Evolving International and Regional Mandates for Climate Issues

As tackling climate change becomes a greater global imperative, businesses

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    As tackling climate change becomes a greater
    global imperative, businesses
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    Evolving International and Regional Mandates for Climate Issues
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    • 1. Evolving International and Regional Mandates for Climate Issues The Coming Climate Rules Jeffrey C. Fort Partner Dentons Chicago +1 312 876 2380 Jeffrey.fort@dentons.com CLE Seminar for In-House Counsel June 5, 2015 Chicago, Illinois
    • 2. The Scope of Today's Conversation June 5, 2015 2 • The Chicago and Illinois role - global businesses and global risk capital • The Scientific Consensus • The "Road from Lima to Paris" -- goodbye Kyoto? • The effect of the US -China climate accord • The North American expectations • Obama Clean Power Plan • The RFS drama for bio-fuels • The coming rules on HFCs • States and provinces in the lead: California, Quebec, Ontario, BC and Alberta • Coming to the BRICs? • Coming to all countries, developing or developed: INDCs • Be at the table or be on the menu? Legal issues and business risks in the near term
    • 3. Managing Legal Risks for Chicago and Illinois Entities: Home to global entities and local entities with global ambitions June 5, 2015 3 • Chicago's Rank Among World's Most Competitive Cities • International headquarters -- #7 • Shared services center -- #6 • Software development -- #8 • Financial services -- # 4 • Life sciences R&D and production -- #7 • Changing Climate and its Threat to Food Security • Chicago Council on Global Affairs 2014
    • 4. The Science of Climate Change • Definitions and vocabulary • The analyses and models • The 2°C Target • Risk Assessment Conclusion 4June 5, 2015
    • 5. Science June 5, 2015 5 • Greenhouse gases ("GHGs") are so named because they have been determined to have an effect of trapping heat in the atmosphere, leading to warming (hence "global warming"). These are measured on an equivalent basis to carbon dioxide over a 100 year time frame. Other principal GHGs are: • Methane (21 times more potent than CO2) • Nitrous oxide (310 times more potent) • SF6 (over 22,000 times more potent • Perfluorocarbons (PFCs) (thousands of times more potent) • Hydrofluorocarbons (HFCs) (hundreds to thousands of times more potent) The following slides depict some of the research and analyses which have been done to date. The fluorinated compounds are also subject to Montreal protocol and there is disagreement over which should apply. The Analyses and Models
    • 6. The Science June 5, 2015 6 Definitions How are climate models tested? Weather vs. Climate The CO₂ that humans have added to the atmosphere has caused an increase in the atmospheric concentration of CO₂. The graph shown here, called a Keeling Curve after the scientist who first developed it, represents the record of increased global atmospheric carbon dioxide concentration.
    • 7. June 5, 2015 7 Koshland Science Museum of the National Academy of Sciences Copyright © 2011 National Academy of Sciences. All rights reserved. What causes climate change? HUMAN INFLUENCE Models that also account for the greenhouse gases emitted by humans are able to explain this warming. Most of the observed increase in global average temperature since the mid- 20th century is very likely due to the increase in human-generated greenhouse gas concentrations.
    • 8. June 5, 2015 8 How will our decisions affect climate? TRANSLATING WARMING TO IMPACT Temperature increases and other climate changes may directly impact our food and water supply, ecosystems, coasts, and human health. The bars in the bottom box indicate what temperatures and impacts are expected under the high and low emissions scenarios, which are determined by our actions. Koshland Science Museum of the National Academy of Sciences Copyright © 2011 National Academy of Sciences. All rights reserved.
