Harmonizing regulatory and litigation approaches to climate change mitigation: Incorporating tradable emissions offsets into common law remedies

University of Pennsylvania Law Review

Volumn 155, Issue 6, 2007, Pages 1563-1603

  Engel, Kirsten H ^a  

^a UNIVERSITY OF ARIZONA   (United States)

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EID: 34548119872     PISSN: 00419907     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Conference Paper

References (186)

1. Complaint at 43-49, Connecticut v. Am. Elec. Power Co., 406 F. Supp. 2d 265 (S.D.N.Y. 2005) (No. 04-5669). This lawsuit is currently on appeal after the district court dismissed the complaint under the political question doctrine. Am. Elec. Power Co., 406 F. Supp. 2d at 274;
2. Brief of Amici Curiae U.S. Senator James M. Inhofe and the Washington Legal Foundation in Support of Defendants-Appellees and Supporting Affirmance of the District Court at 4-5, Connecticut v. Am. Elec. Power Co., No. 05-5104 (2d Cir. Mar. 2, 2006) (agreeing with the lower court that plaintiffs presented a political question).
3. Complaint for Damages and Declaratory Judgment at 2, California ex rel. Lockyer v. Gen. Motors Corp., No. 06-05755 (N.D. Cal. Sept. 20, 2006).
4. See Kirsten H. Engel & Scott R. Saleska, Subglobal Regulation of the Global Commons: The Case of Climate Change, 32 ECOLOGY L.Q. 183, 187-89 (2005) (arguing that subglobal regulation is both "economically rational" and "a good policy choice").
5. See W. PAGE KEETON ET AL., PROSSER AND KEETON ON THE LAW OF TORTS § 90, at 643 (5th ed. 1984) ("The equitable remedy of injunction to enjoin a public nuisance developed early in the history... of equity jurisprudence ....").
6. See infra Part III.
7. With the recent endorsement of several major U.S. corporations, the United States may actually be getting near to legislating a climate cap-and-trade program. See Business Leaders Urge Climate Action, ENV'T NEWS SERVICE, Feb. 22, 2007, http://www.ens-newswire.com/ens/feb2007/2007-02-22-01.asp (noting ninety major international corporations and organizations, including Citigroup, General Electric, RollsRoyce, Volvo, and the World Council of Churches, call on governments to reduce GHG emissions and increase energy efficiency);
8. see also Developers Hopeful About a U.S. Carbon-Trading Market, L.A. TIMES, Jan. 20, 2007, at C2 (describing the U.S. Climate Action Partnership, formed between ten major U.S. corporations and environmental groups to lobby for climate change legislation).
9. EUROPEAN COMM'N, EU ACTION AGAINST CLIMATE CHANGE: EU EMISSIONS TRADING-AN OPEN SCHEME PROMOTING GLOBAL INNOVATION 6 (2005), available at http://ec.europa.eu/ environment/climat/pdf/emission_trading2_en.pdf;
10. see also infra Part IV. C. 1.
11. See infra Part IV.C.2 (identifying the Chicago Climate Exchange as a potential source of "'pre-approved' GHG emissions credits for U.S. tort defendants").
12. See David A. Grossman, Warming Up to a Not-So-Radical Idea: Tort-Based Climate Change Litigation, 28 COLUM.J. ENVTL. L. 1 (2003);
13. Thomas W. Merrill, Global Warming as a Public Nuisance, 30 COLUM. J. ENVTL. L. 293 (2005);
14. Matthew F. Pawa & Benjamin A. Krass, Global Warming As a Public Nuisance: Connecticut v. American Electric Power, 16 FORDHAM ENVTL. L. REV. 407 (2005);
15. Benjamin P. Harper, Note, Climate Change Litigation: The Federal Common Law of Interstate Nuisance and Federalism Concerns, 40 GA. L. REV. 661 (2006);
16. see also Global Warming Panel, Part II, The Role of State Attorneys General in National Environmental Policy, 30 COLUM.J. ENVTL. L. 351, 352 (2005) (re marks of Professor Thomas Merrill, providing a laundry list of all of the knotty legal issues raised by a public nuisance global warming lawsuit).
17. For excellent overviews of the climate change policies of all fifty states and many local governments, see Pew Ctr. on Global Climate Change, What's Being Done in the States, http://www.pewclimate.org/what_s_being_done/ in_the_states/ (last visited May 1, 2007)
18. and United States Environmental Protection Agency, Climate Change, State and Local Governments, http://www.epa.gov/climatechange/wycd/stateandlocalgov/ index.html (last visited May 1, 2007).
19. See Press Release, Office of the White House Press Sec'y, Fact Sheet: President Bush Announces Clear Skies & Global Climate Change Initiatives (Feb. 14, 2002), http://www.whitehouse.gov/news/releases/2002/02/ 20020214.html (unveiling "a bold new strategy for addressing global climate change"). For information on the commitment of seven northeastern states to create a regional cap-and-trade program applicable to the electric power sector starting in 2009, see Regional Greenhouse Gas Initiative [RGGI], http://www.rggi.org/index.htm (last visited May 1, 2007). For scholarly treatments of the growing phenomenon of state and local action on climate change, see, for example, BARRY G. RABE, STATEHOUSE AND GREENHOUSE: THE EMERGING POLITICS OF AMERICAN CLIMATE CHANGE POLICY 18-21 (2004) (identifying distinct periods in the evolution of state and local environmental initiatives);
20. John Dernbach, Moving the Climate Change Debate from Models to Proposed Legislation: Lessons from State Experience, [2000] 30 Envlt. L. Rep. (Envtl. L. Inst.) 10,933, 10,949-72 (Nov. 2000) (suggesting legislative solutions based on the successes and failures of legislative attempts on the state level);
21. Engel & Saleska, supra note 3, at 209-22 (analyzing observed patterns of subglobal action in light of behavior predicted by modeling);
22. Laura Kosloff & Mark Trexler, State Climate Change Initiatives: Think Locally, Act Globally, NAT. RESOURCES & ENV'T, Winter 2004, at 46, 47-50 (describing and analyzing the role played by state and local environmental initiatives)
23. and Robert B. McKinstry, Jr., Laboratories for Local Solutions for Global Problems: State, Local and Private Leadership in Developing Strategies To Mitigate the Causes and Effects of Climate Change, 12 PENN ST. ENVTL. L. REV. 15, 26-31 (2004) (attributing the development of state action to the federal government's inability to act).
