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AM ACC 1/1/2019
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(ACC Mentioned) Sippy Cups Market to Witness Robust Expansion of US$ 11,684.4 Mn by 2027
Jan 1, 2019 | Latest Market Reports
By Ankush Nikam
Sippy cups are likely to constitute an approximately US$ 8 billion global market in 2019, witnessing a moderate 4.4% growth over 2018. Delivering a wide selection of products in the baby care products category, the sippy cups market is slated for steady growth... -
Outlook ‘19: Caution Signals Flash for Chemical M&A Amid Downdraft
Jan 1, 2019 | ICIS
By Joseph Chang
Coming off a long stretch of strong chemical mergers and acquisitions (M&A) activity, the sector could cool off markedly in 2019, depending on the depth and length of the downturn in financial markets, which reflects expectations of slowing economic growth. -
EPA Is Shut Down, But Courthouse Doors Still Open
Dec 31, 2018 | BNA Daily Environment Report
By David Schultz
Federal courts are open even though the EPA’s doors are closed, but judges are already putting the brakes on a raft of cases as the government shutdown drags on. -
States Take Steps to Adopt Stricter PFAS Levels Than EPA Advisories
Dec 31, 2018 | Inside EPA
By Suzanne Yohannan
Expert panels in Michigan and New York -- two states that are grappling with contamination from per- and polyfluoroalkyl substances (PFAS) -- say that EPA's health advisory levels for the contaminants in drinking water are not adequately protective... -
New Hampshire Readies New Water Limits for Nonstick Chemicals
Dec 31, 2018 | BNA Daily Environment Report
By Adrianne Appel
New Hampshire will propose Jan. 1 new limits for contaminants in groundwater and drinking water that are expected to be tougher for industry to meet. -
Toxic Dog Food Class Action Stumbles on Jurisdiction
Dec 31, 2018 | BNA Daily Environment Report
By Perry Cooper
A class action alleging Champion premium dog food has excessive levels of toxic heavy metals may not have been filed in the right court, a federal court said Dec. 28. -
Energy Transfer Starts Up Delayed Appalachian Liquids Pipeline
Jan 1, 2019 | BNA Daily Environment Report
By Rachel Adams-Heard
Energy Transfer LP has started flowing initial volumes on its delayed Mariner East 2 pipeline, which will carry ethane and other natural gas liquids out of America’s biggest shale gas play. -
EPA Says Air Permit Policy Shift Not National Rule Subject to Judicial Review
Dec 31, 2018 | Inside EPA
By Stuart Parker
EPA is fighting environmentalists' claim that a landmark decision on a Utah coal-fired power plant's Clean Air Act permit represents a broader unlawful reversal of the agency's policy on issuing “Title V” permits, arguing in a new legal brief that the Utah permit decision... -
Ocasio-Cortez Slams Dems for Deeming Climate Goals 'Too Controversial'
Dec 31, 2018 | The Hill - E2 Wire
By Miranda Green and Owen Daugherty
Rep.-elect Alexandria Ocasio-Cortez is ripping her fellow Democrats for failing to take up her proposed special climate change committee called the Green New Deal because it was deemed "too controversial." -
Hope for a Green New Year
Jan 1, 2019 | New York Times
By Paul Krugman
Let’s be honest with ourselves: The new Democratic majority in the House won’t be able to enact new legislation. I’ll be astonished if there are bipartisan deals on anything important — even on infrastructure, where both sides claim to want action but what the G.O.P... -
2019 Outlook: Spotlight Moves to ‘Economies of Climate Change’
Jan 1, 2019 | BNA Daily Environment Report
By Bobby Magill
The next nine months will be homework time for countries, climate advocacy groups, and even oil companies as they prepare to respond to a United Nations call to bring concrete plans for deep greenhouse gas emission cuts to a September climate summit.
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(ACC Mentioned) Sippy Cups Market to Witness Robust Expansion of US$ 11,684.4 Mn by 2027
Jan 1, 2019 | Latest Market Reports
By Ankush Nikam
Sippy cups are likely to constitute an approximately US$ 8 billion global market in 2019, witnessing a moderate 4.4% growth over 2018. Delivering a wide selection of products in the baby care products category, the sippy cups market is slated for steady growth projections over coming years.