    • 9. Projected Precipitation by End of Century June 5, 2015 9
    • 10. Science June 5, 2015 10 Sea levels in next 100 years with different scenarios
    • 11. Science June 5, 2015 11 Acidification of oceans
    • 12. Science June 5, 2015 12 • Recommended that countries work to keep atmospheric temperatures to less than a 2°C rise from 1990 baseline; estimated to require 80% reductions in CO2e from baseline. • Clearly, levels of uncertainty. It has been argued that even if a 5% chance of being wrong, the cost of doing possibly unnecessary things is small when consider the damage from not taking action. • Clearly there are natural variations in climate. Recent history may be abnormal in relative quiescence in climate. Consider temperature rise just from developed nations and 7 billion people. What happens when world has 9 billion people and developing countries become developed? • A current efforts of the United Nations is to get all countries to make a commitment on their plans for their effect on the climate Recommendations for regulatory philosophy
    • 13. A Short History on UN actions June 5, 2015 13 • Before UN took on Climate • Rio Treaty (1992): United Nations Framework on Convention on Climate Change (195 Parties) • Kyoto Protocol (1995): Binding commitment to reduce emissions for "Annex I" Countries • Conference of the Parties (annual) • Paris COP (2015) to succeed Kyoto Protocol • Intent is not to have a "treaty", a but set of published national plans
    • 14. The Major Contributors to Elevated CO2e June 5, 2015 14 • Electric generation: coal and fossil fuels • Transportation sector • Industrial gases (methane, nitrous oxides, SF6, PFCs, HFCs) • Forestry degradation and deforestation (#2 in CO2 impact globally!) • Consider this in context of Corporate Social Responsibility polices GHG Sources which are the focus of Mitigation
    • 15. Lima Conference of the Parties – Leading to Paris June 5, 2015 15 • US and China agreement - each set a target that it would meet; became a key precedent and the model. • No longer separate categories for developed and undeveloped countries. • Not expecting a “treaty”. • Substantial pledges [$10B+(US)] made to Green Climate Fund • Each country (or region such as EU) to make its own plan • Intended Nationally Determined Contributions or INDCs • May include mitigation, adaptation, technology transfer and capacity building • May include financial requests to Green Climate Fund • Reduced Emissions for Degradation and Deforestation (REDD) supported • International trading of credits a possible option. Paris COP intended to result in new Global approach
    • 16. What is the US intending to contribute? June 5, 2015 16 • States actions have led the way: California and the Northeast Greenhouse Gas Initiative (RGGI) on GHG and 30 states with Renewable Portfolio Standards • Massachusetts v EPA, __ U.S __ (2007) ordered EPA to take action based on accumulated record regarding clime impacts • Stimulus bill provided expanded tax incentives for renewable energy electricity generation facilities and new technologies (mixed record) • EPA final actions since 2009: • Substantially increased Motor Vehicle fuel standards and heavy duty diesel engine standards • Adopted “Tailoring Rule” to address GHG permitting issues under Clean Air Act • Adjusting Renewable Fuel Standard with respect to ethanol and biofuel mandates • Substantial proposed rules for new and existing electric generating units Existing measures which count toward the baseline
    • 17. The Obama Climate Change Efforts June 5, 2015 17 • The U.S.- China Climate Change Agreement • The U.S. INDC from Lima COP • 26-28% reduction from 2005 baseline by 2030 • Proposed EPA Actions • To restrict carbon dioxide emissions from electric generating units • To restrict use of hydrofluorocarbons in industrial uses • Standards to promote increased energy efficiency • To restrict methane emissions in oil and gas used for electricity Several Executive Orders and Agency Actions
    • 18. EPA’s Recent Record in the Courts June 5, 2015 18 • Mass v EPA and Chevron v NRDC are guideposts. • In Mass, the Court held EPA could not refuse to act in light of the evidence in its record with respect to Greenhouse Gases (GHGs) being a pollutant. Agency action unreasonably withheld is reviewable for plaintiff with standing. • In NRDC, (Scalia) held that if the statute is ambiguous, a reasoned agency approach interpreting the statute would be upheld. • EME Homer City v EPA (6-2), Court upheld the EPA Cross State Pollution Rule (”CSPR”) holding; EPA acted within authority to require states meet FIPs, including its budgeted "amounts" that "contribute significantly to interstate pollution." ("Good Neighbor"). Allowed EPA to set uniform cost factors for budgets. Lower courts' decision to give states another chance and requirement to use "proportionality-based limits" on EPA authority were not statutorily required nor practicably achievable. • Dissent attacked majority based on "undemocratic" governmental actions. • UARG v EPA Court upheld most of EPA’s rule for major new and modified sources of CO2e. Reversed only for sources which would be regulated only because of CO2e emissions. If major for other pollutants, then permits could also regulate CO2e emissions. • Limiting language being emphasized in comments on the Clean Power Plan: Supreme Court rulings have generally favored EPA
    • 19. Same principles applied to climate cases June 5, 2015 19 • The "Tailoring Rule": Utility Air Regulatory Group v EPA • Both sides won? • Court took only one issue out of several that had been decided below. • One majority (5-4) held that EPA went too far on the specific PSD rule • Another majority (7-2) upheld EPA interpretation of the "anyway" sources to uphold the rule as applied to the vast majority of sources. • The ruling upheld EPAs authority to regulate GHGs in permits if the source was already "major" for NAAQS (criteria) pollutants. • Allows EPA to apply BACT case by case • EPA must justify control of GHGs on a program-specific basis, so a narrowing of Massachusetts • EPA warned to hew close to statutory authority and not "lay[] claim to extravagant statutory power over the national economy." based on limited textual provisions.