24. The Bush administration's goal is to reduce the overall GHG intensity (metric tons of GHGs emitted per million dollars in gross domestic output) by 18% over the decade between 2002 and 2012. However, the GHG intensity of the economy dropped by about the same amount, 17.4%, over the decade between 1990 and 2000. Thus if the next decade reflects the same trend toward greater efficiency in the use of fossil fuels as the previous decade, the economy will achieve the Bush administration goal without the need for any additional incentives or regulatory requirements. See John Holdren, Dir., Program on Sci., Tech., & Pub. Policy, Harvard Univ., Presentation at The Ohio State University: The Science and Politics of Global Climate Change: Does the Bush Administration Think It Can Fool Mother Nature? 56-59 (Oct. 7, 2004) (on file with author).
25. 127 S. Ct. 1438, 1462-63 (2007) (holding that the Federal Clean Air Act authorizes the EPA to regulate GHG emissions from motor vehicles and hence the EPA Administrator must apply her "judgment" to determine whether regulation is warranted because such emissions, in the words of section 202(a)(1) of the Act, 42 U.S.C. § 7521(a)(1) (2000), "may reasonably be anticipated to endanger public health or welfare").
26. There has been no definitive estimate of the total quantity of GHG emissions reduced through the various state and local programs and initiatives, perhaps because it is such a fast-moving statistic. However, the author and another researcher have estimated that the adoption, by ten states, of the California GHG vehicle emissions standards in addition to the renewable portfolio standards in effect in twenty-one or so states still only reduces total U.S. GHG emissions by between 1% and 1.5% "in the 2015-20 timeframe." Engel & Saleska, supra note 3, at 212-13.
27. This falls far short of the 2.7% to 3.4% reduction called for by economists that estimate the optimal amount of emissions reductions for the United States acting unilaterally. Id. at 207 tb1.3, 213 (comparing the expected reduction due to state and local action with those predicted efficient by William Nordhaus and Zili Yang in their Regional Dynamic General-Equilibrium (RICE) model).
28. For proponents of the need for an international, as opposed to a unilateral, response to climate change, see Daniel C. Esty, Toward Optimal Environmental Governance, 74 N.Y.U. L. REV. 1495, 1554-55 (1999) ("[T]o be structurally sound and to deliver efficient (and fair) results, the regulatory calculus must include all of the potential cost bearers and beneficiaries of governmental intervention (or nonintervention).")
29. and Robert N. Stavins, Policy Instruments for Climate Change: How Can National Governments Address a Global Problem?, 1997 U. CHI. LEGAL F. 293, 323 ("Because unilateral action will invariably be highly inefficient, any domestic program requires an effective international agreement, if not a set of international greenhouse policy instruments.").
30. See DANIEL A. FARBER ET AL., ENVIRONMENTAL LAW 47 (7th ed. 2006) (identifying climate change as the "most striking" commons problem);
31. Richard B. Stewart, Environmental Regulation and International Competitiveness, 102 YALE L.J. 2039, 2097-99 (1993) (advocating international solutions to the international tragedy of the commons);
32. Barton H. Thompson, Jr., Tragically Difficult: The Obstacles to Governing the Commons, 30 ENVTL. L. 241, 253 (2000) (examining the unique and traditional aspects of global warming as a commons problem). On an annual basis, all sources of GHGs in the world emit approximately 7.9 gigatons of GHGs. Of this, approximately 4.6 gigatons are absorbed by the earth's ecosystem - in the ocean, soils, forests, and other vegetative matter - while the 3.3 gigatons emitted in excess of the earth's natural absorptive capacity is the source of anthropogenic-based climate change.
33. FERN, SINKS IN THE KYOTO PROTOCOL: A DIRTY DEAL FOR FORESTS, FOREST PEOPLES AND THE CLIMATE 7 fig.2 (2001).
34. See Franz Hackl & Gerald J. Pruckner, How Global Is the Solution to Global Warming?, 20 ECON. MODELLING 93, 102-11 (2002) (comparing efficient GHG control rates under conditions of global cooperation and noncooperation);
35. William D. Nordhaus & Zili Yang, A Regional Dynamic General-Equilibrium Model of Alternative Climate-Change Strategies, 86 AM. ECON. REV. 741, 751-55 (1996) (same);
36. Zili Yang, Dual-Rate Discounting in Dynamic Economic-Environmental Modeling, 20 ECON. MODELLING 941, 946-48 (2003) (same).
37. See Engel & Saleska, supra note 3, at 207-08 (arguing that unilateral action to reduce domestic GHG emissions is economically rational for nations with large emissions, even if it is not optimal in comparison to the reductions called for under a cooperative international solution).
38. See E. Donald Elliott, Bruce A. Ackerman & John C. Millian, Toward a Theory of Statutory Evolution: The Federalization of Environmental Law, 1 J.L. ECON. & ORG. 313, 330-31 (1985) (attributing the automobile industry's support for the Motor Vehicle Air Pollution Control Act of 1965 to a fear of "differing or inconsistent air pollution standards set at the state and local level" and "political domino effect[s] in which one state legislature after another would set more and more stringent emissions standards without regard to the costs or technical difficulties involved").
39. Two examples are the industry-supported campaigns to include tailpipe emissions standards under the Federal Clean Air Act of 1965, see S. REP. NO. 89-192, at 5-6 (1965) ("[I]t would be more desirable to have national standards rather than for each state to have a variation in standards and requirements which could result in chaos insofar as manufacturers, dealers, and users are concerned."), and to establish nationally uniform energy efficiency standards for appliances under the National Appliance Energy Conservation Act of 1987,
40. see S. REP. NO. 100-6, at 4 (1987) reprinted in 1987 U.S.C.C.A.N. 52, 54-55 ("[A] system of separate State appliance standards has begun to emerge and the trend is growing. Because of this trend, appliance manufacturers were confronted with the problem of a growing patchwork of differing state regulations which would increasingly complicate their design, production and marketing plans.").