According to a recently released market research intelligence by Future Market Insights, the global market for sippy cups continues to witness dominance of Asian countries. Although considerably high infant population and an equally surging growth rate of the same attribute for APEJ’s leading position in the global sippy cups marketplace, Europe is also represented as an important regional market.
Ecommerce Penetration Plays a Crucial Role in Market Growth
“While APEJ and Europe seem to maintain their global dominance in sippy cups market owing to the presence of a strong base for a majority of leading manufacturers and relatively higher rate of infant population growth, it is the dramatically increasing Ecommerce penetration that is prominently boosting the growth of sippy cups market across urban areas of Asia and Europe,” explains a senior market research analyst at the company. Moreover, discussing the top selling product types segments in sippy cups market, the analyst says, “Soft spout sippy cups secure the top selling product position, whereas plastic remains a favored choice of material among manufacturers of sippy cups. Based on the age group of toddlers, sippy cups for 12-18 months are most attractive”.
When it comes to ranking the most popular distribution channel for sippy cups, the report highlights that supermarkets/hypermarkets continue to account for maximum sales of sippy cups. However, online sales are buckling-up and may demonstrate faster growth over conventional retail channels over the course of upcoming years. Almost 20% of the total baby products sale occurs online (as of H1 2018), which clearly reflects the signs of an amplified share in the near future. Munchkin Inc. has been dedicating heavy investment in online sales, with an additional promotional value through company blogs and informative articles on baby care products.
Customization and Innovation Trend Sippy Cups Market
§ Innovative, convenient, versatile, and durable sippy cups are currently shaping the revenue growth of sippy cups market.
§ The report anticipates safety and additional features to emerge as the most sought after parameters influencing purchasing decisions of consumer parents.
§ Customization of sippy cups is identified to be a growing trend that manufacturers are capitalizing on, in recent years.
§ Baby fashion has been a significant factor positively influecing product innovation and sales across the baby care category.
§ Another factor likely to hold long-term influence on sippy cups market revenue growth is the growing number of strategic mergers and acquisitions across juvenile durable goods category.
CollapseAndGo recently launched convenient on-the-go sippy cups – Collapsacup – targeting a broad range, from newborns to five years olds. These sippy cups, as are made from silicone, are bacteria-resistant, tasteless and odorless, and temperature-resistant.
Koninklijke Philips N.V., one of the major operators in the competitive landscape, is focusing on the diversification of an existing line of leak-proof, BPA-free sippy cups and bottles.
Experts Recommend Limited Use of Sippy Cups
A number of pediatricians altercate frequent use of sippy cups, as the overuse may eventually result in reliance on sippers, and an increased risk of cavities due to overexposure to sugars in the milk, juices, or formula inside. They also suggest that dependence of toddlers on sippy cups may lead to sabotaging meal times and delayed speech development.
The American Academy of Pediatric Dentistry even recommends the transition from sippy cups to normal cups as early as possible, after the age of one year. These and more such concerns related to increasing adoption of sippy cups are likely to hold a significant impact on the sales of sippy cups, says the report. It is ideally suggested that sippy cups should be allowed only for travel use, and ordinary cups or mugs should be brought in as better alternatives as early as possible.
BPA-free Sippy Cups Continue to Attract the Interest of Investors
BPA has been in use for plastic bottles and baby sippy cups over the past decades. However, the US FDA officially prohibited the use of BPA (bisphenol A) from baby bottles and sippy cups (post 2012) – post the revelations made by the American Chemistry Council that BPA tends to leach into food and beverage products, including water, milk, and infant formula – subsequently passing on the traces into the consumer’s body. Research says that BPA traces may later even pose adverse health effects predominantly on brain and behavior of toddlers and children.
This industrial chemical that mimics estrogen has thus been on the radar of sippy cups manufacturers and by now, the entire sippy cups market has travelled a paradigm shift to BPA-free sippy cups. As the consumer sector is witnessing a rapid influx of products labelled BPA-free, it is most likely that the focus of sippy cups and bottles manufacturers on the BPA-trend will zoom in over the coming years. Material innovation in the BPA-free segment is anticipated to remain a highly notable trend shaping the competitive landscape of sippy cups market, reports FMI.
