EPA Creates Office of Sustainable Communities

Perhaps this is what we need to get local communities moving with sustainability initiatives. This, and money.

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Yesterday, the Securities and Exchange Commission voted (narrowly) to issue guidance to regulated companies about their exposure to climate change regulation.

Appropriately, for a non-science agency, the Commission did not weigh in on the debate about climate change. Their decision, though, acknowledges that the climate change issue is altering domestic and international laws and regulations, and that investors should know how those changes will affect their investments.

Companies are supposed to report how their interaction with the environment impacts their financial health, through the lenses of regulatory compliance and enforcement actions (read: cleanups or litigation). As the Code says, “Appropriate disclosure also shall be made as to the material effects that compliance with Federal, State and local provisions which have been enacted or adopted regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, may have upon the capital expenditures, earnings and competitive position…”

This new guidance does two things to clarify this requirement as it regards climate change. These are topics that we have been counseling people for over a year:

1) It acknowledges that “provisions” (laws and regs) based on climate change are being made in operational and trade legislation, and these provisions will impact business operations and profitability in the same way that RCRA requires companies to handle their hazardous waste properly.

2) It brings to regulatory reality the fact that any future carbon legislation (tax or cap/trade) will impact business operations (some businesses more than others, if they use more carbon-based energy). This would be similar to government fees on landfilling waste.

In one place, though, the guidance may be well-intentioned, but unenforceable. The SEC is asking companies to forecast – and report – how the physical impacts of climate change (rising and warming seas, different weather patterns, etc.) will affect the company materially. We encourage our clients to evaluate their businesses with this in mind because we see exposure to climate risk as one component of a sustainability strategy, but I don’t see why the SEC should require them to do so.

I see this as an admirable goal – one that a true forward-thinking company is already considering – but one that sounds like legislating good management.

Your thoughts?

Attorney Sid Trant with the law firm Bradley Arant Boult Cummings has been on the forefront of the green and sustainable movement in the south for some time. His firm has sponsored green events in the region and Sid himself has spoken at these events. Sid and Bradley Arant Boult Cummings have been placing ad/articles about green in law and what businesses should look out for in the local business journal for probably the past year or so.

In the December 4, 2009 issue of the Birmingham Business Journal they placed another ad/article titled “The Greening of Environmental Law.” It is a good read but three statements stuck out.

“We expect that litigation and regulation surrounding this area [greenwashing litigation] will grow exponentially in the coming years.”

“We are already beginning to see increased use of Green contract provisions, and we expect to see a great deal more in the future.”

Each of these statements reflects how structured environmental improvement, or “greening,” is becoming more and more ingrained into business and society. Mr Trant’s message here is that society’s framework is adapting, and smart professionals (lawyers, in this case) are keeping up.

When companies decide that they need to green their products they should pay special attention to rules, regulations, laws and basic ethics. Its good to have a Sid Trant or a Resolutions on your side. It is much better than sitting across the table from them.

Conservative - one who values “a society that conserves its soil and water” in order to sustain and replenish its natural resources for the benefit of all life.

I saw this in an article on the blog Switchboard, from NRDC. It was written by Chris Chanlett who wrote an op-ed commentary in the Charleston Gazette titled Why I am a “Friend of Wood.”

Chris is calling for politicians to provide some genuine moral leadership and protect Appalachia’s peaks and the citizens who live there. I could summarize what he said but I encourage you to visit the links above to so see how others are making a difference. And not just tree-hugging liberals but conservatives as well, no matter your definition.

I seem to have many friends and business associates that feel that just because we are Americans we are set. Things come our way because we are preordained or somehow chosen by a higher authority to continually be the leaders in democracy, innovation and wealth. Nothing can be further from the truth and on the eve of the SEC championship football game between the University of Alabama and the University of Florida I wanted to give an example of what could happen.

For generations, Alabama football fans believed they had the best football team in the country. And for good reason. They have 12 national championships and countless SEC championships, all-american players and a vocal fan-base. They had Bear Bryant, arguably the best coach in football. They had tradition and to some that is all they needed, but something happened along the way. College football changed.