41. See also BRUCE A. ACKERMAN & WILLIAM T. HASSLER, CLEAN COAL/D IRTY AIR 31-32 (1981) (describing the eastern U.S. coal industry's surprising support for Section III of the proposed amendments to the Clean Air Act in 1977, and quoting language in the 1976 House Committee report revealing that the motive behind the industry's support was a desire to equalize the playing field between states with "cheaper low-sulfur coal," and states with "predominately higher sulfur coals").
42. Freeman and DeShazo have delved deeper than Elliott et al., in an effort to better understand how interest group dynamics at the state level can shape the nature of the ultimate federal regulatory response. J.R. DeShazo & Jody Freeman, Timing and Form of Federal Regulation: The Case of Climate Change, 155 U. PA. L. REV. 1499 (2007). They posit that federal regulation is most likely to contain ceilings preempting more stringent state standards, where heterogeneous state regulation threatens to impose cost heterogeneity upon industries that produce national, or at least regional, products.
43. Id. at 1515-16 They predict, on the other hand, that federal statutes will contain minimum standards where state regulation has been lacking or weak.
44. Id. at 1503-04.
45. See ELIZABETH R. DESOMBRE, DOMESTIC SOURCES OF INTERNATIONAL ENVIRONMENTAL POLICY: INDUSTRY, ENVIRONMENTALISTS, AND U.S. POWER 9-10 (2000) ("When U.S. industry has higher production costs than its international competitors due to regulation, or when some industry has developed a substitute for regulated substances, either type of industry will gain from international adoption of the domestic regulations.");
46. Jonathan B. Wiener, Something Borrowed for Something Blue: Legal Transplants and the Evolution of Global Environmental Law, 27 ECOLOGY L.Q. 1295, 1308 (2001) (detailing the "conscious legal borrowing" from national law by the drafters of international climate change treaties).
47. See Paulette L. Stenzel, Can the ISO 14000 Series Environmental Management Standards Provide a Viable Alternative to Government Regulation?, 37 AM. BUS. L.J. 237, 253-54 (2000) ("[A] major impetus for the ISO 14000 standards is the need for harmonization among various environmental management and auditing programs. . . . These programs, using varying standards and processes, increase costs and make compliance difficult for companies operating in more than one country.").
48. RICHARD ELLIOT BENEDICK, OZONE DIPLOMACY 31 (1991) ("The strength of public concern confronted American Industry with the threat of a patchwork of varying state regulations. . . . U.S. industry not only became resigned to controls but even publicly favored federal regulations, which would at least be uniform and therefore less disruptive.").
49. See Wiener, supra note 21, at 1339-40.
50. See New State Ice Co. v. Liebmann, 285 U.S. 262, 311 (1932) (Brandeis, J., dissenting) ("It is one of the happy incidents of the federal system that a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.").
51. For example, one might expect that electric utility companies, soon subject to the GHG cap-and-trade program of the northeastern states under the RGGI, may seek the enactment of a federal cap-and-trade program to broaden the scope of the program and thus increase the number of potential trading partners from which to buy and sell excess emissions credits.
52. Moreover, it is not clear that industry must lose in the litigation, or lose unanimously, for litigation to spur industry interest in a federal regulatory solution. None of the lawsuits filed against the gun industry for liability related to crimes committed with guns were successful, and yet the industry was able to obtain a broad liability exemption from Congress. See Protection of Lawful Commerce in Arms Act, Pub. L. No. 109-92, 119 Stat. 2095 (2005) (to be codified at 15 U.S.C. §§ 7901-7903, 18 U.S.C. §§ 921, 922, 924) (exempting firearms dealers and manufacturers from liability for crimes committed with the use of their products), This example may also indicate that although litigation success is not necessary to spur industry to seek federal regulation, it may influence the stringency of the regulatory result obtained from Congress.
53. Subsequent to the filing of the lawsuit, one of the utility company defendants in the public nuisance lawsuit filed by Connecticut and other northeastern states announced its support of mandatory emissions reductions. See Jeffrey Ball & Antonio Regalado, Cinergy Backs U.S. Emissions Cap, WALI. ST. J., Dec. 2, 2004, at A6 ("Cinergy Corp., one of the nation's biggest electric utilities, endorsed the idea of a national cap on global-warming emissions and . . . . believes . . . that Congress should [regulate] to 'take the unnecessary uncertainty out of national environmental policy.'").
54. Litigation against industrial contributors to global warming opens up the possibility of a quid pro quo: industry accepts federal mandatory emissions limits in exchange for immunity from liability for past contributions to climate change. Such an exchange is apparently under discussion on Capitol Hill. Doug Obey, Backers of CO2 Curbs Eye Liability Relief to Bolster Industry Support, INSIDEEPA, Sept. 8, 2006 ("Capitol Hill supporters of legislation to regulate carbon dioxide (CO2) emissions are quietly considering whether to provide industry liability protection from global warming-related lawsuits, in an effort to win backing for mandatory GHG limits, according to Capitol Hill and other sources.").
55. See W. PAGE KEETON ET AL., supra note 4, § 86 at 616-17 ("There is general agreement that [nuisance] is incapable of any exact or comprehensive definition. Few terms have afforded so excellent an illustration of the familiar tendency of the courts to seize upon a catchword as a substitute for any analysis of a problem . . . ." (footnote omitted)).
56. But see DAN B. DOBBS, THE LAW OF TORTS § 462 at 1320-21 (2000) (contending that, although nuisance was once the "jungle Prosser described," separately analyzing private nuisance from public and statutory nuisance cases "make[s] possible a reasonably coherent understanding of private nuisance"). While public nuisance may be less muddled than private nuisance to begin with, the plaintiffs in the two cases under consideration here have magnified the uncertainty by suing in the alternative, under either the state law of public nuisance or federal common law of nuisance.
57. See, e.g., Complaint, supra note 1, at 1-2 (describing a public nuisance tort action taken by eight states against several companies under federal and state law, and listing the Plaintiff states as Connecticut, New York, California, Iowa, New Jersey, Rhode Island, Vermont, and Wisconsin and the Defendants as corporations incorporated in New York, Delaware, and Minnesota).