However, although manufacturers of sippy cups and bottles have been taking into consideration the concerns over potentially hazardous health effects of BPA and thereby switching to an extensive range of similar-looking material alternatives, ongoing research continues to indicate that even ‘BPA-free’ may not be entirely safe, and have a certain set of health risks associated with it.
https://www.latestmarketreports.com/2019/01/01/sippy-cups-market-to-witness-robust-expansion-of-us-11684-4-mn-by-2027/
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Outlook ‘19: Caution Signals Flash for Chemical M&A Amid Downdraft
Jan 1, 2019 | ICIS
By Joseph Chang
Coming off a long stretch of strong chemical mergers and acquisitions (M&A) activity, the sector could cool off markedly in 2019, depending on the depth and length of the downturn in financial markets, which reflects expectations of slowing economic growth.
“There are negative and positive factors at work. There are concerns about whether there could be a global recession and the US credit markets have significantly tightened,” said Federico Mennella, head of Chemicals and Materials, North America for investment bank Rothschild & Co.
“China is up in the air because of US tariffs, there’s a general slowdown in Europe, and certain industrial sectors such as automotive are slowing,” he added.
The risks are grouped into three categories – political risks, trade tensions and general economic growth, all of which are intertwined, he noted.
“In general, leveraged finance markets weakened further in December with macro concerns and market volatility resulting in a broad-based sell-off in both the loan and bond markets. Investors are largely in risk-off mode for lower-rated new issues,” said Mennella.
“There are a number of uncertainties out there. Higher interest rates could slow down the US economy, Brexit is still not solved, and there is already a slowdown in China and Europe. Plus, the shift to electric mobility is causing changes in the automotive sector,” said Bernd Schneider, managing director at Germany-based investment bank Alantra.
“2019 probably won’t be a record year for chemical M&A when it comes to cumulated value, but it should still be a healthy year,” he added.
The pace of global chemical M&A activity has actually been declining for the last two years and should continue to fall in 2019, according to Peter Young, president of investment bank Young & Partners.
“Separate from one or two mega deals, the dollar volume and number of deals has been declining for the last two years and will continue to decline in 2019,” said Young.
“Although there are strategic buyers who want to add synergistic businesses, particularly in specialties, there are other forces that are pushing M&A volume in the other direction,” he added.
In terms of the number of deals over $25m in size, the first three quarters of 2018 saw 42 deals completed (56 deals on an annualised basis) compared to 89 deals for all of 2017, according to Young & Partners.
In terms of size, the first three quarters of 2018 saw $89.6bn worth of deals closed. However, just two deals dominated and represented $69.7bn of the total – the Bayer/Monsanto and PotashCorp/Agrium deals. All of the rest was only $19.9bn, noted Young.
“The industry faces many uncertainties that are impacting M&A. Slowing economies worldwide, difficulties in the very large Chinese economy, higher interest rates, the slumping stock market, the unknown trajectory of the US/China trade disputes and tariffs, and the high levels of geopolitical strife are all factors that will drive a slower M&A market and potentially, a severe downturn in activity and valuations,” said Young.
“There is still a window to sell at solid valuations for certain assets, but that window will not stay open for all of 2019,” he added.
EQUITY MARKETS TUMBLE
Chemical equity prices have tumbled since early October along with the broader markets, denting public valuations as well as management confidence. Stock prices are considered a leading indicator. The stock market looks forward, and it doesn’t like what it sees.
“The level of volatility is not instilling confidence in the M&A market. That being said, we are not aware of any [sale] processes that have been pulled,” said Leland Harrs, managing director at investment bank Houlihan Lokey.
“It is serving as a wake-up call that we are in the late innings of the economic cycle, and that it might be a good time to sell,” he added.
Interestingly, earnings estimates for 2019 have not yet been slashed to the extent stock prices would suggest. Consensus estimates as of mid-December show chemical company profits largely rising in 2019 versus 2018.
“Equity volatility could cause some pause for those looking for deals, but M&A is a long-term investment and companies take a long-term view,” said Sean Gallagher, managing director at investment bank Janney Montgomery Scott.
