside of federal areas.
OCSLA jurisdiction does not apply because the allegations go beyond drilling and include marketing and promotion of fossil-fuel products.

Defendants also tried for admiralty jurisdiction, but the appeals court rejected that because the injuries and misleading behavior are land-based. Finally, bankruptcy issues belong in federal court. But the possibility that some of the companies might have inherited bankruptcy liability or would be undergoing bankruptcy proceedings did not justify removal because bankruptcy will not be at stake in the cases.

Two other circuit courts issued decisions in April. The Ninth Circuit plaintiffs are San Mateo and Marin counties and City of Imperial Beach. They complain about erosion and infrastructure damages caused by climate change. The court’s decision is very similar to the one that the First Circuit later issued. For example, for OCSLA jurisdiction, the court explained that the alleged deceptions did not happen on the outer continental shelf, but rather on land. And the court cited the “deeply felt and traditional reluctance” to keep federal courts from improperly expanding jurisdiction into areas of state law.

In the Fourth Circuit, Baltimore argues that it has suffered injuries to public health and storm damages due to defendants’ “collective conduct.” Defendants met the same fate as they did in the Fourth and Ninth Circuit. In February, the Tenth Circuit came out the same way in remanding a case brought by Boulder, Boulder County, and Sam Miguel County in Colorado.

There are some remand motions still pending. Minnesota’s motion is pending in the Eighth Circuit. Connecticut’s case is pending in the Second Circuit and Vermont and New York City’s cases are winding their way up. Meanwhile, though Massachusetts’s climate case is proceeding ahead in state court, a separate hurdle came up because Exxon invoked the state’s anti-SLAPP statute in an attempt to dismiss the case. The statute protects people exercising their “right to petition” the government from meritless lawsuits that are meant to intimidate. Exxon claimed the statute applied because at least some of the statements it made trumpeting the benefits of fossils fuels were meant to influence regulators and lawmakers. But in late May, the Supreme Judicial Court of Massachusetts held that the statute does not apply to the state attorney general’s actions.

As the Fourth Circuit explained in its decision, the “impacts of climate change undoubtedly have local, national, and international ramifications,” but the weight of decisions now seems to hold that state courts are well able to handle it.

Slowly but Surely Back to State Court to Try the Climate Suits

Urgency is Required in Tackling Extinction, Biodiversity, Climate
Author
David P. Clarke - Writer
Writer
Current Issue
July-August 2022
Issue
4
David P. Clarke

For the numerous plant and animal species endangered by human activities, 2022 could be a crucial year. That’s because this year three big international meetings are in play, potentially leading to much-needed actions.

In early November, the United Nations Framework Convention on Climate Change will hold its 27th session of the Conference of the Parties, or COP 27. Later that month, the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) will hold COP 19. And the Convention on Biological Diversity’s COP 15 was scheduled for October, although a new date is pending. At the CBD meeting, conferees are expected to adopt a post-2020 global biodiversity framework to replace the CBD’s Aichi Targets that for the most part have not been met.

While CITES’ remit is to control international trade in listed species to prevent overexploitation that would threaten their survival in the wild, the treaty is inextricably enmeshed with the broader climate change and biodiversity crises. Thus, with the three COP meetings, “It’s a big year,” says Tanya Sanerib, the Center for Biological Diversity’s international legal director. Because they are all happening at once, “How this all works together is the question of 2022.” At one level, CITES covers trade in tree species, thus overlapping with the significant climate change issue of deforestation. In addition, the more than $320 billion legal wildlife industry is associated with a carbon footprint from tons of shipping.

Getting climate into the CITES context is difficult because the treaty is narrow, but “we can’t sever biodiversity and climate,” Sanerib says. Getting government agencies out of their silos is essential, “and that’s happening,” she adds, though urging more creativity. In January 2021, President Biden committed to conserving 30 percent of U.S. lands and waters by 2030, a program explicitly aimed at combatting both the climate change and biodiversity crises. This April he announced a new $1 billion program to boost the 30 X 30 species recovery effort for this decade.

In response to a 2021 U.S. Fish and Wildlife Service request for comments on recommendations the United States might bring to CITES COP 19, a letter submitted by 15 conservation groups emphasized the “alarming” impacts that climate change and ecosystem collapse are having on the natural world. They cite a 2019 report by the 140-nation Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), which found that species extinction is accelerating globally faster than at any time during the past 10 million years as a result of land and sea use changes, climate change, direct exploitation, and other drivers.

CITES is failing to protect flora and fauna from the “non-climate stressor” of over-exploitation, the conservationists wrote in calling on FWS to take an approach that is more “bold and ambitious” than the Service’s approach to CITES listings in the past. By taking such a posture, FWS can minimize one major stressor and thereby increase endangered species’ future resilience to climate change, the groups wrote.

But at a time when FWS is being asked to step up its CITES efforts, many in the conservation community are frustrated by the lack of time for necessary in-depth discussions of conservation issues at CITES intersessional meetings, Sanerib says. Because the COP 19 agenda is so packed, FWS might not recommend any additional actions in November, a possibility raised in an earlier Federal Register notice. There, FWS references a significant number of on-going discussions and describes various issues on which the United States is “still undecided” about whether to submit proposals. Conservationists advocate restructuring CITES meetings as part of the “transformative change” the IPBES called for to halt the global extinction crisis.

An issue receiving significant attention is how CITES can reduce zoonotic diseases, such as Covid-19, which has killed more than six million people worldwide from over 500 million cases. Climate experts say such diseases will worsen as the planet warms and more habitat is destroyed. FWS’s notice states that a significant number of CITES-listed animals have “zoonotic potential,” and the United States believes CITES offers opportunities to reduce such risks.

However, in an April 15 letter to the U.S. CITES leadership team, seven conservation NGOs recommended maintaining CITES’ original mandate targeted at species overexploitation. Reducing future zoonotic disease risks is a dire need, the groups agree. But expanding the mandate to address such risks would burden nations’ workloads and inadequate budgets at a time when they must “tackle the extinction crisis with urgency.”

Urgency Is Required in Tackling Extinction, Biodiversity, Climate

Using Mutlilateral Development Banks to Meet Paris Climate Targets
Author
Theresa Trillo - Lewis & Clark Law School
Lewis & Clark Law School
Current Issue
July-August 2022
Issue
4
white wind turbines against a cloudy sky

With the effects of climate change and catastrophic weather conditions on the rise, the U.S. government must do everything in its power to address the crisis. As a major contributor of greenhouse gas emissions, and thereby a large contributor to global climate change, the United States has not taken significant steps to address the issue.1 The country suffers from billions of dollars in direct losses from climate-related events, but only allocates 0.07 percent of the federal yearly budget to other governments and international organizations to support international climate change efforts.2 This relatively small contribution suggests that the United States could and needs to do more to address the global climate crisis.