    • 20. Utility Air Regulatory Group v. EPA How will this language affect review of the sec 111(d) rules? • “The fact that EPA’s greenhouse-gas-inclusive interpretation of the PSD and Title V triggers would place plainly excessive demands on limited government resources is alone a good reason for rejecting it; but that is not the only reason. EPA’s interpretation is also unreasonable because it would bring about an enormous and transformative expansion in EPA’s regulatory authority without clear congressional authorization. When an agency claims to discover in a long-extant statute an unheralded power to regulate ‘a significant portion of the American economy,’ … we typically greet its announcement with a measure of skepticism. We expect Congress to speak clearly if it wishes to assign to an agency decisions of vast ‘economic and political significance’” (emphasis added) 20June 5, 2015
    • 21. The Principal EPA Proposal: Clean Power Plan • EPA released two proposed rules on June 2, 2014 (published on June 18, 2014): − EPA’s “Clean Power Plan” would regulate CO2 emissions from existing power plants under CAA section 111(d) and require revised state plans for those existing power plants − EPA also published proposed CO2 standards for modified and reconstructed units under section 111(b) • Previously, on Sept. 20, 2013, EPA published related CO2 performance standards for new power plants • Even if you are not operating an EGU, proposal could have several effects on businesses outside energy sector • Energy reliability and co-generation options to control costs • Energy efficiency equipment, measures and credits So here is a high level quick overview: 21June 5, 2015
    • 22. Clean Power Plan Basics • What does the Clean Power Plan require? − Each state with fossil fuel-fired generation must meet interim CO2 emission goals during a 2020-2029 period and a final goal by 2030 − EPA has calculated rate-based goals for each state using a basic formula: − The state goals vary in stringency, but for at least some states, e.g. AZ, EPA’s goals would likely require retirement of all coal-fired plants within their borders 22June 5, 2015
    • 23. Clean Power Plan Basics • EPA set goals for each state, incorporating its analysis of achievable CO2 reduction requirements into each state’s goals? − EPA’s four “Building Blocks” 1. Heat rate improvements at affected units 2. Environmental dispatch 3. Expanded low- or zero-carbon generation 4. Demand-side energy efficiency programs − The Building Blocks are EPA’s proposed “best system of emission reduction” or “BSER” for CO2 emissions from existing fossil fuel-fired EGUs − Allows states to claim credit for all RPS, for nuclear, and for other regulations in place. − Allows for consideration and crediting for EGU regulations in state plans with respect activities ”beyond the fence line” of the power plant. 23June 5, 2015
    • 24. Clean Power Plan Basics • What must states do to comply with the Proposed Clean Power Plan? • States must submit 111(d) plans to EPA, and the proposed rule identifies different types of plans that might be approvable: • A state-driven or utility-driven “Portfolio Approach” • Rate-based CO2 limits applied to affected EGUs • Mass-based CO2 limits applied to affected EGUs • Multi-state emission allowance trading plan • A TBD Federal plan? Or make a cogent proposal, either by utility, state or other body, 24June 5, 2015
    • 25. Clean Power Plan Basics • EPA proposes to evaluate the approvability of state plans based on four general criteria: • Enforceable measures that reduce CO2 emissions from EGUs; • Projected achievement of emission performance equivalent to the goals established by EPA, on a timeline equivalent to that in the emission guidelines; • Quantifiable and verifiable emission reductions; and • A process for biennial reporting on plan implementation, progress toward achieving CO2 goals, and implementation of corrective actions, if necessary 25June 5, 2015