“Most companies look at long-term trends and see if the support is there – sales synergies, cost synergies, and the need to add to the team to achieve higher growth, especially with tightness in the labour market. In the end, the deals that make sense will still get done,” he added.
US-focused chemical companies in particular have more cash available from the tax reform to make acquisitions, said the banker.
“And the range of financing sources keep on increasing, branching out from traditional banks. There are PE funds focused on debt that are looking to put capital to work, and BDCs (business development companies) can now take on more leverage,” said Gallagher.
With the March 2018 “Omnibus” bill that was passed to avert a US government shutdown, one provision allowed for BDCs to borrow more money to lend out. Specifically, BDCs can borrow $2 for every $1 in equity versus a 1:1 ratio previously.
PUBLIC COMPANIES IN PLAY
The carnage in equity prices could make publicly traded companies more attractive, putting them “on the radar screen” for potential acquisitions, said Telly Zachariades, co-founder and managing director of investment bank The Valence Group.
“Stocks had gotten ahead of themselves and thus there were less buyouts of public chemical companies. The field has now returned to normality,” he added.
However, buyers won’t necessarily be able to offer takeout premiums for stock prices going back to October 2018 highs and expect to find a willing seller just yet, warns the banker.
“You need stock prices to stay down longer – to have 3-6 months of ‘seasoning’. If stock prices stay where they are or fall lower, then public companies will be in play,” said Zachariades.
Lower stock prices could also spur divestitures.
“When equity markets soften a bit, corporates are more willing to pursue smaller, non-core divestitures because they are less dilutive to earnings per share,” said Chris Cerimele, founder and managing director of investment bank Balmoral Advisors.
“Many companies have been on the sidelines because their public trading multiples have been so strong,” he added.
With a high public trading EV/EBITDA multiple, management would be hesitant to divest earnings generating assets, as they are getting a higher valuation on the consolidation of those profits than if they sold them.
CEO CONFIDENCE IS KEY
And what about public chemical companies as buyers? Managements seeing their own stock prices decline precipitously would arguably hesitate paying high multiples for deals.
However, Zachariades noted that deal multiples have typically been higher than public valuations.
Recent deal valuations have indeed been solid, highlighting the demand for good assets of size.
Germany-based Evonik’s planned acquisition of US-based hydrogen peroxide and peracetic acid producer PeroxyChem from One Equity Partners announced in November for $625m was at a multiple of 10.4x expected 2018 EBITDA of around $60m and over 2x expected sales of $300m.
Zachariades pointed to US-based Ingevity, which despite a recent decline in its stock price, announced on 10 December the acquisition of Perstorp’s caprolactone business for €590m, representing a robust 11.8x expected 2018 EBITDA of €50m.
“It all comes down to whether the CEO is confident in prospects for his own company. It’s not about what the market is valuing it at, but what the outlook is for 2019,” said Zachariades.
“If CEOs start to get nervous, then that will have an impact on how they approach M&A,” he added.
Using capital expenditures (capex) as a proxy for business confidence, the banker points out that around 75-80% of chemical companies reporting capex plans for 2019 have them at similar levels as 2018 or higher.
Yet a consistently declining stock price can impact management confidence.
From a public company perspective, it’s a lot easier for boards to approve deals when their stock price is up. It’s a matter of confidence,” said Omar Diaz, managing director at investment bank Seaport Global Securities.
In general, chemical companies’ “balance sheets are fantastic as they have not borrowed like drunken sailors, and they are generating strong cash flows. Portfolio realignment is still the name of the game”, he added.
Yet “volatility is not the friend of M&A”, said Diaz. “China is a wild card. All this uncertainty on the US-China trade front is putting a damper on sentiment, along with worries about a slowing global economy.”
CREDIT TRENDS WEAKENING
While leading indicators are “flashing warning signs” and the market seem to be “on edge”, “as long as credit is available on acceptable terms, and trade and oil aren’t disruptive, US chemical M&A should continue at a good pace,” said Rothschild & Co’s Mennella.
“The availability and pricing of credit have a more direct tie to M&A. We’ve seen some widening of credit spreads and choppiness but it’s too early to say if it will impact activity. Everyone’s antennas are up,” said Houlihan Lokey’s Harrs.