The Joseph Biden administration strives to make climate change a top priority—a tremendous improvement when compared to the inaction and disregard of the Donald Trump administration. On January 27, 2021, President Biden issued his Executive Order on Tackling the Climate Crisis at Home and Abroad.3 The Executive Order opens by declaring:

The United States and the world face a profound climate crisis. We have a narrow moment to pursue action at home and abroad in order to avoid the most catastrophic impacts of that crisis and to seize the opportunity that tackling climate change presents. Domestic action must go hand in hand with the United States’ international leadership, aimed at significantly enhancing global action. Together, we must listen to science and meet the moment.4

In addition to recognizing the climate crisis and the importance of the United States’ role in addressing it, the Biden administration emphasizes using multilateral principles to approach policy decisions.5 Scholars have urged the administration to focus on the role of multilateral development banks6 to put multilateral principles into practice and address global issues such as climate change.7 Similarly, during the Carbis Bay Summit, the Group of Seven—including the United States—called upon MDBs to increase their climate finance and publish a plan to fully align with the objectives of the Paris Agreement.8

Like the United States, the United Nations plays an international role in leading climate change efforts. The U.N. estimates that two to three trillion dollars will need to be invested per year within the energy, infrastructure, agriculture, health, and education sectors in developing countries to achieve the Sustainable Development Goals—often referred to as the “infrastructure financing gap.”9 Experts believe this gap needs to be addressed within emerging economies to combat the effects of climate change.10 MDBs can play a significant role in addressing climate change11 by partially funding the infrastructure financing gap.12 The G7 recognizes that current funding and financing approaches are inadequate in addressing the gap, and that MDBs should work to increase the mobilization of their capital for sustainable infrastructure.13

MDB decisions and policies have the potential to mitigate climate impacts and lower global GHG emissions. MDBs finance projects in many emerging economies with fast-growing emissions, and the majority of coal power development occurs in emerging economies.14 In 2010, GHG emissions from developing countries accounted for more than one-half of all global emissions, and they continue to increase yearly.15 This increase coincides with positive developments in developing countries, such as a decrease in poverty rates and an increase in access to safe drinking water.16 MDBs can play a significant role in reaching the economic and social development required for developing nations to reach net-zero carbon emissions.17

Although MDBs have the potential to help achieve Paris Agreement climate targets, there are many criticisms surrounding their actions, leaving significant room for improvements. Without a clear definition of the concept of sustainability or empirical indicators of sustainability,18 MDBs are presented with challenges of measuring the sustainability of their development projects, meeting their development goals, and cutting their GHG emissions.19 MDB infrastructure projects often include sectors that account for large amounts of global GHG emissions—further illustrating the conflict between development and climate change contribution.20 For instance, energy consumption—including transportation, electricity and heat, buildings, and manufacturing and construction—accounts for 73 percent of global GHG emissions.21 Other sectors that also produce a large amount of GHGs include agriculture, land use, and forestry.22

Essentially, developing countries and MDBs face unique challenges with respect to climate change because they must develop in a sustainable way. As an example, developing countries should not rely on fossil fuels for energy development, and must go straight to reliance on renewable energy sources. Practically speaking, the institutions funding development projects in these countries need to consider these challenges to ensure a more sustainable future for development. The Paris Agreement and SDGs exist to address these challenges, and the MDBs can work to align themselves with both.

This article explores how the United States can use its power and vote to align MDBs with the goals of the Paris Agreement. More specifically, it outlines some of the key elements that the Biden administration’s strategy toward MDBs should contain, including focusing on transparency, tracking GHG emissions for each project funded by an MDB, and setting science-based targets for their GHG emissions. The first part provides an overview of how the MDBs are organized and operate, along with some criticisms of MDBs and their operations. Part two discusses the U.S. role in MDBs and policies toward MDB involvement. Part three explores how the United States can assist in aligning MDBs with the Paris Agreement given §§102(f) and 102(g)(ii) of the Executive Order, and provides key elements for the strategy.

Overview of MDBs

Development banks provide capital and advisory services for infrastructure projects, businesses, agriculture, and other sectors where financial needs are not being met by the public sector, commercial banks, or capital markets.23 These banks often receive public funding or initial capital from public resources.24 Development banks can be international (e.g., the World Bank) or regional (e.g., the Asian Development Bank).25

This article focuses on MDBs, international financial institutions that have been established by more than one country in order to support development in developing countries.26 MDBs usually provide assistance through a loan or grant, with the aim of promoting economic and social development.27 The loans and grants distributed by MDBs often supply funding for large infrastructure projects (e.g., roads, dams, and power plants) and policy reform (e.g., reform in agriculture or electricity-sector policies).28 MDBs tend to finance projects through equity investments, long-term loans, and guarantees.29 MDBs can be further categorized as global, regional, or subregional.30 Global MDBs provide assistance across several regions, achieving a wide geographical scope, whereas regional development banks only operate across one region.31

Mandates, Operations, and Organizational Structure

MDBs operate within mandates set by their establishing countries. Most of these mandates were established in the 1960s but have expanded over time.32 Today, many MDBs’ mandates call for sustainable economic development.33 Infrastructure is the largest sector supported by MDB projects; transportation and energy serve as two examples of MDB-supported infrastructure projects.34 MDBs help secure global public goods, including climate health, public health, and security.35

One must understand the organizational structure of MDBs and how they actually operate. The World Bank, for example, exercises autonomous control over decisionmaking procedures, sources of funding, administration, and budgetary needs, despite the fact that it is a specialized agency within the U.N.36 Regional development banks, on the other hand, act as independent international agencies unaffiliated with the U.N.37 Despite this, regional development banks must comply with directives, such as economic sanctions, voted on by the U.N. Security Council.38 Despite the directive power the U.N. Security Council has over MDBs, they are not subject to decisions by the U.N. General Assembly, nor are they subject to decisions by other U.N. agencies.39

MDBs have similar internal organizational structures; each has its own management staffed with international employees and each has its own supervising board of governors and board of executive directors.40 Each MDB’s board of governors makes major policy decisions ranging from day-to-day delegation of duties to lending and amending founding documents.41 Significantly, some major donors have their own executive director on the board of executive directors to represent their interests.42 The United States has its own executive director, while smaller member countries are represented in groups by one executive director per group.43 MDB executive boards typically meet weekly to consider loan and policy proposals and oversee bank activities.44

Like many institutions, the decisionmaking process within MDBs occurs by vote. Member countries’ voting shares are weighted based on cumulative financial contributions, among other commitments to the organization.45 Figures created by the Congressional Research Service indicate that the United States carries between 5 percent and 30 percent voting power in a number of MDBs, even clearing the voting power threshold for major policy decisions for the Inter-American Development Bank and World Bank.46 The United States carries enough power to veto major policy decisions at both of these banks, but cannot veto small decisions like the granting of individual loans.47 Each MDB has its own set of policies and practices, as well.

MDBs have safeguard systems48 that define each bank’s policies, principles, and operational requirements with respect to the environmental and social impacts of their development projects.49 The most common safeguards among MDBs are those involving the environment and sustainable development.50 Most MDBs also have policies in place to establish public communication or disclosure.51

MDB safeguard systems typically include several key components.52 One key component is an overarching policy statement set out by the MDB that outlines its “key objectives, policies, principles, scope, hierarchy and organizing framework of the institution’s approach to potential environmental and social impacts and risks of its activities.”53 Not all MDBs’ policy statements are necessarily mandatory.54

Another key component to safeguard systems is mandatory operational requirements for borrowers, and they are usually set out for specific lending circumstances.55 The third key component, environmental and social review procedures, tends to be mandatory for the MDB itself.56 The final key component, broadening access to information policies, goes hand-in-hand with transparency objectives.57

MDBs’ safeguards share some common features, including borrower requirements to undergo environmental and social assessments of projects or operations to be financed by the MDB, supplementary safeguards used to address specific environmental or social risks that set out institutional requirements to manage and assess the risks, and greater consistency in the risk areas that are covered.58 The key areas of operational safeguards among MDBs in relation to environmental sustainability are environmental and social assessment, involuntary resettlement, pollution prevention, biodiversity, community impacts, and environmental flows.59

The financial support from member countries allows MDBs to provide financial assistance to developing countries.60 MDBs raise capital through the issuance of bonds to countries who want to borrow capital.61 MDBs rarely face difficulties in being repaid by these borrowing countries.62 Most MDBs apply different safeguard instruments for development, programmatic, and investment lending.63

For policy-based lending and programmatic-based lending,64 MDBs generally require an evaluation of environmental and social impacts, and some will require some sort of action plan.65 As an example, the World Bank’s policy-based lending approach requires that the bank determine whether a specific country’s policies will have significant effects on that country’s natural resources and environment or will lead to significant poverty and social consequences for poor and vulnerable populations.66 The World Bank’s programmatic lending approach, on the other hand, requires the bank to undertake what is known as an environmental and social systems assessment, which looks at any potential impact or risk associated with a specific program.67