    • 26. New Developments & Timeline • Regulatory Actions Since Proposal: • Extensive original public comment period • Originally 120 days; extended another 45 days until 12/14 • More than 2 million comments received • Notice of Data Availability (NODA, 10/30/14) • Seeking additional comment (by 12/1/15) on certain issues raised during stakeholder/public comment processes, both easing and strengthening obligations: • "Glide path"/additional time or flexibility to states to meet interim targets • allowing credit for reductions prior to 2020 • Phasing in building blocks 1 and 2 • BSER • Additional opportunities for natural gas, including new NGCC units and co-firing • Regional approach to RE targets, based on more realistic regional availability of RE • Calculating state-specific goals: use of multi-year baselines and alternative uses of data sets June 5, 2015 26
    • 27. New Developments & Timeline June 5, 2015 27 • Regulatory Actions Since Proposal cont.: • Guidance on Conversion to Mass-Based Equivalents (11/6/14) • Requested by multiple commenters • Converts CO2 emissions/unit of generation (lbs/MWh) to total metric tons CO2/year • To provide states with additional flexibility to develop plans which could include combining new and existing EGU rules, interstate trading and other regional strategies • Proposes two non-exclusive strategies: • Generation from existing covered EGUs using historical data (EPA used in June proposal) • Generation from existing affected and new EGUs using combination of historical and projected data • Doesn't alter currently proposed state target rates
    • 28. New Developments & Timeline • Regulatory Actions Since Proposal cont.: • Revised Framework for Assessing Biogenic CO2 Emissions from Stationary Sources • EPA will likely approve states' reliance on sustainably-derived agricultural and forest-derived feed stocks • Should incentivize further use of biomass as alternative fuel • FERC National and Regional Technical Conferences (Feb-March 2015) • Continued stakeholder outreach June 5, 2015 28
    • 29. New Developments & Timeline • Re-packaging of Rules and New Dates -- January 2015 • Delay for Issuance of New EGU Rule (111b) - now due "Mid-Summer" 2015 • Proposed 9/13; published 1/14; comment period ended 5/9/14; was due for final 1/15 • EPA: more time needed to consider comments, NODA and cross-cutting issues • Other potential practical and legal rationales? • Delay of Clean Power Plan until "Mid-Summer" • How long a delay and impacts on plan milestones? • Also Modified/Reconstructed Rule to be finalized in same time period • EPA begins drafting a federal model plan (1/15) • To be proposed for public comment in "Summer 2015" (August?) • A hammer and a guide? • What will be BSER? Can EPA go beyond the fence-line in a federal plan? June 5, 2015 29
    • 30. Legal Arguments Against the Proposal • Against: • Proposed rule usurps the role of states and treads into areas quintessentially within the purvue of state control; • EPA has changed its long-standing interpretation of "facility" in section 111(d). There is no authority for interpreting the term to extend to practices "beyond the fence line." • Recall the dicta in UARG v. EPA 30June 5, 2015
    • 31. Arguments in Favor of the 111(d) Approach • EPA is authorized to determine BSER and has broad discretion to do so • On a System-Wide Basis: • Both heat rate improvements at covered units (BB1) and increases in zero/low emissions or measures to reduce demand which, taken together, displace or avoid the need for generation from affected units (BB2-4) are components of "system of emission reductions" for the EGU • They either improve carbon intensity of EGUs in generating electricity or, because of the integrated nature of the grid and fungibility of electricity, they displace or avoid the need for generation and so reduce emissions from the covered EGU • Legislative history: term broadened from prior CAA focus on technological systems • Both EGUs and states may and do undertake these types of measures • States have always defined their implementation plans to fit their conditions - - just have to meet EPA minimums June 5, 2015 31
    • 32. Legal Support for the Clean Power Plan Alternative approach redefining BSER as "reduced generation" • Building Block 1 plus reduction of covered EGUs' mass emissions achievable through reductions in generation of specified amounts from those EGUs • Building Blocks 2-4 not components of system but rather bases for quantifying reductions in emissions resulting from reductions in generation at covered EGUs • "Best" and "adequately demonstrated" because EGUs make own adjustments, states have authority to impose reductions, and reductions come at reasonable costs, promote technology and maintain reliability Gives credits for all the measures a state has in place with respect to electrical generation, not just on stationary sources which emit the regulated pollutant. Renewables and nuclear are also electric generation sources and states may consider those if they so choose. (as well as efficiency measures) Opportunities or credits may be recognized as cost-effective alternative to reduce costs. Efforts such as Green Buildings or efficiency offset projects may count? ("white tags" or Green-e) June 5, 2015 32
