Another Legal Victory in Climate Change Battle

Posted by: John Carey on February 6, 2009

When Washington, in the years of the Bush Administration, failed to take action against global warming, environmentalists and states backing such action fought back in the courts. They asked the Supreme Court to determine if the Environmental Protection Agency had authority to regulate greenhouse gases, for example. And they tried a number of new, untested legal theories. In one case, a group led by Friends of the Earth sued to force the Overseas Private Investment Corp and the Export-Import Bank of the U.S. to consider the greenhouse gas emissions emitted by the projects they help finance. The legal grounds: the National Environmental Policy Act (NEPA), which requires environmental assessments of project.

The legal assault has been remarkably effective overall. The big case, of course, was the Supreme Court case. In April 2007, the Supreme Court ruled 5-4 that EPA has the authority to act. Among many other consequences, it gave the overall legal assault a tremendous boost.

Now comes another win, this time in the Overseas Private Investment Corp and Export-Impact Bank case. In a settlement agreed to on Feb. 6, the Export-Import Bank will begin taking carbon dioxide emissions into account in evaluating fossil fuel projects and will create an organization-wide carbon policy. Meanwhile, the Overseas Private Investment Corporation agreed to establish a goal of reducing greenhouse gas emissions associated with projects by 20 percent over the next ten years. Both agencies also agreed to increase financing for renewable energy.

Environmentalists are ecstatic: “This settlement is a substantial victory for our climate,” says Michelle Chan of Friends of the Earth. “It will force federal agencies to move away from fossil fuel projects and account for the climate impacts of their lending.”



BusinessWeek correspondents John Carey and Mark Scott, cover the green scene, keeping on top of the business aspects of energy, the environment and climate change, as well as the technologies, policies, markets and people that are shaping how the earth's resources will be used in the century ahead.

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