58. See Harper, supra note 9, at 689-90.
59. See Memorandum of Understanding, Reg'l Greenhouse Gas Initiative 1 (Dec. 20, 2005), available at http://www.rggi.org/docs/mou_brief_12_20_05.pdf (providing that Connecticut, New York, New Jersey, and Vermont are all participating members of the RGGI). In December 2005, the RGGI states committed to implementing the first regional cap-and-trade program for carbon dioxide emissions from electric utilities located in participating states. Beginning in 2009, the RGGI will stabilize carbon dioxide emissions from power plants in the region at current levels through 2015, and reduce emissions by 10% from current levels by 2019.
60. Id. at 2-3;
61. Seven Northeast States Launch Regional Greenhouse Gas Initiative, ENV'T NEWS SERVICE, Dec. 20, 2005, http://www.ens-newswire.com/ens/dec2005/2005-12-20-05.asp. California, also a party to the utility public nuisance suit, is perhaps the national leader in terms of domestic regulation of GHGs. On September 27, 2006, Governor Schwarzenegger signed AB No. 32, the Global Warming Solutions Act, which caps California's GHG emissions at 1990 levels by 2020.
62. See California Global Warming Solutions Act of 2006, CAL. HEALTH & SAFETY CODE §§ 38500-38599 (West 2007);
63. California Global Warming Act, Pew Ctr. on Global Climate Change, http://www.pewclimate.org/what_s_being_done/in_the_states/ab32/index.cfm (last visited May 1, 2007) (summarizing the goals and methods of the act).
64. The Act requires that electric utilities comply with mandatory GHG emissions reporting. CAL. HEALTH & SAFETY CODE § 38530. According to one source, "[t]his means the state's investor-owned utilities, municipal utilities and load-serving entities can expect to be some of the first entities required to report and reduce GHG emissions." The California Climate Action Registry and AB 32: Frequently Asked Questions 1-2, http://www.climateregistry.org/docs/ABOUTUS/ AB_32_FAQs_101006.pdf (last visited May 1, 2007). Wisconsin and Iowa both have climate change action plans that discuss the advisability of reducing emissions from the in-state electric utility sector. For instance, Wisconsin's plan focuses on reducing carbon dioxide from the electric utility sector, concluding that the state could significantly reduce GHG emissions from that sector at little or no cost. Wisconsin Climate Action Plan 20-21, http://dnr.wi.gov/org/ aw/air/global/WICCAP.pdf (last visited May 1, 2007). The Iowa plan proposes a program for reporting and reducing GHGs from the state's electric utility sector.
65. RICHARD A. NEY ET AL., UNIV. OF IOWA, IOWA GREENHOUSE GAS ACTION PLAN 59-64 (1996), available at http://atmos.cgrer.uiowa.edu/research/reports/ iggap/FinalReport.pdf.
66. CAL. CODE REGS. tit. 13, § 1961.1 (2005).
67. Clean Air Act § 209(b), 42 U.S.C. § 7543(b) (2000).
68. California's regulations are currently being challenged by the automobile industry, which alleges that the standards are preempted by the federal Energy Policy and Conservation Act, 49 U.S.C. § 32919(a) (2000). Central Valley Chrysler Jeep, Inc. v. Witherspoon, No. CV F 04-6663 AWI LJO, 2007 WL 135688, at *1 (E.D. Cal. Jan. 16, 2007). Furthermore, the U.S. Department of Transportation has attempted to effectuate this preemption by administrative rule. See Average Fuel Economy Standards for Light Trucks Model Years 2008-2011, 71 Fed. Reg. 17,566, 17,654 (Apr. 6, 2006) (to be codified at 49 C.F.R. pts. 523, 533, 537).
69. For example, California is ineligible for the needed waiver of federal preemption under the Clean Air Act, should the EPA find that California "does not need such state standards to meet compelling and extraordinary conditions." Clean Air Act § 209(b) (1) (B), 42 U.S.C. § 7543(b) (1) (B) (2000). In justifying its claim for damages, California bolsters its argument that its regulation of vehicle GHG emissions is needed to meet the extraordinary threats posed by global warming to its environment, threats that include not only loss of its magnificent coastal resources, but also loss of its supply of water through reduced snowmelt.
70. See Massachusetts v. EPA, 127 S. Ct. 1438, 1438 (2007).
71. Cf. 33 U.S.C. §§ 1342(b), 1342(d) (2) (A) (providing a process, under the Federal Clean Water Act, for an affected state to complain to the permitting state and to the EPA about a source of pollution in the permitting state and authorizing the EPA to bar the grant of a permit based upon an affected state's complaint)
72. U.S.C. § 7426 (requiring, under the federal Clean Air Act, that states require that major sources of air pollution within that state notify certain states affected by the pollution and authorizing the EPA to require that such sources reduce their emissions).
73. 451 U.S. 304 (1981).
74. Id. at 317 (concluding, with respect to water pollution, that Congress "has occupied the field through the establishment of a comprehensive regulatory program supervised by an expert administrative agency");
75. see also United States v. Kin-Buc, Inc., 532 F. Supp. 699, 702 (D.N.J. 1982) (finding the federal common law of nuisance as applied to air pollution disputes preempted by the federal Clean Air Act),
76. Int'l Paper Co. v. Ouellette, 479 U.S. 481, 497 (1987) ("The [Clean Water Act] precludes only those . . . standards . . . that are incompatible with those established by the procedures set forth in the Act. . . . [N]othing in the Act bars aggrieved individuals from bringing a nuisance claim pursuant to the laws of the source state.").
77. This is also consistent with the role of public nuisance as a "gap filler" in the field of environmental law. See James R. Drabick, Note, "Private" Public Nuisance and Climate Change: Working Within, and Around, the Special Injury Rule, 16 FORDHAM ENVTL, L. REV. 503, 519 (2005).
78. See Massachusetts v. EPA, 127 S. Ct. 1438, 1459-60 (2007).
79. But see Merrill, supra note 9, at 313, 316-17 (arguing that a claim under the federal common law of public nuisance against out-of-state industries for emitting GHGs may be preempted at the present time, despite the EPA's silence on this matter, under the "field displacement" doctrine).
