Climate Change Summary Newsletter and Commentary

Climate Change Summary Newsletter and Commentary

September 14, 2009

Steven L. Hoch
Brownstein Hyatt Farber Schreck, LLP


Study Says We May Go To War Over Climate Issues
Oh great, just great.

The “Climate Security Index” analysis, by the American Security Project, a bipartisan think tank, states that U.S. military and humanitarian resources will be stretched thin as climate change destabilizes vulnerable regions of the world. In these regions climate change will exacerbate regional tensions and increase the risk of conflict, mass migration and humanitarian emergencies – likely forcing U.S. intervention. See http://www.secureamericanfuture.org/.

IRS Wants You to Comment On Carbon Sequestration Tax Credits
If you don’t comment, you will get audited. Remember that!

The IRS is again asking for public comment on a tax credit for carbon dioxide sequestration under tax code Section 45Q. IRS previously sought comment on the notice in June. The credits apply to wind/refined coal facilities placed in service before 1/1/20, and to qualified open and closed-loop biomass, geothermal and solar, small irrigation, landfill gas, trash combustion and qualified hydropower facilities in service before 1/1/11. The section provides for credit of (i) $20 per metric ton of qualified carbon dioxide emissions sequestered and (ii) $10 per metric ton of qualified carbon dioxide emissions used as a tertiary injectant in a qualified enhanced oil or natural gas recovery project. A qualified facility must capture at least 500,000 metric tons of carbon dioxide during the taxable year.

EPA in a Bit of a Quandary over Accuracy of GHG Emissions Estimates
SWAGS rule (Scientific Wild Ass Guess).

EPA may allow industry to estimate its emissions while some claim that estimation methods can result in under-reporting of emissions by as much as 70 percent. Given these concerns about accuracy, one EPA official said the agency will soon release new methods for estimating emissions. Industry officials have been calling on EPA to allow facilities to use “best available” data in the initial reporting periods because they will not have enough time to install monitors. Environmentalists can not fathom this being permitted by EPA and indicate that it would appear EPA is hungry for data, not accuracy.

Airlines Fight Control under AB32
“Fly me to the moon”… but not from California

The airline industry is fighting California’s authority to regulate GHG emissions at airports stating that these facilities are exclusively regulated by the federal government. Citing section 233 of the Clean Air Act, the Air Transport Association (ATA) is asking for amendments to draft guidelines to reflect the federal preemption of the area. Several airport expansion projects already have been the focus of argument between the state and industry over whether GHG emissions should be assessed, mitigation and the application of CEQA.


Brands Use Carbon Offsets

Offsets become a marketing tool.

71 of the top brands using carbon offsets in the industries of Airlines, Auto, Bottled Water, Consumer Products, Credit Card, Energy, Events, Facebook, Fashion, Online Retail, Publications, Shipping, Shopping Malls, and Travel are listed at: C:\Documents and Settings\slh\Desktop\Newsletter\ARTICLES\71 Brands using Carbon Offsets Carbon Offsets Daily.mht

Commodity Futures Trading Commission is “Go” to Regulate Over-the-Counter Carbon Markets
“We don’t need any stinking derivatives!”

The Commodity Futures Trading Commission is being touted by its chairman as being able to effectively oversee over-the-counter trading of “tailored” carbon contracts, even as many legislators continue to express doubt whether the markets should exist. Some lawmakers have been skeptical of creating a carbon trading market for fear that the possible trillion-dollar market – in particular the derivatives or financial products based on the value of the market – would be the next “sub-prime mortgage” financial disaster. Much of this concern could be eliminated the CFTC chairman notes by legislation to reform over-the-counter derivatives that were permitted are permitted to exist.