When it comes to investment lending, MDBs follow a more diverse approach depending on the project structure and circumstances.68 Different MDBs apply different safeguards when engaging in investment lending. For example, some may preemptively conduct environmental screening, while others require that projects must comply with the more stringent of either a host country’s law or an MDB’s own requirement.69 MDBs require compliance with national law and international agreements by borrowers to ensure that a project is “designed and carried out in compliance with . . . national obligations . . . under ratified Multilateral Environmental Agreements.”70

Overall, there is a general consistency between MDBs and their thematic coverage of safeguard issues within their systems; environmental assessment, protection of natural habitats, pollution prevention and abatement, climate change, and biodiversity are just a few examples of the environmental considerations that MDBs implement in their various safeguard systems.71 Some MDBs even list exclusions or prohibited projects within their environmental and social safeguard policies or frameworks that they will not support.72

Criticisms of MDBs

Although there are many potential positive impacts that can be made by development banks, there are also many criticisms. Critics argue that MDBs are too focused on “getting money out the door” rather than achieving their desired results. MDBs also face criticism for not being transparent enough when reporting GHG emissions from their development projects.73 Experts have also recognized that empirical research on development banks is limited,74 and there is very little research on actual environmental outcomes of the impact of environmental and social standards.75

Scholars have identified a number of different challenges in sustainable banking, including the uncertain bankability of projects,76 non-transparency in tracking sustainable capital flows, and the fact that no universal mechanism capable of making matches between green investment supply and demand exists.77 Another issue is the lack of access to capital.78 The commercial banking industry has access to the necessary capital, but without assistance from MDBs, the industry cannot match the developing economies’ range of opportunities for capital investment.79

Although sustainable development is within the mandate of many MDBs, they have been criticized for being less transparent regarding the climate-related impacts of their investments when compared to some of the biggest corporations with large carbon footprints.80 For instance, in 2017, a news article comparing the World Bank and Walmart found that the World Bank was seriously lagging behind Walmart and other major corporations like Gap, Nike, and Levi Strauss with respect to transparency on the climate impact of their investments.81

In addition to the issue of some MDBs not tracking total GHG emissions from their funded development projects or setting targets to reduce them, critics of MDBs also argue that they focus on short-term outputs, fail to engage in long-term activities, and put large demands on the governments of developing countries.82 MDBs have also been subject to criticisms that they use unsustainable growth-based models, lack an approach to align their entire lending portfolio with the Paris Agreement, focus on megaprojects that generate carbon-intensive infrastructure, and fail to protect forests.83

Climate Pledge Between MDBs

Although they are not immune from criticism, MDBs have been taking action to align with the Paris Agreement and address environmental concerns. In response to the Paris Agreement, nine MDBs announced a climate pledge a few years ago to recognize and increase investments targeting climate change by $175 billion by 2025.84 Previously, climate financing by MDBs was already hitting record levels, with a combined $111 billion financial target reached via MDB climate finance and co-finance.85

The pledged funding increase will come in three streams, beginning with a commitment to increase climate finance allocation levels globally by $65 billion by 2025, a 50 percent increase from current levels—with $50 billion specifically allocated to lower- and middle-income economies.86 Second, the annual combined climate adaptation finance will double to $18 billion by 2025.87 Finally, co-financing for climate action investment is expected to rise to $110 billion, with $40 billion expected to be mobilized by investors from the private sector.88

Along with the three streams, the nine MDBs released a joint statement outlining five actions to adapt to climate change and mitigate climate risks.89 The policy begins with each MDB individually committing to increase climate finance levels over time through the first two funding streams outlined above.90 The second action policy is based on the co-financing endeavor highlighted by the third funding stream mentioned above.91

The third policy commits to helping MDB clients deliver on the goals set forth in the Paris Agreement. The MDBs will present a common framework and define principles to be incorporated by each institution. That is expected to take place starting from 2021 onward.92 The fourth action commits to developing a transparency framework.93 Finally, each institution pledges to assist clients in the transition away from fossil fuels by implementing long-term GHG emissions and climate-resiliency strategies, and to develop financing and policy strategies to transition to a more climate-conscious future.94

The U.S. Role in MDBs

The United States plays a significant role in MDBs and can have a significant influence on their decisions. It serves as a leader in MDBs, including the World Bank (including three sub-institutions—the International Bank for Reconstruction and Development, the International Development Association, and the International Finance Corporation95), IDB, Asian Development Bank, African Development Bank, and European Bank for Reconstruction and Development.96

The United States can significantly influence MDBs by shaping their agendas and leveraging U.S. funding to MDBs to ensure that the MDBs are effective and impactful.97 Both the U.S. Congress and the executive branch play major roles in implementing policy regarding MDBs.98 Congress has complete responsibility for the level of U.S. financial commitments to the MDBs, the general framework for U.S. policy, and the rules that govern U.S. participation in the MDBs, whereas the secretary of the U.S. Treasury negotiates with other countries on the topic of MDB policy and prospective funding agreements.99 The Treasury also oversees the management of day-to-day conduct with respect to U.S. participation in the banks.100

Congress Grants Authority to the Secretary of the Treasury

The Bretton Woods Agreements Act of 1945 authorizes the United States’ participation in the International Monetary Fund and the World Bank.101 Following this act, additional legislation was modeled on it to authorize further participation in the other regional development banks.102 This congressional action allows the United States to participate in the schemes of MDBs.

Congress provides funding and oversight of the United States’ participation in the MDBs, which plays an important role in shaping the country’s policies at the MDBs.103 Congress has passed mandates regarding U.S. participation in the MDBs.104 Due to these mandates, the United States can oppose MDB loans and projects that it does not agree with. For example, when a project fails to follow environmental assessment procedures or has negative environmental impacts, the United States can oppose the project.105

Role of the Executive Branch

The president appoints representatives from the United States to sit on the executive boards for MDBs. The president also delegates the responsibility of voting and taking positions on behalf of the United States to the treasury secretary.106 The authority to delegate this power from the president to the Treasury stems from §581 of Division D of the Consolidated Appropriations Act, which provides Treasury with the responsibility “to coordinate activities relating to the United States’ participation in the international financial institutions and relating to organization of multilateral efforts aimed at currency stabilization, currency convertibility, debt reduction, and comprehensive reform programs.”107 Additionally, the act requires the Treasury to “report to the appropriate congressional committees describing the actions taken by each multilateral development institution to implement the policy goals specified in Section 581 and further actions needed to meet these goals.”108

In addition to delegating powers to the Treasury, the president’s role also extends to the establishment of the National Advisory Committee on International Monetary and Financial Policies. The NAC was originally established by the Bretton Woods Agreements Act and has changed over time. It now serves to “coordinate policies, advise on problems, and recommend legislation regarding international monetary and financial affairs.”109 The NAC has the authority to review proposed loans or other financial transactions and determine whether those transactions align with the United States’ policies and objectives with respect to international financial affairs.110 The NAC chairman is also required to report to Congress on the United States’ participation within international financial institutions, like MDBs, including assessing the effectiveness of major policies and operations, how the United States is affected by those issues, and progress taken to achieve U.S. policy goals.111

MDB Funding

As noted above, the United States is the largest donor for a number of MDBs.112 This position as the largest donor to a number of MDBs affords it great voting power and influence. Although the United States does not have the power to veto day-to-day decisions, it has voting power great enough to veto major policy decisions at the World Bank and the IDB.113 The United States also enjoys a position of great influence in a number of other MDBs as well.114

As a major contributor to the funding of many MDBs, the United States thus has the ability to play a key role in moving MDBs toward climate pledge goals and aligning with the Paris Agreement. While the issue of funding MDBs is not immune from political debate, the current administration has tasked the treasury secretary to develop a climate finance plan through use of MDBs and other institutions in an effort to reduce the environmental impacts of global development.115

How the United States Can Assist MDBs in Aligning With the Paris Agreement

Despite the existing criticisms of MDBs, researchers opine that such banks are the “best set of international institutions available to help the U.S. face the complex global challenges of the 21st century, and they fit perfectly within the multilateral approach of the new Biden administration.”116 This section lays out the parts of President Biden’s Executive Order that relate to aligning the MDBs with the Paris Agreement, and suggests elements that should go into the Biden administration’s strategy to align international development with fighting climate change.