“The debt capital markets are becoming an increasing concern. It’s gotten harder to borrow as institutional investors are looking for higher Libor floors and overall pricing. This may also put a damper on activity in 2019 and beyond,” said Seaport Global’s Diaz.
“The first quarter of 2019 may be on the slow side, but if there’s any indication that volatility may lessen, M&A market growth should accelerate from there. We’re cautiously optimistic for 2019,” he added.
BUYER DYNAMICS
“Buyers might use this as an opportunity to slow things down or lower their price if this volatility persists. However, if you do nothing, you are losing that growth lever. Most chemical companies are still longing to do M&A,” he added.
“There is still more demand than supply of assets for sale. If there’s a downturn, deal multiples may soften. But for now, multiples are still strong and still drawing sellers out,” said Cerimele from Balmoral Advisors.
“The chemical M&A market is still strong. Everyone’s looking at it and wondering how long it can last. How many times does the coin flip come up heads? That’s the mentality today,” he added.
On the positive side, profitability, as measured by earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to continue improving in 2019 for specialty chemical companies, said Mennella from Rothschild & Co.
“While we see certain commodity chemical companies weakening, many specialty chemical margins are expanding on lower commodity prices,” said Mennella.
Profit margins are often a driving force for corporate acquisition interest, noted Cerimele from Balmoral.
“Corporate buyers are often more focused on gross margin improvement (accretion) with acquisitions rather than the dollar size of earnings. If a deal is likely to result in profit margin accretion of the combined business, it will get more attention,” said Cerimele.
However, the US-China trade war could become problematic for M&A if it escalates, causing havoc across global economies and financial markets.
“A key factor is valuations. If you cannot properly value a business because of all the uncertainty, you’re going to be at a disadvantage in terms of M&A,” said Mennella from Rothschild.
And for crossborder M&A between the US and China, the trade war is already taking its toll.
“In the past year and a half, there’s been a significant slowdown in Chinese companies seeking to acquire US assets. The Chinese government has also cracked down on outflows of capital,” said Harrs from Houlihan Lokey.
PRIVATE EQUITY OUTLOOK
Private equity (PE) firms continue to express high interest in the chemical sector, and have been active on both the buy and sell side.
Through November 2018, PE firms were involved on the buy or sell side in 38.9% of total chemical transactions announced in the year, up from 25.7% for all of 2017, according to Rothschild & Co.
On the buy side, PE firms and strategics continued to pay full prices for chemical assets.
Sponsor deal multiples rose to 10.4x earnings before interest, tax, depreciation and amortization (EBITDA) year-to-date through November 2018, compared to 13.6x for strategic deals. Those figures were up from 10.0x for sponsor deals and 10.4x for strategic deals in 2017, according to Edgewater Capital Partners.
“Credit markets are currently supportive of defensive industries and credits with reasonable leverage and terms. Risk has been repriced higher - so sponsors are still getting deals done, but in more expensive and conservative terms. More private equity groups are getting involved in chemicals while valuations are not crazy,” said Mennella.
Rothschild & Co together with Mennella, then at his previous firm Lincoln International, advised Bain Capital on its acquisition of specialty chemical additives producer Italmatch from PE firm Ardian in July 2018.
Italmatch reportedly generated around €400m in sales in 2017. Then in December 2018, Bain Capital and Italmatch, again advised by Mennella, announced the acquisition of US-based BWA Water Additives.
“There’s been a flood of PE firms with interest in the chemicals market with huge amounts of raised capital,” said Alantra’s Schneider.
“And now we see more former bankers joining PE firms. The competition between PE firms is so fierce that they must ramp up every asset they have to win deals, and that includes bringing in expertise to differentiate themselves,” he added.
Mario Toukan, former managing director and head of chemicals at KeyBanc Capital Markets, joined SK Capital Partners as a managing director in December 2018. Earlier in 2017, SK Capital brought on Simon Dowker, formerly an investment banker focused on chemicals with PJT Partners and Jefferies.
Expect PE firms to be opportunistic in 2019, especially if corporates step back from M&A.
“In 2018, deals involving private equity have moved at an extremely accelerated pace. PE firms have massive amounts of capital, and speed in closing a transaction is their primary differentiator,” said Diaz.
