July 31, 2016
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Modernizing Energy Policy in New York State
Our input is helping to improve energy policy decisionmaking in New York State, which recently announced an ambitious mandate to boost clean energy. We have submitted numerous comments to the New York State Public Service Commission, suggesting several changes in the design of its Clean Energy Standard to ensure that the state’s policy goals can be met in the most-cost effective manner. In its final order, the Commission adopted several of our suggested changes. Most notably, the Commission relied on our comments in deciding to calculate zero-emission credit payments based on the Social Cost of Carbon. This marks a major success in our ongoing efforts to encourage government agencies to use the Social Cost of Carbon as a tool when designing policy.
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New Report: Self-Bonding in an Era of Coal Bankruptcy
Federal law requires coal companies to reclaim and restore land and water resources that have been degraded by mining. But at many sites, reclamation occurs slowly, if it all. This is partially due to problematic self-bonding policies for coal companies. Mining companies are required to post performance bonds to ensure the successful completion of reclamation efforts should they become insolvent, but regulators have discretion to accept “self-bonds,” which allow many companies to operate without posting any surety or collateral. As the coal industry experiences financial distress and coal companies declare bankruptcy, the viability of future reclamation work is endangered. Our new report offers recommendations to help regulators better assess coal companies’ financial health and take steps to curtail self-bonding. We recently submitted this report to the Office of Surface Mining Reclamation and Enforcement, which has the authority to adopt these reforms.
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Comments to SEC on Environmental Disclosures
We recently submitted comments to the U.S. Securities and Exchange Commission on business and financial disclosures related to environmental risk. Specifically, we urge the agency to provide rules or interpretive guidance to ensure consistent and effective disclosure of risks from offshore oil and gas activities. Our comments demonstrate that offshore oil and gas operations, particularly in frontier areas like ultra-deepwater and the Arctic Ocean, create material risks that are not being adequately disclosed. We then encourage the SEC to require additional disclosure from companies on the likelihood, cost, and response plan for a catastrophic well blowout; spill prevention policies and practices; and comprehensive data on day-to-day environmental, health, and safety performance. The comments grew out of a project in our Regulatory Policy Clinic with Oceana, and we submitted them collaboratively with Oceana and the University of Chicago Abrams Environmental Law Clinic.
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On the Docket: Improving Regulatory Reform
The Office of Information and Regulatory Affairs (OIRA) plays a critical role in reviewing federal regulations and determining the path of regulatory policy. We recently began a new project that seeks to encourage a slate of reforms to improve OIRA’s reviews of rulemaking proposals and help ensure that new federal regulations increase social welfare. We will soon author a report outlining potential OIRA reforms, which we will share with a bi-partisan project advisory committee that includes several former OIRA administrators. After incorporating feedback from this group, we will work to encourage the incoming presidential administration to enact these reforms.
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In the News: NEPA Guidance, Coal’s Future, Financial Regulation
The White House Council on Environmental Quality recently released new guidance for federal agencies on how to consider climate change impacts in National Environmental Policy Act reviews, and Jayni Hein discussed the new guidance with Scientific American, E&E News, and Inside Climate News. A recent issue of CQ Researcher examined the coal industry’s future, with several insights from Richard Revesz. In a recent SNL article, Revesz also discussed how cost-benefit analysis can be used in financial regulation, echoing the messages of his recent paper on the issue.