To begin with scholarships were limited so the best high school players started going to their competitors schools. Alumni at these schools started to pump money into facilities such as weight rooms, practice facilities and enlarging the stadium. With the growth of multiple sports channels, these same teams started to show up on TV week after week. Assistant coaches with head coaching aspirations, many who worked for the Bear, turned these programs around – turning them into powerhouses.

So what did Alabama do? To start with they languished and watched other programs pass them by. They made bad coaching choices and couldn’t seem to get it together. They rested on past laurels and thought, “we’ll be fine, we’re Alabama.”

Eventually, Alabama upgraded the weight room, improved the practice facilities and enlarged the stadium. Then they went out and spent a load of money on a proven coach who could bring them back. The result, they are more competitive. Their ROI is pretty good seeing that if they win tomorrow they will play for the national championship.

And this story isn’t unique to Alabama, there are many programs that had to change to be competitive in a different football environment.

So what does this have to do with America and sustainability? We are facing a unique time in our history, a fork in the road if you will. We can keep doing things the way we always have or we can accept that the game has changed and we need to improve our facilities and hire the right coaches who will keep us at the top. If we don’t we run the risk of being passed by countries who are continuing to innovate and come up with better, efficient and green products. We run the risk of continuing to be dependent on other countries for our energy needs. It’s not too late but we need to get past this idea that it’s just going to happen.

I do believe that there is something special about being an American. This country was built by millions of people who left their homeland and families to invent a better life for themselves no matter the odds. Some did better than others but that drive was there for everyone. It’s in our DNA.

If you haven’t heard it by now, “ClimateGate” is sweeping the airways. At least the conservative and green airwaves. A few weeks ago, hackers broke into the emails of the Climate Research Unit of The University of East Anglia and have dug up what they say is a hoax to support a climate change agenda. I won’t go on about it here but you can read plenty at the Wall Street Journal and rebuttals at sites such as Huffington Post.

No matter what side you are on in this debate, if you are in business then you should treat this as a real issue. You may think this is completely fabricated but more than likely, the businesses you will be doing business with believe it is real and they will require you to act or they will take their business elsewhere. And that is a business climate change you don’t want to face.

Sustainability is not about climate change. It is about managing and integrating your financial bottom line with social and environmental concerns as well. Businesses are looking to ensure long-term viability and they should do that by using resources wisely and reducing their environmental and social impacts. And guess what, If global warming is a legitimate phenomenon then we are on our way to helping change it. If it is not, then we are on our way to saving ourselves a lot of money. And who can’t get on board that.

I read a BBC story today about Paul Sukhdev, an economist and banker with Deutsche Bank who who was promoting the UN Environment Programme’s program of paying heavily forested countries for NOT logging. The program, called “Reduced Emissions from Deforestation and Degradation (REDD), is the UN’s market-based program that issues carbon credits as financial incentive to dissuade forest owners from logging.

The push behind this program is to invest in the most cost-effective methods of curbing carbon emissions globally, which is conservation. (This is eerily similar to and similarly simple as the most cost-effective energy saving measures locally, which come from increased efficiency.)

I am looking for the primary sources of some information referenced by Mr Sukhdev; studies that show money spent on nature preservation provided rates of return of between three and 75 times the initial investment. Seventy-five times!

He’s referring to the side effects of preservation, such as protection of fresh water systems through forest preservation, or protection of coral reefs that provide huge amounts of food for humans worldwide. A great deal of work has gone into calculating the economic impacts of ecosystems and their impacts on human life, but I haven’t found information on the ROI of investing in conservation or environmental protection.

If anyone has information about these or similar economic studies referenced by Mr Sukhdev, please let us know.

I have to give the new EPA credit: it was a bold move to propose that carbon dioxide (among other gases) can be regulated as a pollutant yesterday. Yet, anyone who has been paying attention will recognize that this decision was not made in a vacuum. Not by a long shot.