    • 33. Regulatory/Litigation Timeline for Clean Power Plan (as currently proposed) June 5, 2015 33 Fall, 2015 Petitions for administrative and judicial review of 111(b) & (d) rules filed within 60 days of publication 6/18/2014 111(d) Proposal published 12/2014 Extended comment period ended for 111(d) Proposal; NODA "Mid-Summer" 2015 111(b)& (d) Final Rules; federal plan proposed 6/30/2016* States submit complete implementation plan or initial plan or requests for extensions, *dated from final rule 6/30/2018* EPA issues decisions on 2017 submitted plans; multi-state plan submissions due June, 2019* EPA issues decision on 2018, multi-state plans January, 2020 Compliance Period Begins Fall 2017 Petitions for judicial review due within 60 days of publication of EPA decision on 2016 plans Mid to Late 2017 DC Circuit likely to rule on judicial challenges to 111(b) and 111(d) final rules Fall 2018 Petitions for administrative and judicial review of EPA decision on 2017 plans filed within 60 days Mid-2019 Supreme Court decision possible on challenges to initial rules; DC Circuit rulings on challenges to 2016 state plans (challenges to 2018 regional plans likely decided in 2020) 2014 2015 2016 2017 2018 2019 2020 6/30/2017* EPA issues decisions on 2016 submitted complete plans States granted 1-year extension file implementation plans; multi-state plans file progress reports
    • 34. Major Issues Raised Through FERC Process • Interim Compliance/Glide Path • Many states, utilities oppose interim compliance periods as resulting in a "regulatory cliff" with compliance requirements beginning as early as 2012 • And need time for permitting, building of infrastructure for NG and renewables • 4/15 NERC Phase 1 report supports this conclusion • Some seek compliance extension even beyond 2030 • EPA, others disagree: States have flexibility and can average over decade • CA, RGGI wouldn't require more time • Some (EEI) suggest more incremental reductions or states choose their own paths (14 states, NRECA) • Inextricably tied up with reliability - easing path could obviate concerns June 5, 2015 34
    • 35. Major Issues Raised Through FERC Process • Reliability Issues • Key focus of FERC, ISOs/RTOs and PUCs • EPA: time and flexibility are key to ensuring reliable energy • Initial NERC study expresses concern with maintaining resource adequacy within constrained time period due to potential retirements, insufficient access to natural gas, and challenges to increasing generation from renewable energy • Utilities, others agree • 4/15 Phase 1 report doesn't conclude inherent reliability concerns but calls for a formal reliability assurance mechanism • But other studies (Brattle, Analysis Group) see several types of capacity resources available, adaptive market rules and incentives, evidence of greater integration of renewable energy, and significant state flexibilities to address any reliability issues plus an evolving grid already heading this direction 35June 5, 2015
    • 36. Major Issues Raised Through FERC Process • Reliability Issues cont. • Numerous Calls for Reliability Safety Valve (RSV) • EEI seeks RSV in rule, to apply if unforeseen or issue could not be addressed prior to approval • Again, how raised, who decides, what gets done, role of FERC? • MATS model (outside the rule) where FERC provides advice, EPA acts with enforcement discretion • PJM proposes language for a RSV, Other ISOs/RTOs support RSV • Others want it to be strict, seldom used so as not to discourage compliance or investment 36June 5, 2015