80. But cf. Connecticut v. Am. Elec. Power Co., 406 F. Supp. 2d 265, 274 (S.D.N.Y. 2005) (dismissing states' public nuisance climate change lawsuit on the grounds that it presented nonjudiciable political questions).
81. See supra Part I.C.
82. For a discussion of how such a proposal would work in practice, see infra notes 51-52 and accompanying text.
83. See infra notes 58-59 and accompanying text (discussing the options lawmakers have when designing an environmental regulatory program).
84. This is a basic tenet of open market emissions trading, which is the original emissions trading approach employed by the EPA under the Clean Air Act. See RICHARD A. LIROFF, AIR POLLUTION OFFSETS: TRADING, SELLING AND BANKING 23-26 (1980) (describing current trading policies in air pollution nonattainment areas, according to which industries can construct new or modified major sources of pollution if they can offset the additional emissions with emissions reduction credits generated through the reduction in discharges at existing sources);
85. see also Susan Wood, Offset Credits: The Growth of a Market, ENVTL. FIN., Feb. 2000, at 18 (describing financial incentives to reduce emissions and thereby create sellable emissions reduction credits).
86. DOBBS, supra note 30, § 468 at 1338 ("On the ground that the damages remedy is inadequate to protect rights in property, courts often issue injunctions compelling the defendant to abate private as well as public nuisances.").
87. See People ex rel. Van de Kamp v. Am. Art Enters., 656 P.2d 1170, 1173 n.11 (1983) ("[A]lthough California's general nuisance statute expressly permits the recovery of damages in a public nuisance action brought by a specially injured party, it does not grant a damage remedy in actions brought on behalf of the People to abate a public nuisance.").
88. See, e.g., Ellen Friedland, Note, Pollution Share Liability: A New Remedy for Plaintiffs Injured by Air Pollutants, 9 COLUM. J. ENVTL. L. 297, 314-19 (1984) (exploring the difficulty of finding a polluter liable when such factors as time, geography, and topography complicate the plaintiffs ability to trace her injury to the polluter);
89. Patrick J. Scully, Comment, Proof of Causation in a Private Action for Acid Rain Damage, 36 ME. L. REV. 117, 117 (1984) ("It is impossible to trace individual episodes of acid rain to the particular emissions sources causing the problem or to apportion acid rain injuries among contributing polluters.").
90. Most federal environmental laws contain a savings clause preserving common law remedies. See, e.g., 42 U.S.C. § 6972(f) (2000) ("Nothing in this section shall restrict any right which any person (or class of persons) may have under any statute or common law to seek enforcement of any standard or requirement . . . or to seek any other relief . . . ." (emphasis added) ). Nevertheless, this has not prevented the courts from finding that federal environmental laws preempt state common law remedies for pollution discharges.
91. See supra notes 39-41 and accompanying text (noting specifically City of Milwaukee v. Illinois, 451 U.S. 304, 317 (1981),
92. and Int'l Paper Co. v. Ouellette, 479 U.S. 481, 497 (1987)).
93. Tradable Emissions: Hearing Before the J. Economic Comm., 105th Cong. 113 (1997) (statement of Daniel J. Dudek, Senior Economist, Environmental Defense Fund) ("An insufficient number of participants will doom an emissions trading market.").
94. In the United States, this is primarily due to the acid rain emissions trading program applicable to electric utilities under the 1990 Amendments to the Clean Air Act. See 42 U.S.C. §§ 7651b-7651c (regulating the trading of allowances for sulfur dioxide emissions).
95. See infra Part IV.C (explaining GHG emissions trading regimes in the EU and U.S. private markets).
96. James Salzman & J.B. Ruhl, Currencies and the Commodification of Environmental Law, 53 STAN. L. REV. 607, 627 (2000).
97. Id. at 609-10.
98. Scholars have demonstrated that the "fungibility" criterion just described is actually a multifactored analysis, encompassing questions of the fungibility of space, type, and time. See id. at 622-30.
99. See 40 C.F.R. §§ 50.1-.14 (2006) (establishing the ambient air quality standards).
100. See Chevron U.S.A. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 840-42 (1984) (interpreting the statutory phrase "stationary source");
101. see also Jody Freeman, The Story of Chevron: Environmental Law and Administrative Discretion, in ENVIRONMENTAL LAW STORIES 171, 178-84 (Richard J. Lazarus & Oliver A. Houck eds., 2005) (tracing the history of the debate).
102. Salzman & Ruhl, supra note 57, at 611-12.
103. See JAMES E. MCCARTHY, CONG. RESEARCH SERV., MERCURY EMISSIONS FROM ELECTRIC POWER PLANTS: AN ANALYSIS OF EPA'S CAP-AND-TRADE REGULATIONS 14-16 (2006), available at http://www.ncseonline. org/NLE/CRSreports/06feb/RL32868.pdf (discussing evidence of mercury hot spots and the EPA's response).
104. Under the Kyoto Protocol, industrialized countries can meet their obligations to reduce GHGs through a series of different types of emissions trading programs. Kyoto Protocol to the United Nations Framework Convention on Climate Change art. 17, Dec. 11, 1997, 37 I.L.M. 22 [hereinafter Kyoto Protocol] (authorizing emissions trading between signatory countries to meet their emissions reduction targets);
105. id. art. 6 (authorizing joint implementation);
106. id. art. 12 (authorizing the clean development mechanism). Similarly, emissions trading is a standard feature of the leading proposals for climate change legislation in the United States.
107. See Climate Stewardship and Innovation Act of 2005, S. 1151 §§ 301-372, 109th Cong. (2005) (reintroducing a tradable allowances bill); Climate Stewardship Act of 2003, S. 139, 108th Cong §§ 311-372 (2003) (making the original call for a tradable allowance in GHGs). As discussed previously, the proposed regional program for controlling GHG emissions from electric utilities in the northeast includes an emissions trading program.