Executive Order on Tackling the Climate Crisis at Home and Abroad

Section 102(f) of the Executive Order illustrates the current administration’s commitment to prioritizing the use of multilateral tools while addressing climate change. The section reads:

The United States will also immediately begin to develop a climate finance plan, making strategic use of multilateral and bilateral channels and institutions, to assist developing countries in implementing ambitious emissions reduction measures, protecting critical ecosystems, building resilience against impacts of climate change, and promoting the flow of capital toward climate-aligned investments and away from high-carbon investments.117

Section 102(g)(ii) of the Executive Order tasks the secretary of the treasury with developing a strategy to align MDBs with the Paris Agreement, declaring:

[T]he Secretary of the Treasury shall develop a strategy for how the voice and vote of the United States can be used in international financial institutions, including the World Bank Group and the International Monetary Fund, to promote financing programs, economic stimulus packages, and debt relief initiatives that are aligned with and support the goals of the Paris Agreement.118

The Voice and Vot of the United States Within MDBs

The United States is the lead shareholder in the five major MDBs discussed above, and can therefore use its voice to influence the other shareholders.119 Care should be taken in expressing that influence to ensure the steps taken are actually effective.120 There are many examples of how the United States has used its voice to influence the MDBs. The IDA—a sub-institution of the World Bank—was created through the suggestion of the United States so that the poorest countries could receive low-interest loans with long-term repayment periods.121 The IDA notably provides grants to these countries122 largely due to U.S. pressure.123

Further, leaders of the MDBs are likely to ask the Biden Administration for more funding, which will give the United States more influence within the MDBs’ decisions.124 A similar scenario occurred in 2020 when the United States increased capital to the World Bank and, as a result, was able to secure transparency and accountability reforms within the World Bank.125 This is the kind of influence and pressure that can be used to align the MDBs with the Paris Agreement, and the Secretary of the Treasury should include the following elements when drafting its strategy.

Key Elements for Climate Alignment Strategy

MDBs have committed to align with the Paris Agreement by ensuring that their strategies and activities are consistent with the goals of the Paris Agreement,126 but they have made slow progress in doing so.127 In drafting a strategy to assist them in aligning more quickly, U.S. policymakers can look toward different initiatives that have been put in motion to work toward sustainable development and financing. One example is the U.N. Environment Programme Finance Initiative, which provides financial principles for responsible banking and works to align the banking industry with the Paris Agreement and the SDGs.128 There are 206 signatories to this initiative—the majority of them being private banks.129

Even though this initiative is geared toward private banks, it can serve as a source for guidance for the United States and MDBs. Signatories to the initiative are continuously required to analyze the impact on people and the planet; use that analysis to set targets where that impact is significant; and report that progress publicly.130 After 18 months, signatories are required to report on their impact, what targets they have set, their progress, and how they have been implementing the three financial principles.131 Similar to this initiative, the United States’ strategy should focus on influencing MDBs to measure total GHG emissions from development projects (as a part of analyzing its impact on people and the planet), set science-based targets for measuring and reducing GHG emissions, and transparently report on this information and their progress.

The United States’ position of influence at a number of MDBs affords it the ability to push MDB policy further toward their climate goals. While MDBs commit to align with the Paris Agreement, U.S. policymakers can lead efforts at MDBs to accelerate these goals through specific policy objectives. The United States can increase its own funding to MDBs, appoint climate-focused representatives to serve as the voice for the U.S. agenda, push for increased transparency standards, end funding for fossil fuel-based projects, adopt a uniform framework for measuring risk, measure the GHG emissions of each development project, and set science-based targets for measuring and reducing GHG emissions.

First, in order to be successful in aligning with the Paris Agreement, MDBs need additional capital.132 Increasing the capital contributed to MDBs would be a minimal cost to U.S. taxpayers and would help the MDBs fund projects that are in line with the Paris Agreement.133 It has not always been clear in what direction MDB funding by the United States will go, but it appears that the U.S. government is trending toward increasing appropriations to MDBs year-over-year.

As early as 2017, the Trump administration proposed cutting funding to MDBs by $650 million over a three-year time period.134 Despite this, the administration one year later pledged to commit funding to support an expansion of the World Bank’s IBRD.135 Further, congressional appropriations dedicated to MDB funding exceeded the amounts requested by the previous administration for both fiscal years 2019 and 2020.136

For fiscal year 2021, the Biden administration is requesting $1.56 billion in congressional appropriations for MDBs.137 In December 2020, Congress passed the 2021 spending package, which included funding guidelines for international climate funding.138 MDBs provided $46 billion to climate financing, including funding for climate mitigation and adaptation projects, in 2019, and Congress has directed the United States to provide $1.48 billion to the MDBs in 2021.139

Another avenue in which MDBs can increase capital is through private finance. The G7 members recognize that current funding and financing approaches are inadequate to address infrastructure needs.140 Therefore, the G7 supports an increase in market-based private capital and requests that MDBs prioritize capital mobilization strategies.141 The World Bank Group also recognizes the opportunities presented by private finance and leverages the private sector through an approach called maximizing financing for development.142 Under this approach, the World Bank Group considers private and public solutions whenever a new project is presented.143

The United States should use its power to influence other MDBs to adopt similar initiatives as an additional way to increase capital. This increase in capital is a crucial first step toward aligning MDBs with the Paris Agreement, but further action is needed.

As a major contributor to the funding of many MDBs, the United States has the ability to play a key role in moving MDBs toward climate pledge goals and aligning with the Paris Agreement. As noted earlier, the United States has voting power great enough to veto major policy decisions at the World Bank and the IDB.144 The United States also enjoys a position of great influence in a number of other MDBs as well.145 With that great a degree of voting power and influence, it is important that U.S. appointees to MDBs’ executive boards share the goal of aligning MDBs with the Paris Agreement.

During the prior administration, the U.S.-appointed executives for both the World Bank and the IDB were Trump appointees.146 It is no secret that the outgoing administration was not climate-focused; in fact, the Trump administration likely accelerated the impacts of climate change through its policy decisions, and the four years of lost time that could have been put toward climate-focused policy decisions set back the United States—and the rest of the world—significantly.147 With the Biden administration’s push toward aligning with the Paris Agreement, new appointees to the executive boards of MDBs are a critical element to this strategy. New appointees need to do more than just align MDBs with the Paris Agreement, they must follow all the goals mentioned here.

Although the United States already prioritizes promoting transparency across and among the MDBs,148 it should push for stronger efforts. MDBs have policies in place to promote transparency and are pursuing initiatives to increase transparency. The International Aid Transparency Initiative improves transparency of development and humanitarian resources to address poverty.149 The IATI works with governments, MDBs, private-sector institutions, and civil society organizations to increase transparency on the resources available to developing countries.150 It encourages all organizations with resources going to developing countries to make information available regarding their development and humanitarian activities through the IATI’s data standard.151

According to the IATI, using transparent, high-quality data can help work toward sustainable development.152 Several MDBs have also registered with the IATI to show their commitment to transparency.153 However, one potential downside of IATI data is that the quality of the data is not standardized. Organizations that decide to publish IATI data are responsible for deciding what and how much detail they provide and the IATI does not take responsibility for audits or verifications of the data.154

An alternative initiative that advocates for transparency is the Global Reporting Initiative.155 This initiative also provides a set of transparency standards, but is specifically geared toward sustainability reporting.156 The standards are used by organizations to prepare sustainability reports and are used by every organization that prepares a report.157

Further, a December 2018 report by the World Resources Institute emphasizes the importance of transparency with regard to aligning MDBs with the Paris Agreement.158 Countries aligned with the Paris Agreement made a commitment to being transparent about implementation progress, and WRI notes that MDBs and other institutions must follow suit to ensure the efficacy of the Paris Agreement.159 While MDBs are good at disclosing how much they invest in climate-related activities, they fall short on making sure their investments are consistent with their climate goals.160

WRI gives the example that MDBs report jointly on spending on renewable energy, but they do not report on how much they invest in oil and gas.161 MDBs need to do a better job on reporting transparently on all aspects of their investments for any strategy to be effective. The WRI report emphasizes the important progress MDBs have made by adopting the climate pledge, but argues that the MDBs need to do more than that to reduce climate change harm to below dangerous levels.162 This report emphasizes the need for transparency, but also briefly touches on another problem with the way MDBs currently operate—not only that they are not transparent about how much they spend in the oil and gas sector, but that they are continuing to spend money in this sector.