    • 37. Major Issues Raised Through FERC Process • Mass-based approach to support market-based mechanisms • Position that EPA should facilitate voluntary adoption of this approach • Economically more cost-efficient; better for regional programs and trading • Clear and transparent price signal • Easier to monitor and enforce • Avoids RE and EE measurement and crediting issues • But concerns with penalizing growth - provide a formula to allow growth (Entergy) • Regional approach better allows market-based solutions and reflects grid realities • Supported by ISOs (MISO saves $3 billion/yr , SPP says it will cost the same) • Midcontinent States Environmental and Energy Regulators (MSEER) group efforts; Western states • But recognition that insufficient time to develop regional plans June 5, 2015 37
    • 38. California, Canadian provinces and RGGI June 5, 2015 38 • EGUs in California, Northeast (except NJ) are largely unaffected by Clean Power Plan in terms of emission reductions • California's AB32 an economy wide cap and trade system underway and being extended to 2030. Power sector, transportation and manufacturing are now regulated. Producing substantial revenue from auctions of credits. Robust offset market for price containment. • Quebec and Ontario have "joined" California approach; Alberta ready to increase its climate control requirements, and BC is also raising its requirements (to finance LNG facilities) • Governor Brown has extended the duration of cap and trade through 2030 • Auctions of allowances have become a major revenue source for CA.
    • 39. The BRICS? June 5, 2015 39 • Each expected to submit its own INDC • Russia - 25-30% reduction from 1990 baseline by 2030 • China - expected to be the same as U.S. agreement • Brazil, India and South Africa are participants in Lima COP and are stakeholder groups such as World Bank's Partnership for Market Readiness
    • 40. Others and Developing Countries June 5, 2015 40 • EU: 40% below 1990 levels by 2030 • Canada: 30% below 2005 levels by 2030 • More stringent standards for heavy duty vehicles • Gradually phase out HFCs • Reduce GHGs from natural gas fired electricity, chemicals and nitrogen fertilizer • Reduce methane from oil and natural gas sector • Mexico: 25% reduction by 2030; 50% reduction by 2050 • 22% reduction in GHGs; 25% reduction in carbon black • Includes adaptation and resilience measures (focus on extreme weather and poverty) • Gabon: 50% below 2000 baseline by 2025 • Forestry and land use practices identified and slight reduction in fossil fuel use.
    • 41. Looking further at China (through U.S. agreement) June 5, 2015 41 • 20% target for power from renewables and nuclear appears quite do-able; • Announcement promised a long list of other actions: • Joint research and technology development: • A renewed commitment to the U.S.-China Clean Energy Research Center, including continued funding for three existing tracks on building efficiency, clean vehicles and advanced coal technology and launching a new track on the energy-water nexus; • Advancing Major Carbon Capture, Utilization and Storage Demonstrations: and a new Enhanced Water Recovery (EWR) pilot project to produce fresh water from CO2 injection into deep saline aquifers; • Enhancing Cooperation on HFCs, highly potent greenhouse gases used in variety of construction and industrial applications, • Launching a Climate-Smart/Low-Carbon Cities Initiative: In response to growing urbanization and increasingly significant greenhouse gas emissions from cities in reducing carbon emissions and building resilience; • Promoting Trade in Green Goods: Encouraging bilateral trade in sustainable environmental products; and • Demonstrating Clean Energy on the Ground: Additional pilot programs, feasibility studies and other collaborative projects in the areas of building efficiency, boiler efficiency, solar energy and smart grids. • Independent of the U.S. Agreement, China is expecting to implement a nation-wide, carbon trading program to begin in 2016. Budgets and allocations to be set by the government; offsets also allowed. See China: An Emissions Trading Case Study (March 2015) by IETA and CDC Climate Research "Historic" in political and precedence; targets are achievable