FAILED MERGERS, ACTIVISTS
Even failed mergers can lead to M&A activity as the companies take their next steps, noted Mennella.
Switzerland-based Clariant, after its planned merger with US-based Huntsman was scuttled by activist investor White Tail, gained Saudi Arabia’s SABIC as a partner through the activist’s sale of its nearly 25% stake in Clariant to SABIC.
While this was a not a change-in-control acquisition, it brought in new management. The new Clariant CEO Ernesto Occhiello had been heading up SABIC’s specialty chemicals business.
Netherlands-based AkzoNobel, which had to deal with activist investor Elliott Management along with a hostile takeover bid by US-based coatings rival PPG, in October 2018 sold off its specialty chemicals business to PE firm The Carlyle Group and Singapore sovereign investment fund GIC for €10.1bn.
“Failed mergers and activists can either drive direct M&A, or indirect M&A as they raise the flag and essentially clamor for another investor to come in,” said Mennella.
“Once management is exposed, they usually decide to do something,” he added.
Elliott Management also targeted US-based coatings company RPM International, which in June 2018 agreed to appoint two new independent directors to the board and form an “Operating Improvement Committee” to conduct a comprehensive business review.
“Activism typically results in divestitures as the targeted companies refocus their efforts,” said Harrs from Houlihan Lokey.
New CEOs can also often lead to M&A activity, as they seek to make their mark on the company through acquisitions, divestitures or a combination of both.
Chemical companies or those with chemical operations with relatively new CEOs include Clariant, Nouryon (former AkzoNobel Specialties) and Milliken & Co. Coming up in 2019, Solvay will have a new CEO. Plus, the DowDuPont spinoffs Dow, DuPont and Corteva set for 2019 will all have their own new CEOs.
AGE OF MEGA DEALS OVER
The age of the chemical mega deal is likely over, at least for 2019, as it is getting harder to find the strategic rationale for these kinds of transactions. Yet one potential big deal we could see in the New Year is LyondellBasell/Braskem.
“Any planned mega deal might take longer than expected because of all the uncertainty,” said Schneider from Alantra.
“The period of mega deals could take a pause, but we could see even more mid-size and smaller deals as new companies like Nouryon seek to grow certain divisions and also dispose of assets to deleverage. The companies spun off from DowDuPont should also see consequential deals,” he added.
COMPOSITES MEGATREND
Certain subsectors will be in high demand. Compounding and even more composites are up there on the attractiveness scale.
“Composites in the age of lightweighting and electric mobility are the name of the game. It’s a hot industry and good assets are commanding high multiples,” said Schneider.
“With increasing environmental awareness and potential decrease in the consumption of basic plastics – for example in packaging - resins makers are afraid of losing demand. They are taking the necessary steps downstream,” he added.
Companies such as LyondellBasell, Covestro, Celanese and Ascend Performance Materials have been acquiring such compounding/composite assets to gain access to new applications and improve their long-term margins.
US-based integrated nylon producer Ascend Performance Materials in August 2018 acquired Netherlands-based engineering plastics compounder and customer Britannia Techno Polymers (BTP) – it’s first such acquisition. It is seeking additional acquisitions to broaden its compounding footprint.
The “hunger for composites” stems from companies’ need to find new applications where resins will replace metals, to compensate for a potential loss in classical uses such as packaging, and to achieve better margins and pricing power, noted Schneider.
“Resins companies have to get out of that strategic trap and composites is the answer,” he added.
Along the electric mobility mega trend, there is renewed interest in electronic chemicals, including electronic coatings and battery materials, said Schneider.
While the overall automotive sector faces challenges of slowing growth, certain subsectors continue to show strength.
“Even within automotive, it depends on what you’re supplying. Commodity materials will see a slowdown. But if you produce higher-end materials for lightweighting – certain plastics, adhesives and sound insulation – you may not have witnessed any slowdown at all,” said The Valence Group’s Zachariades.
https://www.icis.com/explore/resources/news/2018/12/31/10300259/outlook-19-caution-signals-flash-for-chemical-ma-amid-downdraft/
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EPA Is Shut Down, But Courthouse Doors Still Open
Dec 31, 2018 | BNA Daily Environment Report
By David Schultz
Federal courts are open even though the EPA’s doors are closed, but judges are already putting the brakes on a raft of cases as the government shutdown drags on.