Although MDBs contribute positively to climate financing, they have long funded fossil fuel-based development projects.163 This goal is the most straightforward for the MDBs to adopt. The G7 members recognize coal power as the largest contributor of GHG emissions, and have committed to the international transition away from unabated coal.164 As a G7 member, the United States should push for the elimination of fossil fuel subsidies, and to put an end to overseas financing for fossil fuels.165

Other countries need to follow suit and call on MDBs to phase out fossil fuel financing.166 A 2017 report published by Oil Change International found that six major MDBs provided more than $83 billion in public funding for fossil fuels between 2008 and 2015.167 In that same time period, 30 percent of all MDB energy financing went to fossil fuels and only 25 percent went toward clean energy sources.168 MDBs must shift financing and resources away from fossil fuels and into clean energy to align with the Paris Agreement.

Many financial institutions use a risk management framework known as the Equator Principles to determine how much environmental and social risk a project takes on. The Equator Principles set out a framework for risk management to determine, assess, and manage the social and environmental risks of a financial institution’s development projects.169 The Equator Principles have been adopted in 37 countries, and set out a number of standards for international project financing.170 While there are some national development bank members, the majority of the financial institutions that have adopted the principles are private.171 However, MDBs are beginning to implement the same standards that are found within the Equator Principles.172

By implementing the Equator Principles, MDBs can converge on a common set of environmental and social standards and practices.173 Where they are implemented already, the Equator Principles promote responsible environmental and social management practices in the financial and banking industry of countries and institutions that have adopted them, and they even support members to develop their own environmental and social-risk management systems.174 This kind of support can help MDBs develop a framework to manage environmental harm and push them closer to accomplishing their climate pledge goals. A framework such as the Equator Principles could be used in a number of ways to bring the MDBs into uniformity on climate policy, an example being the use of a uniform framework to measure GHG emissions.

A working report drafted by the NewClimate Institute and Germanwatch recommends a number of actions that MDBs can take to align their investments with the goals of the Paris Agreement. One of those actions is that MDBs must begin GHG accounting as a prerequisite to their projects.175 The World Bank began reporting its aggregate GHG emissions in 2017.176 By making this commitment, the World Bank became the first MDB to measure GHG emissions and determine the quantity of GHG emissions it creates or avoids as a result of its funded projects.177

The commitment by the World Bank marked an important change in the way that MDBs conduct themselves, because they previously only tracked emissions project-by-project and the data were often difficult to find.178 The World Bank’s implementation involves reporting aggregate GHG emissions from its investment projects.179 Other MDBs began to follow suit around the same time. For example, the Asian Development Bank committed to measuring its emissions and to reduce them at the same time that the World Bank committed to report its aggregate GHG emissions.180

The NewClimate Institute/Germanwatch working report recommends that GHG accounting should cover three scopes—direct emissions, emissions from generation of electricity or heat used, and other indirect emissions.181 It further recommends that all GHG emissions reporting should be publicly disclosed.182 Not only do MDBs have to measure GHG emissions, they must also set science-based targets to measure and reduce GHG emissions based on the data collected in order to align with the Paris Agreement.

Science-based targets to measure and reduce GHG emissions are crucial to aligning MDBs with the Paris Agreement. The U.N. Global Compact, WRI, Carbon Disclosure Project, and World Wide Fund for Nature joined in partnership to create the Science Based Targets initiative.183 This initiative was created with the goal of promoting institutions to set science-based targets in transition to a low-carbon economy.184

The SBTi identifies five criteria for companies to assess their target goals.185 First, entities must look to their overall scope 1 and scope 2 emissions186 and all their GHG emissions as set forth in the GHG Protocol Corporate Standard.187 Second, entities must commit to setting science-based targets that cover at least five and no more than 15 years from the date the target is submitted.188 Third, the target goals must be consistent with the Paris Agreement’s goal of keeping the global temperature increase well below 2 degrees Celsius.189 Fourth, entities must screen for all scope 3 emissions190 that it may create in its activity.191 Finally, the SBTi recommends that entities disclose all GHG emissions annually.192

While the SBTi was launched with private institutions in mind, the goals can be adopted by public financial institutions like MDBs, and the SBTi actually encourages that public financial institutions do adopt its five criteria.193 MDBs should adopt the SBTi criteria because it will help them set targets that are rooted in science and adhere to a set of uniform principles while also increasing transparency with respect to annual GHG emissions.

Conclusion

The United States should do everything in its power to ensure that the Paris Agreement goals are met. The Biden administration recognizes the need for climate policy changes in its Executive Order on Tackling the Climate Crisis at Home and Abroad, while also recognizing the important role that the MDBs can play in meeting the Paris Agreement goals.

With the amount of influence the United States can have on MDB policy decisions and the Biden administration’s efforts to take on the climate crisis, one hopes that MDBs can continue to take swift action to align themselves with the Paris Agreement and work toward mitigating the effects of climate change while still supporting global development. As the Biden administration is still in its early years, only time will tell whether the United States can really lead the effort toward addressing climate change. ELR

This article appeared in The Environmental Law Reporter, September 2021, titled "Using Multilateral Development Banks to Achieve Paris Climate Goals."

1. See generally Joe Thwaites, 4 Climate Finance Priorities for the Biden Administration, World Resources Inst., Jan. 28, 2021, https://www.wri.org/insights/4-climate-finance-priorities-biden-administration (stating that the Donald Trump Administration cut climate funding while the rest of the world has moved ahead).

2. Id.

3. Exec. Order No. 14008, 86 Fed. Reg. 7619 (Feb. 1, 2021), available at https://www.govinfo.gov/content/pkg/FR-2021-02-01/pdf/2021-02177.pdf.

4. Id.

5. Id.

6. Rebecca M. Nelson, Congressional Research Service, Multilateral Development Banks: Overview and Issues for Congress 1 (2020), https://fas.org/sgp/crs/row/R41170.pdf.

7. Chris Humphrey, The Multilateral Tools Waiting to Be Used by the Biden Administration, ODI, Dec. 11, 2020, https://www.odi.org/blogs/17729-multilateral-tools-waiting-be-used-biden-administration.

8. Statement, The White House, Carbis Bay G7 Summit Communiqué §40 (June 13, 2021) [hereinafter Carbis Bay Summit], https://www.whitehouse.gov/briefing-room/statements-releases/2021/06/13/carbis-bay-g7-summit-communique/.

9. See generally U.N. Conference on Trade and Development (UNCTAD), Trade and Development Report 2019: Financing a Global Green New Deal 83 (2019), https://unctad.org/system/files/official-document/tdr2019_en.pdf (discussing developing-country debt sustainability and the SDGs); see also Kathy Zhang & Aniket Shah, Development Banking for Sustainability, Sustainable Dev. Solutions Network, Nov. 17, 2015, https://www.unsdsn.org/news/2015/11/17/development-banking-for-sustainability (stating that there is a trillion-dollar infrastructure financing gap).