    • 42. Beyond "Mitigation" as Required by Law June 5, 2015 42 INDCs may expressly include "Adaptation measures" Adaptation to climate change is seen my many countries as an urgent manner, and one that should be included in INDCs just as mitigation is. • "Adjustments in ecological, social, or economic systems in response to changes in actual or expected climate "stimuli" and their effects or impacts. It refers to changes in processes, practices or structures in order to moderate potential damages or to benefit from potential changes associated with climate change." • Not just for developing countries -- Hurricane Sandy and re-construction of New York harbor -- Florida flood protection and salt-water incursion into groundwater -- DoD manual on adaptation -- "Resilience" measures in cities, such as storm water control and heat islan • Examples in developing world -- Resilience to extreme weather, including droughts and floods -- Diversification and preservation of crops and food supply Opportunities for many businesses
    • 43. Beyond "Mitigation" (part 2) June 5, 2015 43 Corporate Social Responsibility • Global and local benefits: REDD+ projects • These Avoided Deforestation projects not only stop illegal logging and wasting of rainforests and rare habitats, but also provide community benefits such as schools and jobs for indigenous residents. They are financed by sales of the carbon credits which are earned by proof the conservation measures were carried out. • Supply chain criteria • Some corporates, particularly in the food industry, are requiring supply chain entities to make certifications about sourcing of materials. Assurances that foodstuffs and oils are not from degraded or deforested lands is one set of criteria. • Carbon disclosure project measurement (carbon footprint) • Increasing looking to include not just the direct impact of activities, but may allow verified offset projects to be counted. • Public profile
    • 44. Beyond Mitigation (Part 3) June 5, 2015 44 • Clean Development Mechanism recognized site specific projects in non- developed world to create Certified Emission Reductions that could be sold and used in the European Trading System. Has moved to more standardized methods and restricted to the Least Developed Countries • "Compliance" offsets for California, Quebec, Ontario & Alberta • A recognized methodology or a new one: anywhere in US and specific provinces (Alberta a special case and changing) • Typically start with a "voluntary registry" [often also used for CSR purchases] • Resultant credit sold into compliance market [tool to control costs in that market] • Industrial gases may be attractive candidates (methane, nitrous oxides, HFCs) • Offsets may also be used for offset of tax obligation in several jurisdictions: e.g. Mexico, South Africa, BC Offset projects - beyond business as usual (BAU) and not required by law
    • 45. "In and of Our Communities" June 5, 2015 45 • Deforestation the second largest contributor to CO2e • Asked to represent Forestry Administration of Cambodia for sale of REDD+ credits as a pro bono matter • American Lawyer awarded "Global Citizen of the Year" and Pro Bono Deal of the Year (Environmental) awards to Dentons for the Agreement for sale of REDD+ credits. • The project depends on continued sales of REDD+ credits. There is an ample supply. Perhaps consider as part of your CSR efforts. • Or ask us. We do many pro bono projects with clients. • With 125 offices in over 50 countries; we are well positioned to help global companies with local issues or local companies with global issues. Pro Bono -- a long tradition of the Chicago Office
    • 46. Combining REDD+ Projects for Emerging Economies • Investment in REDD+ projects in locale of importance for any project. • Produces a benefit for community development, bio-diversity, and GHGs, while producing a potential commodity. • Price of REDD+ carbon less than internal corporate cost reserve ranges. April 21, 2015 46
    • 47. Thank You! We are very interested in your feedback - please take a moment to leave a note about this class and presenter(s) on the back side of your evaluation form. © 2015 Dentons. Dentons is an international legal practice providing client services worldwide through its member firms and affiliates. This publication is not designed to provide legal or other advice and you should not take, or refrain from taking, action based on its content. Please see dentons.com for Legal Notices. Jeffrey C. Fort Partner Dentons jeffrey.fort@dentons.com 312-876-2380 Recognized by Chambers Global, “Best Lawyers in the US” in categories of Climate Change and Environmental and by American Lawyer for Global Pro Bono Deal of the Year (Environmental) and Citizen of the Year (2014).
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