战略与国际研究中心-Why-the-Trump-Administration-s-Environmental-Rollback-is-Increasingly-Seeing-Pushback_61页_6mb

Summary of "Assessing the Risks and Opportunities of Climate-Related Regulation and Litigation for the U.S. Power Sector"

Core Content

This White Paper, authored by Van Ness Feldman LLP, provides a legal risk assessment of climate-related regulation and litigation that the U.S. power sector may face over the next decade. It highlights the evolving regulatory and legal landscape, emphasizing the potential for increased carbon constraints and litigation, as well as opportunities from electrification trends.

Main Points and Key Findings

1. Federal Regulatory Pathways

• The Trump Administration has proposed to repeal the Clean Power Plan (CPP), a key federal climate policy, and is considering replacing it with the Affordable Clean Energy (ACE) Rule under Section 111 of the Clean Air Act.
• The CPP's repeal may be challenged in court, and even if upheld, future administrations could impose stricter regulations under Section 111(d) or other sections of the Clean Air Act.
• There is a significant possibility that future federal regulations could be more stringent than current ones, especially if a new administration prioritizes "deep decarbonization."

2. State and Local Policy Pathways

• Many states and cities are adopting or expanding climate and clean energy policies in response to federal inaction.
• Existing state policies include cap-and-trade programs, renewable portfolio standards (RPS), and energy efficiency standards.
• These policies could become more stringent or be adopted by new jurisdictions, increasing pressure on the power sector to decarbonize.

3. Climate Litigation Pathways

• Power sector entities face potential liability from tort lawsuits alleging that they caused climate-related damages.
• There is also a risk of lawsuits seeking to establish a constitutional or trust-based duty for governments to regulate greenhouse gases (GHGs).
• Although current litigation faces high hurdles, the increasing number of cases could drain resources and harm reputations.

4. Opportunities from Electrification Policies

• Climate policies promoting electrification of other sectors (e.g., transportation, buildings, and industry) could significantly increase electricity demand.
• This trend presents substantial market opportunities for the power sector.
• Decarbonizing power portfolios can reduce regulatory exposure and enhance the ability to meet growing demand from electrification.

Key Information

• Uncertainty and Interaction of Pathways: The White Paper notes that while the probability of any single regulatory or litigation pathway may be low, the cumulative risk is high due to the variety of potential approaches and their interdependence.
• Long-Term Risk: Even if the CPP is repealed, future administrations may still implement stricter regulations, and state-level policies are likely to continue evolving.
• Opportunity and Risk Alignment: Decarbonization efforts can both mitigate risks and create opportunities, especially in the context of electrification.
• Disclosure and Investor Pressure: Investor-owned utilities may face increasing pressure to disclose climate-related risks, which could have financial and reputational implications.

Conclusion

The White Paper concludes that the U.S. power sector will face significant long-term risks from climate-related regulation and litigation, but also substantial opportunities from increased electrification. Entities in the sector should integrate these potential outcomes into their planning and management processes to mitigate adverse economic impacts and capitalize on emerging market opportunities.