108. See RGGI, supra note 11.
109. See generally Jules Coleman, Corrective Justice and Wrongful Gain, 11 J. LEGAL STUD. 421 (1982) (proposing corrective justice as a foundation of tort law);
110. Jules L. Coleman, Moral Theories of Torts: Their Scope and Limits (pts. 1 & 2), 1 LAW & PHIL. 371 (1982),
111. LAW & PHIL. 5 (1983) (arguing that no one theory of morality explains all of tort law and exploring different theories rooting it in corrective justice principles);
112. Ernest Weinrib, The Special Morality of Tort Law, 34 MCGILI. L.J. 403 (1989) (rejecting instrumental and economic theories of tort law in favor of a morality-based corrective justice theory).
113. See LARRY PARKER, CONG. RESEARCH SERV., GLOBAL CLIMATE CHANGE: LOWERING COST ESTIMATES THROUGH EMISSIONS TRADING - SOME DYNAMICS AND PITFALLS 1 (1999), available at http://www.ncseonline.org/nle/crsreports/climate/clim-21.cfm ("[Most analyses] strongly suggest that emission trading would significantly reduce the projected costs of U.S. compliance with the Kyoto Protocol.").
114. See Pew Ctr. on Global Climate Change, Chart of Climate Legislation, http://www.pewcliniate.org/docUploads/ Cap%2Dand%2Dtrdde%20bills%20110th%5FFeb5%2Epdf' (last visited May 1, 2007) (listing five major GHG cap-and-trade bills proposed by the Senate in the 110th Congress).
115. See Harper, supra note 9, at 684 ("The central
116. For an impressive effort to make precisely such links, see Myles R. Allen & Richard Lord, The Blame Game, 432 NATURE 551 (2004);
117. Myles Allen, Liability for Climate Change: Will It Ever Be Possible To Sue Anyone for Damaging the Climate?, 421 NATURE 891 (2003).
118. Especially in the area of toxic torts, courts have referred to these two inquiries as "general" and "specific" causation. See M. STUART MADDEN & GERALD W. BOSTON, LAW OF ENVIRONMENTAL AND TOXIC TORTS 479 (3d ed. 2005) (discussing the "dual causation question");
119. see also Sterling v. Velsicol Chem. Corp., 855 F.2d 1188, 1200 (6th Cir. 1988) (distinguishing between general and specific causation in the mass tort class action context). For example, a plaintiff alleging that her kidney cancer was caused by her exposure to the defendant's carbon tetrachloride must establish that carbon tetrachloride is capable of causing kidney cancer under conditions similar to those characterizing the plaintiffs exposure.
120. See id. at 1203-04 (finding that the plaintiffs had insufficient medical proof that the injuries were caused by ingesting contaminated water). Specific causation, on the other hand, requires that the plaintiff meet a required standard of proof that her injuries were actually caused by the particular agent alleged. In the toxic tort context, courts typically require the plaintiff establish that it is "more probable than not" that the agent alleged was actually responsible for her injuries.
121. See, e.g., Earl v. Cryovac, 772 P.2d 725, 727 (Idaho Ct. App. 1989) ("The trier of fact must be persuaded that the plaintiffs claim of causation 'is more probably true than not true.'" (quoting IDAHO CIVIL JURY INSTRUCTIONS § 1.20.1 (2003), available at http://www.isc.idaho.gov/rules/cv_juryinst.pdf) ).
122. See Richard S.J. Tol & Roda Verheyen, State Responsibility and Compensation for Climate Change Damages - A Legal and Economic Assessment, 32 ENERGY POL'Y 1109, 1112 (2004) (arguing that scientific facts with respect to climate change that have been demonstrated "will satisfy the requirements for general causation").
123. These standards of confidence come from the Third Assessment Report of the Intergovernmental Panel on Climate Change (IPCC), in which "likely" corresponds to a 66%-90% chance and "very likely" corresponds to a 90%-99% chance of occurrence. INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE [IPCC], WORKING GROUP I, CLIMATE CHANGE 2001: THE SCIENTIFIC BASIS 2 n.7 (J.T. Houghton et al. eds., 2001) [hereinafter IPCC, SCIENTIFIC BASIS].
124. Id. at 10.
125. See COMM. ON THE SCI. OF CLIMATE CHANGE, NAT'L RESEARCH COUNCIL, CLIMATE CHANGE SCIENCE 16 (2001), available at http://www.gcrio.org/OnLnDoc/pdf/ClimateChangeScience.pdf [hereinafter NRC].
126. See id.
127. IPCC, SCIENTIFIC BASIS, supra note 72, at 7.
128. NRC, supra note 74, at 18.
129. See Allen & Lord, supra note 69, at 552 ("[I]t will almost always be impossible to say that 'but for' GHG emissions this event would never have occurred.").
130. The limits of attribution are also explored in this Symposium by Myles Allen et al., Scientific Challenges in the Attribution of Harm to Human Influence on Climate, 155 U. PA. L. REV. 1353 (2007).
131. DOBBS, supra note 30, § 171 at 414-17.
132. See RESTATEMENT (SECOND) OF TORTS § 431 (1965) (defining legal cause).
133. See Engel & Saleska, supra note 3, at 209 (noting that the tragedy of the commons framework is based upon the neoclassical assumption that "individual market participants have no market power; they are merely 'price-takers,'" and thus cannot themselves alter the total usage of the commons).
134. Cf. Massachusetts v. EPA, 127 S. Ct. 1438, 1457 (2007) (rejecting the EPA's assertion that, because the GHG emissions the EPA failed to regulate cannot be said to "cause" global warming in and of themselves, the plaintiffs were unable to establish the causation prong of standing because it "rests on the erroneous assumption that a small incremental step, because it is incremental, can never be attacked in a federal judicial forum").
135. DOBBS, supra note 30, § 171, at 415 n.6. Dobbs suggests four different grounds upon which such a conclusion may be reached: (a) the substantial factor approach, (b) the single indivisible injury rule . . . ; (c) but-for causation, which will yield a finding of causation if the entire group of polluters collectively contributes exactly the number of units of pollution to cause harm . . . ; and (d) the argument that the group of singly insufficient causes is a variation of the duplicative cause or two fire cases where the total pollution is more than enough to cause harm . . . .
