Money & The Environment

Volume 24, Number 1, Summer 2009

CO2 Prices and Their Potential Impact on the Western U.S. Power Market
The odds increase every day that U.S. lawmakers will adopt some type of climate change policy soon. Whatever the details and specific targets of the legislation, it will almost certainly include the power generation sector, which represents one-third of U.S. greenhouse gas (GHG) emissions. And such a policy imposed as a carbon tax or as a cap-and-trade regime is bound to have a profound effect on power generation, the myriad companies that supply electricity to the U.S. market and electric customers throughout the land.
Victor Niemeyer, Lew Rubin, and Kyle Davis


Settling NRD Claims by Appropriately Valuing Injury and Damages
Claims for natural resource damages (NRD) can range from thousands to hundreds of millions of dollars. At the high end, ExxonMobil’s NRD settlement totaled more than $900 million after the 1989 Exxon Valdez oil spill in Alaska. In 2008, Montana and the United States settled with ARCO for $168 million for NRD claims at Montana mining sites. Many other state and federal NRD claims have been brought, litigated, and settled over the years for varying amounts.
Suzanne C. Lacampagne and Jeffrey C. Miller

Protecting the City’s Water: Designing a Payment for Ecosystem Services Program
Studies of water utilities across the United States show that every dollar invested in watershed protection saves tens to hundreds of dollars in water treatment costs. The threats that watersheds face are numerous: pollution, development, fire, soil erosion, drought, flooding, and others. Payment for Ecosystem Service (PES) programs mitigate the risks posed to watersheds by linking the payment for hydrological services to consumers and using the resulting funds for conservation, restoration, and land acquisition projects. This article examines several examples of municipalities in the United States that have defined and valued their ecosystem services, developed agreements to guarantee these services, and established a payment mechanism.
Travis Greenwalt and Deborah McGrath

Banking on the Environment: Profiting from Investment in REDD
The combined threats associated with climate change and biodiversity loss call for a deeper commitment of resources and investment from both public and private-sector sources. They call for thoughtful use of incentives and other policy instruments that harness market forces, including meaningful measures to reduce greenhouse gas emissions from deforestation and degradation (REDD). Specifically, we must create an investment climate to finance forestry programs that generate robust, permanent carbon credits with sustainable benefits.
Gia Schneider, William L. Thomas, and Benjamin Vitale

Green Construction Costs and Benefits: Is National Regulation Warranted?
Buildings have a significant impact on the environment. According to the U.S. Green Building Council (USGBC), in the United States alone, buildings account for 65 percent of electricity consumption; 36 percent of energy use; 30 percent of greenhouse gas (GHG) emissions; 30 percent of raw materials use; 30 percent of waste output (136 million tons annually); and 12 percent of potable water consumption. These environmental impacts result in short-term expenditures (utility costs, materials, and construction costs and disposal fees) as well as long-term costs.
Leigh Kellett Fletcher

Federal Government as Angel Investor for Environment & Energy Projects?
This article provides an overview of those portions of the 2008 and 2009 Stimulus Bills that provide significant benefits to environmental, energy, and natural resources clients. The 2008 Stimulus Bill provides numerous incentives for clients in developing and fielding clean and renewable forms of energy technology, by ensuring liquidity and vitality through preferential tax treatment. It is, in essence, a proactive program established by Congress to ensure that these vulnerable emerging technologies are not killed off by the lack of liquidity in the marketplace.
Shawna M. Bligh and Chris A. Wendelbo

Safe Harbor in Financial Storms: Renewable Energy Projects
The current recession has caused concerns throughout every sector of the economy. Predictions of continued gloom have made financing almost impossible for capital-intensive projects. Yet peeking out of the dark clouds of this economic storm is the bright spot of renewable-energy projects. A multitude of factors favor renewable-energy projects during this economic downturn. New increased Renewable Portfolio Standards (RPS) for electrical utilities will create an almost insatiable appetite for renewable-energy projects.
Arthur J. Harrington

Anticipating Environmental Issues in an Economic Downturn
On December 1, 2008, the Business Cycle Dating Committee of the National Bureau of Economic Research—the group that officially defines the beginning and ending of business cycles—declared December 2007 the peak of the last economic expansion and the beginning of a recession. For most lawyers, the only part of that sentence that was news was the fact that a group of economists exists in Cambridge, Massachusetts, that officially declares business cycles.
David G. Mandelbaum

Carbon Sequestration: A Liability Pathway to Commercial Viability
When someone uses the phrase “clean coal” to promote the burning of fossil fuels for energy, what goes unmentioned is that producing energy from fossil fuels can be “clean” only if the carbon dioxide (CO2) generated in the combustion process is kept out of the atmosphere. One emerging technology accomplishes this by managing the CO2 underground.
David P. Flynn and Susan M. Marriott

Current Recession to Test Financial Assurance Program
On December 1, 2008, the National Bureau of Economic Research (NBER), a group of economists that define the official beginning and end of a business cycle, announced that the U.S. economy had entered a recession in December 2007. In late January 2009, the U.S. Department of Commerce reported that in the fourth quarter of 2008 the U.S. economy had contracted at an annual rate of 3.8 percent, a number that has since been revised to 6.4 percent.
Bruce J. Gruenewald