10. UNCTAD, supra note 9; Zhang & Shah, supra note 9; see also U.N., UN Secretary-General’s Strategy for Financing the 2030 Agenda, https://www.un.org/sustainabledevelopment/sg-fnance-strategy/ (last visited July 17, 2021) (“The financing gap to achieve the SDGs in developing countries is estimated to be US$2.5-3 trillion per year.”).

11. See generally UNCTAD, supra note 9; see also Alvaro Mendez & David P. Houghton, Sustainable Banking: The Role of Multilateral Development Banks as Norm Entrepreneurs, 12(3) Sustainability 972 (2020), available at https://www.mdpi.com/2071-1050/12/3/972/htm (looking at a study done by the International Monetary Fund (IMF) that implied that MDBs could play an important role in achieving the SDGs).

12. See Mendez & Houghton, supra note 11, at 2 (discussing MDBs’ roles in pioneering sustainable banking and their ability to engage private banks).

13. Carbis Bay Summit, supra note 8, §67.

14. See generally Helena Wright, How Walmart Beats the World Bank on Carbon Footprinting, Climate Home News, Oct. 10, 2017, https://www.climatechangenews.com/2017/10/10/walmart-beats-world-bank-carbon-footprinting/.

15. Marc Fleurbaey et al., Sustainable Development and Equity, in Climate Change 2014: Mitigation of Climate Change. Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change 283, 291 (O. Edenhofer et al. eds., Cambridge Univ. Press 2014), https://www.ipcc.ch/site/assets/uploads/2018/02/ipcc_wg3_ar5_chapter4.pdf.

16. Id. at 291.

17. See Cynthia Cummis, How Can Financial Institutions Deliver on the Paris Agreement?, Sci. Based Targets, July 2, 2008, https://sciencebasedtargets.org/blog/how-can-financial-institutions-deliver-on-the-paris-agreement (“The latest reports by the Intergovernmental Panel on Climate Change (IPCC) have shown that the transition to a net-zero carbon world requires a systemic economic transformation, backed by consistent capital flows.”); see also UNCTAD, supra note 9 (arguing that public or state development banking will be vital to achieving the SDGs).

18. Large volumes of literature have assessed sustainable development indicators to come to this conclusion. See Fleurbaey et al., supra note 15, at 292, 293 (discussing various definitions of “sustainability” and the lack of empirical indicators).

19. See id. at 293 (discussing three links between climate change and sustainability, including the constraint of development paths, trade offs between climate responses and SDGs, and co-benefits between effective climate responses and sustainable development objectives).

20. Id. at 287.

21. Mengpin Ge & Johannes Friedrich, 4 Charts Explain Greenhouse Gas Emissions by Countries and Sectors, World Resources Inst., Feb. 6, 2020, https://www.wri.org/insights/4-charts-explain-greenhouse-gas-emissions-countries-and-sectors.

22. Id. (“The other top sectors that produce emissions are . . . livestock and crop cultivation (12 percent); land use, land-use change and forestry, such as deforestation (6.5 percent); industrial processes of chemicals, cement and more (5.6 percent); and waste, including landfills and waste water (3.2 percent).”).

23. Zhang & Shah, supra note 9.

24. Id.

25. Id.

26. See Organisation for Economic Co-operation and Development (OECD), Development Finance Institutions and Private Sector Development, https://www.oecd.org/development/development-finance-institutions-private-sector-development.htm (last visited July 17, 2021) (defining national and international development finance institutions).

27. Nelson, supra note 6, at 1.

28. Id.

29. Since MDBs generally have a greater financing capacity than bilateral development banks, they are the focus of this Article. OECD, supra note 26.

30. Much of the literature differentiates between global, regional, and subregional MDBs. Annalisa Prizzon, A Guide to Multilateral Development Banks, ODI, June 28, 2018, https://odi.org/en/publications/a-guide-to-multilateral-development-banks/; Lars Engen & Annalisa Prizzon, ODI, A Guide to Multilateral Development Banks (2018), https://cdn.odi.org/media/documents/12274.pdf.

31. Prizzon, supra note 30; Engen & Prizzon, supra note 30.

32. Id.

33. Id.

34. See generally id.

35. See generally Cary Springfield, The Effectiveness of Multilateral Development Banks, Int’l Banker, Oct. 10, 2019, https://internationalbanker.com/banking/the-effectiveness-of-multilateral-development-banks/.

36. Nelson, supra note 6, at 11.

37. Id.

38. Id.

39. Id.

40. Id.

41. Id.

42. Id.

43. Id. at 12.

44. Id.

45. Id.

46. Id.

47. Id.

48. MDBs also have operational safeguards, such as lending operation requirements, that will not be covered for the purposes of this Article. Harvey Himberg, Comparative Review of Multilateral Development Bank Safeguard Systems (2015), https://consultations.worldbank.org/sites/default/files/consultation-template/review-and-update-world-bank-safeguard-policies/en/related/mdb_safeguard_comparison_main_report_and_annexes_may_2015.pdf.

49. Id. at 1.

50. Engen & Prizzon, supra note 30.

51. Id.

52. Four of these components are relevant to this Article and are discussed. Himberg, supra note 48, at 3.

53. Id.

54. From this, it can be inferred that not all policy directives are mandatory. Id.

55. Stated differently, different lending circumstances have different operational requirements. Id. at 4.

56. Id.

57. Id.

58. African Development Bank Group, Integrated Safeguards System—Policy Statement and Operational Safeguards 7 (2013), https://www.afdb.org/fileadmin/uploads/afdb/Documents/Policy-Documents/December_2013_-_AfDB’S_Integrated_Safeguards_System__-_Policy_Statement_and_Operational_Safeguards.pdf.

59. Id.

60. Id.

61. Humphrey, supra note 7.

62. Id.

63. Himberg, supra note 48, at 8-9.

64. Policy-based lending refers to the concept of lending funds to accomplish specific policy goals, while programmatic-based lending refers to the concept of lending funds to accomplish goals set forth by a specific program. World Bank, OP 8.60—Development Policy Lending (2004), http://www1.worldbank.org/publicsector/pe/befa05/OP860.htm.

65. Himberg, supra note 48, at 8-9.

66. Id. at 9.

67. Id.

68. Id. at 10.

69. Id. at 11.

70. Id. at 12.

71. Id. at 12-13.

72. Id. at 13.

73. Springfield, supra note 35.

74. See generally Aldo Musacchio et al., The Role and Impact of Development Banks—A Review of Their Founding, Focus, and Influence 6 (2017), https://people.brandeis.edu/~aldom/papers/The%20Role%20and%20Impact%20of%20Development%20Banks%20-%203-9-2017.pdf (“despite this controversy, empirical research on development banks is scant”); see also José de Luna-Martinez & Carlos Leonardo Vicente, Global Survey of Development Banks 2 (World Bank, Policy Research Working Paper No. 5969, 2012), https://openknowledge.worldbank.org/bitstream/handle/10986/3255/WPS5969.pdf (“Despite their size and importance, little is known about development banks. Past research on development banks has focused on examining their performance and comparing them to private institutions. Other studies have examined the reasons for the failure of select development banks.”).

75. Kevin P. Gallagher & Fei Yuan, Standardizing Sustainable Development: A Comparison of Development Banks in the Americas, 26(3) J. Env’t & Dev. 243, 250 (2017), https://journals.sagepub.com/doi/abs/10.1177/1070496517720711.

76. “Bankability” refers to the idea that, without collateral resources, a project will not be financed no matter how feasible that project is from a legal or technical standpoint. Mendez & Houghton, supra note 11, at 7, §3.2.1.

77. Mendez & Houghton, supra note 11.

78. Id.

79. Id.

80. See generally Wright, supra note 14.

81. Id.

82. Nelson, supra note 6, at 15.

83. See generally Bretton Woods Project, What Are the Main Criticisms of the World Bank and IMF? 8-9 (2019), https://www.brettonwoodsproject.org/wp-content/uploads/2019/06/Common-Criticisms-FINAL.pdf.