136. Id. (citations omitted).
137. This is especially apparent in older public nuisance environmental cases. For instance, in California v. Gold Run Ditch & Mining Co., the California Supreme Court held that the defendant mining operation was liable for injunctive relief. 4 P. 1152, 1160 (Cal. 1884). This was despite the trial judge's remarks that I am unable to say that defendant's mine alone, without reference to the debris from other mines, materially contributes to the evils mentioned; or, in other words, if there were no mining operations save those of the defendant, I am not prepared to say that it would materially injure the valley lands or the navigation of the river. It is the aggregate of debris from all the mines which produces the injuries mentioned in these findings.
138. Id. at 1156 (quotation marks omitted) (quoting the trial court).
139. Similarly, in Woodyear v. Schaefer, the Maryland Court of Appeals enjoined the defendant's butchery operations for contributing to a public nuisance, even though the defendant contributed only a small fraction of beef, blood, and other butchery waste products to the stream. 57 Md. 1, 10-13 (1881). The Court of Appeals stated that [t]he extent to which the appellee has contributed to the nuisance, may be slight and scarcely appreciable. Standing alone, it might well be that it would only, very slightly, if at all, prove a source of annoyance . . . . But it is when all are united together, and contribute to a common result, that they become important as factors, in producing the mischief complained of. And it may only be after from year to year, the number of contributors to the injury has greatly increased, that sufficient disturbance of the appellant's rights has been caused to justify a complaint. One drop of poison in a person's cup may have no injurious effect. But when a dozen, or twenty, or fifty, each put in a drop, fatal results may follow. It would not do to say that neither was to be held responsible.
140. Id. at 10,
141. Further, in Lockwood Co. v. Lawrence, the Supreme Judicial Court of Maine held that [i]n the case at bar, it may be that the act of any one respondent alone might not be sufficient cause for any well grounded action on the part of the complainants; but when the individual acts . . . produce appreciable and serious injury, it is a single result, not traceable perhaps to any particular one of these respondents, but a result for which they may be liable in equity as contributing to the common nuisance, as we have before stated. 77 Me. 297, 309-310 (1885).
142. In a more recent Rhode Island trial court opinion, State ex rel. Lynch v. Lead Industries Ass'n, the court uses the language of "substantial cause," and upholds liability based on each defendant's small contribution to the state's lead paint problem. State ex rel. Lynch v. Lead Indus. Ass'n (Lead Indus. Ass'n II), No. Civ.A. 99-5226, 2005 WL 1331196 at *2-*3 (R.I. Super. Ct. June 3, 2005).
143. For a discussion of these cases, see Pawa & Krass, supra note 9, at 450-52.
144. See City of Milwaukee v. NL Indus. Inc., 691 N.W.2d 888, 893 (Wis. Ct. App. 2004).
145. Id. (emphasis added).
146. See Lead Indus. Ass'n II, 2005 WL 1331196, at *2;
147. see also State ex rel. Lynch v. Lead Indus. Ass'n, No. C.A. 99-5226, 2004 WL 2813747, at *3 (R.I. Super. Ct. Nov. 9, 2004) (granting plaintiffs motion to suppress evidence and testimony with respect to individual Rhode Island properties).
148. See Lead Indus. Ass'n II, 2005 WL 1331196, at *2.
149. But see Chicago v. American Cyanamid Co., 823 N.E.2d 126, 140 (Ill. App. Ct. 2005) (reaching an opposite result in a public nuisance action by holding that the plaintiff failed to demonstrate causation);
150. see also Donald G. Gifford, The Death of Causation: Mass Products Torts ' Incomplete Incorporation of Social Welfare Principles, 41 WAKE FOREST L. REV. 943, 997-99 (2006) (arguing that "[p]arens [p]atriae actions brought by states and municipalities against manufacturers of cigarettes, handguns and lead pigment have been the most important challenge to the individual causation requirement during the past decade" (footnotes omitted)).
151. Private parties can sue for a public nuisance if they show "special damages." See RESTATEMENT (SECOND) OF TORTS § 821C cmt. c (1979). While it may be difficult to demonstrate such damages, one can imagine situations where it may be possible, such as a large coastal landowner that is peculiarly susceptible to sea level rise.
152. See Michael P. Vandenbergh & Anne C. Steinemann, The Carbon-Neutral Individual, 82 N.Y.U. L. REV. (forthcoming 2007) (suggesting the use of carbon offsets to help individuals achieve the social norm of carbon neutrality).
153. See Georgia v. Tenn. Copper Co., 206 U.S. 230, 237 (1907) ("This court has not quite the same freedom to balance the harm that will be done by an injunction [when a State is a party], that it would have in deciding between two subjects of a single political power.").
154. See Robert Abrams & Val Washington, The Misunderstood Law of Public Nuisance: A Comparison with Private Nuisance Twenty Years After Boomer, 54 ALB. L. REV. 359, 377-79 (1990) (arguing that the balancing of the utilities has no place in public nuisance where the harm alleged is a substantial violation of a public right and the case is brought by a sovereign that has a special responsibility to protect such rights).
155. See RESTATEMENT (SECOND) OF TORTS §§ 821B, 826 (setting out the parameters of the reasonableness determination);
156. see, e.g., County of Santa Clara v. Atl. Richfield, 40 Cal. Rptr. 3d 313, 325 (Cal. Ct. App. 2006) (providing an example of the application of this test).
157. For example, the Kyoto Protocol has failed to garner the support of all of the world's industrialized nations, failing to attract the United States as a party. Furthermore, Kyoto's emissions reduction allocation applies only to industrialized nations and only through the target compliance period of 2008-2012.
158. Many commentators argue that the earth's natural GHG assimilative capacity should be distributed on a per capita basis. See Paul Baer et al., Equity and Greenhouse Gas Responsibility, 289 SCIENCE 2287 (2000);
159. Michael Grubb, Seeking Fair Weather: Ethics and the International Debate on Climate Change, 71 INT'L AFF. 463, 485 (1995).
160. Complaint, supra note 1, at 49.
161. Connecticut v. Am. Elec. Power Co., 406 F. Supp. 2d 265, 274 (2005). The ruling was clearly motivated by the court's concern that, given that the problem of anthropogenic climate change is attributable to GHG emissions across the globe, it had no basis upon which to impose an abatement requirement in the absence of a determination by a relevant political body. The court noted that the plaintiffs requested relief, "would, at a minimum, require this Court to: (1) determine the appropriate level at which to cap the carbon dioxide emissions of these Defendants; (2) determine the appropriate percentage reduction to impose upon Defendants[,] . . . all without an "initial policy determination" having been made by the elected branches."