When in October both major Presidential candidates openly supported some kind of method for putting a price on carbon emissions, and there has been louder discussion of carbon and its role in climate change (or lack thereof) in the halls of Congress, then it was only a matter of time before one party or the other made the opening shot. The next sixty days – the open comment period before any proposed rules are published – will be very interesting.

This has been a possibility since the 2007 Supreme Court ruling that paved the way for EPA to make this listing by ruling that greenhouse gases are air pollutants as defined by the Clean Air Act, and I believe that ruling was the wake-up call to some in industry to begin looking for alternatives. Those individuals or industries that had ignored the Court’s ruling, or – worse – ignored its implications, have been slapped awake and will take personal interest in the Washington discussions over the next two months.

To be clear, yesterday’s EPA proposal specifically refers to greenhouse gases emitted by motor vehicle engines. However, those who are planning for the future should see that the gases that make up emissions from motor vehicle engines are the same as those from other sources. What other sources?

Locally, our utility (Alabama Power) generates approximately 70% of its electricity using coal – the highest carbon-emitting source for power generation. It did not go unnoticed by us at ReSolutions that Southern Company applied for a revised permit for a power plant outside Albany, Georgia this year. They plan to convert that plant from coal-fired to wood-fired over the next two years. Wood, while not zero-carbon, releases less carbon dioxide per BTU than coal or natural gas or oil, and is renewable. When wood grows (or re-grows in the case of the tree plantation), it sequesters CO2 again.

We also know that Southern Company has had at least one other pilot project to review replacing coal in its generation process, and therefore expect that the Albany, Georgia plant is not going to be the only plant to make the conversion from coal as Southern Company moves to insulate itself from the effects of the increased cost of burning coal and other fossil fuels.

The higher cost of burning fossil fuels in the future will mean increases at the pump and the meter that will hit each of us directly. Higher rates will mean personal and commercial innovations and efficiencies. I expect this will drive alternatives, too, on the local level. If there’s anything Alabamians hate, and reject year after year, it’s taxes. (Take a good look at our roads, schools and environmental enforcement for examples of what’s not being funded.) I expect a lot more people will figure out how much they can do with less energy.

– Keith Johns

The Supreme Court recently heard a case involving power plants and their use of water. NPR has the story, if you haven’t heard it.

Water is the next oil. I don’t know who said that first, but they were right and I’ve been repeating it for nearly two decades. This case is just another example of the difficulties that are going to arise in this nation as our population grows, and our access to abundant clean water decreases.

For so long in the USA, particularly in the wet South, abundant clean cheap water has been seen as practically inexaustable, and we have used it without considering waste. That is changing.

Here in the Southeast, Alabama, Georgia and Florida have been fighting a decades-long battle over water rights. That’s “decades” plural. Who are the competing consumers? Industries (including power plants), fisheries, endangered species, and individual human beings.

Water does not obey political boundaries. Water moves when and where it wants to (until the Army Corps of Engineers gets involved). When power plants or manufacturers use a lot of water, that much less water is available downstream and across state lines to the people and industries living there. When highly-treated potable water is used to water lawns and wash vehicles, that much less water is available for people to drink and ecosystems to survive. Where is the balance? Must it always be decided in a court?

Adding to the problem has been the local drought that has lasted several years, further reducing the baseline supply. This is a problem that has plagued the Southwest for a long time, and they have had to developed water conservation and restriction policies that work. The precedent has been set and the kinks worked out. The technologies and policies have been developed.

We won’t be able to exist without water any time soon. Fortunately, too, we don’t see a situation looming like is found in the “Dune” books. But to balance each set of needs throughout a watershed, each of us – as individuals, households, businesses, communities and utilities – needs to conserve water in a methodical way.

I’m sorry Southern Company, but this includes power plants, too.

Do you know that you can get credit for making energy savings changes to your home? If you change your windows or add insulation, these changes can be deducted from you income tax and in these times, every dime helps.

Finehomebuilding.com has posted a story under this same title and they have included a chart of credits and qualifications. Make sure you take the time to see what you can do on your own home. And the savings doesn’t just start with your credit. Making the changes should make a difference in your gas and electric bills.