84. Vanora Bennett, MDBs Pledge to Join Forces to Raise Annual Climate Finance to $175 bn by 2025, Eur. Bank for Reconstruction & Dev., Sept. 22, 2019, https://www.ebrd.com/news/2019/-mdbs-pledge-to-join-forces-to-raise-annual-climate-finance-to-175-bn-by-2025.html.

85. Id.

86. Id.

87. Id.

88. Id.

89. Asian Development Bank et al., High Level MDB Statement (2019), https://www.adb.org/sites/default/files/page/41117/climate-change-finance-joint-mdb-statement-2019-09-23.pdf.

90. Id.

91. Id.

92. Id.

93. Id.

94. Id.

95. Nelson, supra note 6, at 2.

96. Id. at 1.

97. U.S. Department of the Treasury, Multilateral Development Banks, https://home.treasury.gov/policy-issues/international/multilateral-development-banks (last visited July 17, 2021).

98. Rebecca M. Nelson & Martin A. Weiss, Congressional Research Service, Multilateral Development Banks: How the United States Makes and Implements Policy 1 (2014), https://fas.org/sgp/crs/misc/R41537.pdf.

99. Id.

100. Id.

101. Id.

102. Id.

103. Id.

104. U.S. Department of the Treasury, Loan Review Votes, https://home.treasury.gov/policy-issues/international/multilateral-development-banks/loan-review-votes (last visited July 17, 2021).

105. Id.; see generally U.S. Department of the Treasury, February 2020 Monthly MDB Voting Record 5, https://home.treasury.gov/system/files/206/February-2020-Voting-Record.pdf (for example, the United States in February 2020 did not support a power utility project in Tajikistan due to the lack of capacity to remove polychlorinated biphenyl (PCB)-contaminated oils).

106. Nelson & Weiss, supra note 98, at 1.

107. Id.; 22 U.S.C. §6593.

108. U.S. Department of the Treasury, Reports to Congress, https://home.treasury.gov/policy-issues/international/multilateral-development-banks/reports-to-congress (last visited July 17, 2021).

109. Nelson & Weiss, supra note 98, at 2.

110. Id.

111. Id. There are many criticisms surrounding the structure of this participation, but it is outside of the scope of this Article.

112. Id. at 12.

113. Id.

114. Id.

115. Exec. Order No. 14008, supra note 3.

116. Humphrey, supra note 7.

117. Exec. Order No. 14008, supra note 3.

118. Id.

119. Humphrey, supra note 7; Nelson & Weiss, supra note 98, at 1 (“As the largest financial contributor to the international financial institutions, the United States has a leading role in shaping the policies of the international financial institutions (IFIs), which include the International Monetary Fund (IMF), the World Bank, and the regional development banks.”).

120. Humphrey, supra note 7.

121. Nelson & Weiss, supra note 98, at 2.

122. Id.

123. U.S. Department of the Treasury, supra note 97.

124. Thwaites, supra note 1.

125. Id.

126. Alex Clark et al., Climate Policy Initiative, Implementing Alignment With the Paris Agreement: Recommendations for the Members of the International Development Finance Club 9 (2019), https://www.climatepolicyinitiative.org/wp-content/uploads/2019/09/Implementing-alignment-recommendations-for-the-International-Development-Finance-Club-_-Full-Report.pdf.

127. Thwaites, supra note 1.

128. UNEP FI, About Us, https://www.unepfi.org/about/ (last visited July 17, 2021).

129. UNEP FI, Signatories, https://www.unepfi.org/banking/bankingprinciples/signatories/ (last visited July 17, 2021).

130. UNEP FI, Principles for Responsible Banking, https://www.unepfi.org/banking/bankingprinciples/ (last visited July 17, 2021).

131. Id.

132. Humphrey, supra note 7.

133. Id.

134. Nelson, supra note 6, at 12.

135. Id. at 14-15.

136. Id. at 12.

137. Id. at 15.

138. Thwaites, supra note 1.

139. Id.

140. Carbis Bay Summit, supra note 8, §67.

141. Id. §41.

142. World Bank, Maximizing Finance for Development (MFD), https://www.worldbank.org/en/about/partners/maximizing-finance-for-development (last visited July 17, 2021).

143. Id.

144. Nelson, supra note 6, at 12.

145. Id.

146. Thwaites, supra note 1.

147. Alejandra Borunda, The Most Consequential Impact of Trump’s Climate Policies? Wasted Time., Nat’l Geographic, Dec. 11, 2020, https://www.nationalgeographic.com/environment/article/most-consequential-impact-of-trumps-climate-policies-wasted-time.

148. See generally U.S. Department of the Treasury, supra note 97 (“Treasury website is intended to promote transparency and implement sections 1504 and 1505 of the International Financial Institutions Act added by Public Law 108-199 (2004) and Public Law 109-102 (2005), respectively.”).

149. IATI, Home Page, https://iatistandard.org/en/ (last visited July 17, 2021).

150. Id.

151. Id.

152. IATI, Using IATI Data, https://iatistandard.org/en/using-data/ (last visited July 17, 2021).

153. Engen & Prizzon, supra note 30.

154. IATI, supra note 152.

155. Global Reporting Initiative, Home Page, https://www.globalreporting.org (last visited July 17, 2021).

156. Id.

157. Global Reporting Initiative, GRI Standards, https://www.globalreporting.org/how-to-use-the-gri-standards/gri-standards-english-language/ (last visited July 17, 2021).

158. Gaia Larsen et al., 4 Ways Development Banks Can Better Support the Paris Agreement, World Resources Inst., Dec. 4, 2018, https://www.wri.org/insights/4-ways-development-banks-can-better-support-paris-agreement.

159. Id.

160. Id.

161. Id.

162. Id.

163. Thwaites, supra note 1; see also Press Release, International Institute for Sustainable Development, Fossil Finance From Multilateral Development Banks Reached USD 3 Billion in 2020, but Coal Excluded for the First Time Ever (Mar. 30, 2021), https://www.iisd.org/articles/fossil-finance-multilateral-development-banks-reached-usd-3-billion-2020-coal-excluded (MDBs still funding projects that produce fossil fuels).

164. Carbis Bay Summit, supra note 8, §39.

165. Thwaites, supra note 1.

166. Alex Doukas & Elizabeth Bast, Oil Change International, Fossil Fuel Finance at the Multilateral Development Banks: The Low-Hanging Fruit of Paris Compliance (2017), http://priceofoil.org/content/uploads/2017/05/MDBs-Finance-Briefing-2017.pdf.

167. Id.

168. Id.

169. Equator Principles, The Equator Principles, https://equator-principles.com/about/ (last visited July 17, 2021).

170. Id.

171. Equator Principles, EP Association Members & Reporting, https://equator-principles.com/members-reporting/ (last visited July 17, 2021).

172. See Equator Principles, supra note 169 (stating that the European Bank for Reconstruction and Development and other MDBs are increasingly drawing on the same standards).

173. Id.

174. Id.

175. Id.

176. Sophie Edwards, World Bank to Report Aggregate Greenhouse Gas Emissions for the First Time, Devex, Oct. 14, 2017, https://www.devex.com/news/world-bank-to-report-aggregate-greenhouse-gas-emissions-for-first-time-91292.

177. Id.

178. Id.

179. Id.

180. Id.

181. Sophie Bartosch et al., Germanwatch & NewClimate Institute, Aligning Investments With the Paris Agreement Temperature Goal—Challenges and Opportunities for Multilateral Development Banks (2018), https://newclimate.org/wp-content/uploads/2018/09/MDB_WorkingPaper_2018-09.pdf.