162. Id. at 272-73.
163. See supra note 32 and accompanying text.
164. See, e.g., OHIO REV. CODE ANN. § 2315.21 (D) (2) (b) (LexisNexis 2005) (capping awards of punitive damages at $350,000 and prohibiting a state court from entering a judgment for punitive damages in excess of the lesser of two times the amount of compensatory damages or 10% of the employer's net worth).
165. See e.g., Weinberger v. Romero-Barcelo, 456 U.S. 305, 312 (1982) ("The essence of equity jurisdiction has been the power of the Chancellor to do equity and to mould each decree to the necessities of the particular case. Flexibility rather than rigidity has distinguished it." (quoting Hecht Co. v. Bowles, 321 U.S. 321, 329 (1944)));
166. Spur Indus., Inc. v. Del E. Webb Dev. Co., 494 P.2d 700, 707 (Ariz. 1972) ("The law of nuisance affords no rigid rule to be applied in all instances. It is elastic. It undertakes to require only that which is fair and reasonable under all the circumstances." (quoting Stevens v. Rockport Granite Co., 104 N.E. 371, 373 (Mass. 1914))). Boomer v. Atl. Cement Co., 257 N.E.2d 870, 873 (N.Y. 1970) ("[T]o follow the rule [that an injunction must issue even when enjoinment would be more costly than the nuisance] literally in these cases would be to close the plant down at once. This court is fully agreed to avoid that immediately drastic remedy . . . .").
167. See supra text accompanying notes 31-37.
168. For example, the Clean Air Act uses a "maximum achievable control technology" standard for new sources that is determined by "the average emission limitation achieved by the best performing 12 percent of existing sources." Clean Air Act § 112(d) (3) (A), 42 U.S.C §7412(d) (3) (A) (2000);
169. see also 40 C.F.R. § 63.51 (2005) (defining the maximum achievable control technology).
170. For further information on the two types of trading systems and examples of their implementation, see Richard E. Ayres, Expanding the Use of Environmental Trading Programs into New Areas of Environmental Regulation, 18 PACE ENVTL. L. REV. 87, 94 (2000).
171. Kyoto Protocol, supra note 64, art. 12, 37 I.L.M. at 38.
172. Id.
173. For example, suppose a corporation in Germany proposes a CDM project in a developing nation that will convert a large boiler from coal to natural gas. To permit the corporation to obtain credits for the conversion toward the corporation's share of Germany's emissions reduction obligation under the Kyoto Protocol, the corporation would have to demonstrate that the conversion would not have happened in the absence Of its investment. See STEPHEN MEYERS, ERNEST ORLANDO LAWRENCE BERKELEY NAT'L LAB., ADDITIONALITY OF EMISSIONS REDUCTIONS FROM CLEAN DEVELOPMENT MECHANISM PROJECTS: ISSUES AND OPTIONS FOR PROJECT-LEVEL ASSESSMENT 9 (1999), available at http://ies.lbl.gov/iespubs/43704.pdf.
174. The governing body of the CDM has established guidelines for determining when the emissions reductions achieved by a project are additional. Only reductions meeting these guidelines can generate credits for its funders that should be considered to be part of the nation's baseline emissions. In essence, the project proponent must demonstrate that due to various factors such as the existence of credible and realistic alternatives to the project and the financial unattractiveness of the project, the project would not likely be pursued in the host country in the absence of the incentive provided by CDM emissions credits. See Sixteenth Meeting of the Executive Board, Bonn, F.R.G., Oct. 21-22, 2004, Tool for the Demonstration and Assessment of Additionality (Annex 1), available at http://cdm.unfccc.int/EB/016/ eb16repan1.pdf;
175. see also MISSION INTERMINISTÉRIELLE DE L'EFFET DE SERRE ET AL., CLIMATE CHANGE: GUIDE TO THE KYOTO PROTOCOL PROJECT MECHANISMS 15-18 (2d ed, 2004) (Fr.).
176. EUROPEAN COMM'N, supra note 7, at 3.
177. Id. at 5.
178. Id. at 9.
179. See id. at 3-5, 19.
180. Cf. Glenn Wiser, Frontiers in Trade: The Clean Development Mechanism and the General Agreement on Trade in Services, 2 INT'L J. GLOBAL ENVTL. ISSUES 288, 304 (2002), available at http://www.ciel.org/Publications/Frontiers_CDM_Wiser.pdf (stating that under rules being established for the trading of emissions credits generated through joint implementation and the CDM, "any trader whose home government is not Party to the [Kyoto] Protocol will not be able to 'own' CERs, though it may still be able to provide financial services relating to their trade").
181. See, e.g., Fred Pearce, European Trading in Carbon-Emission Permits Begins, NEW SCIENTIST, Jan. 6, 2005, http://www.newscientist.com/article.ns?id=dn6846 ("Countries outside the EU, such as Norway, have already said they would like to join and issue their companies with emissions allocations that could, in the future, be traded on the EU market").
182. Cf. WILLIAM BLYTH & MARTINA BOSI, INT'L ENERGY AGENCY & OECD, LINKING NON-EU DOMESTIC EMISSIONS TRADING SCHEMES WITH THE EU EMISSIONS TRADING SCHEME 25 (2004), available at http://www.iea.org/textbase/papers/2004/non_eu.pdf (discussing potential economic distortions caused by the reallocation of emissions credits).
183. Oliver Tickell, Prospect of Tighter Euro Allowances Boosts Price, TIMES (UK), Mar. 30, 2007 at 10, available at 2007 WLNR 6009369.
184. See Chicago Climate Exchange, http://www.chicagoclimatex.com/ (last visited May 1, 2007).
185. See Jeannie Kever, For Our Planet's Health, HOUS. CHRON., Mar. 18, 2007 at *2, available at 2007 WLNR 5214777 (noting the growing availability of vendors selling carbon offsets);
186. Jack Cox, Wedded to a Clean World, DENVER POST, May 8, 2006, at F1, available at 2006 WLNR 8114824 (same).