182. Id.

183. SBTi, About Us, https://sciencebasedtargets.org/about-us (last visited July 17, 2021).

184. Monica Richter et al., SBTs for Financial Institutions, Asia Pacific Presentation (Nov. 25/26, 2019), https://sciencebasedtargets.org/resources/legacy/2020/01/SBTi-FI-Asia-Pacific-presentation-Nov-2019-.pdf.

185. Id.

186. See generally U.S. Environmental Protection Agency, Scope 1 and Scope 2 Inventory Guidance, https://www.epa.gov/climateleadership/scope-1-and-scope-2-inventory-guidance (last updated July 6, 2021) (describing that scope 1 emissions are direct GHG emissions occurring from sources controlled or owned by an organization, while scope 2 emissions are indirect GHG emissions from the purchase of energy from electricity, steam, heat, or cooling).

187. Richter et al., supra note 184.

188. Id.

189. Though the SBTi actually encourages companies to pursue a 1.5 degree Celsius goal. Id.

190. See generally U.S. Environmental Protection Agency, Scope 3 Inventory Guidance, https://www.epa.gov/climateleadership/scope-3-inventory-guidance (last updated July 6, 2021) (describing that scope 3 emissions result from activities that an organization indirectly impacts; they may be the scope 1 and scope 2 emissions of other organizations).

191. Richter et al., supra note 184.

192. Id.

193. Id.

ENVIRONMENTAL LAW REPORTER The United States should use its clout with the banks to lessen fossil-fuel investments and increase financing for sustainability.

Accelerating Business’s Climate Actions
Author
Bob Perciasepe - Center for Climate and Energy Solutions
Center for Climate and Energy Solutions
Current Issue
May-June 2022
Issue
3
Parent Article
Moving in Synch

There has been a subtle but significant transition in how business is addressing the challenge of climate change. We have seen growing corporate support for the Paris Agreement. An ever-increasing number of companies are committed to a net-zero target by mid-century. This is not surprising. The business community is looking out for its long-term sustainability, which requires predictability. The need to plan business investments even in the face of the continued U.S. policy uncertainty, coupled with increasingly compelling science, has persuaded many firms that it is in their interests to act on their own in reducing greenhouse gas emissions.

At the same time, the investment community is looking at risks faced by businesses from climate change. BlackRock, an investment firm with over $6 trillion in assets, is urging its clients and customers to build sustainability and climate change implications into their planning. This has helped CEOs strengthen the climate change discussion within their own boards. In a recent letter to Congress, 30 leading companies have urged the passage of the climate provisions of the Build Back Better package because it will help them meet their climate goals.

In the U.S. power sector, emissions of carbon dioxide fell 30 percent from 2005 to 2020. Federal and state tax incentives for renewable power, advances with directional drilling aided by years of federal and industry research coordination, and a stiffer regulatory environment for coal-powered facilities influenced these reductions. Those regulatory needs forced power companies to decide to invest more in cleaning up coal plants or put those investments into cleaner energy.

In 2003, GM recalled all its electric vehicles in California, misjudging the future. Tesla was founded in that same year, and by 2009 had received a $465 million loan from the U.S. Department of Energy—which it has paid back with interest. It wasn’t until 2012 that Tesla sold more than 1,000 cars per quarter. In the 4th quarter of 2021, Tesla sold just over 300,000 vehicles. Following suit, every major car manufacturer has developed impressive lines of electric vehicles. Ford introduced an electric version of the F150 pickup truck. Further demonstrating this transition, GM has boldly proposed to sell only clean electric vehicles by 2035.

These two sectors alone represent more than 50 percent of U.S. greenhouse gas emissions. There are similar actions in other sectors, from manufacturing to buildings. A transition is underway from waiting for legislation to set the course, to a norm of taking action now. In the early environmental movement, government’s role was telling businesses what to do. Today, when it comes to climate change, businesses already know what they need to do—what they need now are government and nongovernmental organization partnerships to help them accelerate the pace.

When Duke Energy adopted a net-zero goal for 2050, the company clearly noted that it needed supporting public policy. New transmission lines will be needed, carbon capture will be needed, and continued support for nuclear power will be needed. With its zero-emitting goals established, GM will be supported by new partnerships with research and development on batteries as well as government policies accelerating the deployment of charging stations.

Businesses need certainty to achieve sustainability. They see the low probability for a comprehensive federal program, they see the growing consumer interest, advantages for recruiting employees, investors wanting responsible action, and the continually growing scientific urgency. What is needed now is a stronger business-government partnership, with supporting policy and investment, because the pace of change and current steps taken are insufficient to meet the challenge.

Here is where environmental NGOs have a guiding role to play on the path to society-wide zero emissions by 2050. They can help target existing federal programs to support private greenhouse gas reduction efforts, and they can provide a coordinated and non-redundant transparency structure to give businesses platforms to build credibility and accountability with the public.

Lubricating Business-Government Gears
Author
Avi Garbow - Resources Legacy Fund
Resources Legacy Fund
Current Issue
May-June 2022
Issue
3
Parent Article
Moving in Synch

When you are in the midst of a crisis, the oft-used three-legged stool analogy seems wholly inadequate. Our global climate crisis cannot be solved by a very limited number of pillars of action. This is the quintessential problem that requires a whole of fill-in-the-blank strategies to arrest the worsening effects of climate pollution. There are no sidelines where inaction should be tolerated.

It is, however, sensible to focus on parties with whom the greatest potential for positive impact rests. Business is near the top of that list. The private sector can and must take responsibility for its greenhouse gas pollution, and take immediate and measurable steps to significantly reduce emissions. In 2015, the Science-Based Target Initiative emerged from a coalition of UN agencies and business leaders committed to addressing the role of the private sector in our climate crisis. Today, hundreds of companies around the world have publicly committed to science-based GHG reduction targets as part of the SBTi, and that list is growing. This is commendable. But a target is not a substitute for actual investments and discernible and achievable emissions reduction plans.

Targets and commitments are precursors to action, and we must focus on actual reductions. Companies that emit GHGs should be transparent about their plans to reduce emissions, and be held to account. These plans should also address companies’ supply chain emissions, which often represent the vast majority of their overall carbon footprint. These are not easy decisions and actions for companies to take, and they often collide with plans for production growth and the desire to maximize profits. But the climate crisis demands a long-term outlook. And consumers and investors should reward companies that match science-based targets with real emissions reductions. Going a step further, companies should be advocates for public policies that enable more widespread emissions reductions. Why? Because addressing a global climate crisis should be viewed as a business imperative.

Those public policies may include a range of voluntary programs, government-led research and development, and action-inducing incentives. They should be centered around equity, recognizing that the climate crisis is also an environmental, economic, and social injustice that demands proactive and equitable responses.

Those public policies should include stringent emissions standards that are legally defensible and scientifically based. We should not be fooled by the list of hundreds, if not thousands, of companies worldwide who promote their GHG targets as representative of those actually partaking in the solution to this crisis. The largest GHG emitters—including those who fail to account for their supply chain emissions—are often absent from those lists. It is government’s responsibility, using its full authorities, to address the largest-emitting sectors by setting enforceable limits.

There is another segment of society that also plays an important role in solving our climate crisis, less heralded in Washington, D.C., and state capitals, unspoken of in corporate board rooms, but felt keenly in communities suffering from worsening effects of this crisis: philanthropists. They, and the organizations that wield their dollars, have the capacity to equitably target resources to communities where needs for restoration and resilience are greatest. Philanthropic organizations can experiment, innovate, and invest, without the restrictions of government or the self-imposed limits of most corporations. They can fund pilot projects, prioritize impact, convene and connect people, and seize upon new ideas and approaches. Philanthropy can also leverage both government and the private sector in ways that can supercharge their collective effectiveness.

We are in the midst of a crisis of our own making that spares no one. Conversely, no one can afford to remain a bystander to the array of solutions at our disposal and on the horizon. Aspirations and intent are not enough. Only through the combined force of action can we see a brighter future.

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