The Environmental Protection Agency was able to stay in business an extra week thanks to unspent funds, but now a prolonged shutdown would run up against a host of pending deadlines for the agency to act.
The agency has numerous court-ordered deadlines looming in the coming weeks, and it’s unclear how much patience the judges who set them will have. A lengthy shutdown could also trip up the EPA’s ability to meet tight new deadlines under the updated toxic substances law.
“The big question right now is we don’t know the duration of this shutdown,” Thomas A. Lorenzen, a partner with Crowell & Moring LLP’s Washington office who previously defended EPA regulations at the Justice Department, told Bloomberg Environment.
The partial government shutdown began Dec. 22 after Congress failed to reach an agreement with President Donald Trump to extend funding for numerous agencies, including the EPA and the Department of the Interior. Trump said he is unwilling to sign any spending bill that doesn’t include money for a wall along the U.S.-Mexico border.
First Stop: Supreme CourtThe first deadline will be before the nation’s top court. The agency will likely have to help the solicitor general file a brief by Jan. 4 to the U.S. Supreme Court in a potentially landmark case over how to regulate groundwater pollution.
So far, neither the EPA nor the solicitor general’s office, which is also shut down, have asked the court for an extension.
If the budget impasse continues, it could run up against a Jan. 28 deadline for the EPA to file briefs with the Supreme Court defending its authority to regulate the water pollution impacts of construction projects.
Courts Hit PauseMost judges, however, acknowledge the reality of the government shutdown, according to Bruce Buckheit, a former litigator at the Justice Department and EPA who has lived through prior government shutdowns. He said the EPA tends to get a fair amount of lenience in these types of situations from most judges—though not all.
“It’s pretty rare that you get [a judge] who flips out and hates everyone,” Buckheit told Bloomberg Environment. But “the judicial system on the whole is pretty sensible for deadlines.”
In some of the pending lawsuits against the EPA, judges have already agreed to put cases on ice until normal government functions resume. The U.S. District Court for the Northern District of California has temporarily delayed all activity in a case asking the agency to ban fluoride in drinking water.
“Defendants shall inform the Court when Congress has appropriated funds. At that point, all deadlines for the parties shall be extended commensurate with the duration of the lapse in appropriations,” Judge Edward M. Chen ordered Dec. 29.
The same thing happened in a lawsuit over an accidental spill the agency caused in 2015 at Colorado’s Gold King Mine.
Additionally, the shutdown is depriving the EPA and Justice Department of valuable preparation time for upcoming oral arguments. There are two arguments on the EPA’s calendar before federal appeals courts that are coming up in late January and early February.
Buckheit said, even if the shutdown is resolved before then, the appeals courts will probably agree to postpone the arguments if the Justice Department’s attorneys say they weren’t able to properly prepare.
Tight Chemicals Deadlines Get TighterThe shutdown also will impede the EPA’s efforts to meet already tight deadlines under the 2016 amendments to the Toxic Substances Control Act.
The EPA was expected to begin releasing in late December or early January the names of at least 40 chemicals to evaluate. The law requires the agency to sort through all 40 in 2019 and decide by March 31, 2019, at the latest which 20 will be teed up for close scrutiny—possibly leading to regulatory controls—and which 20 can be set aside for now.
Chemical, industrial equipment, paper, toy, tire, and many other manufacturers have asked the agency to let them know as soon as possible which chemicals are on that list. They’d like as much time as possible to provide the EPA data that could tip its conclusion toward deciding the compound they need doesn’t need a spotlight.
The EPA also was expected to release by the end of December more draft risk assessments for the 10 chemicals such as asbestos it is closely reviewing.
Delaying release of these risk assessments doesn’t mean the agency gets any more time to finish them. The toxics law directs the agency to get finished ones out the door by Dec. 22, 2019. While the law allows an extension until June 22, 2020, the statute requires the agency to be working on so many tasks in early 2020 that the agency says it plans to meet the 2019 deadline.
—With assistance from Amena H. Saiyid, Sylvia Carignan, and Pat Rizzuto.
https://news.bloombergenvironment.com/environment-and-energy/epa-is-shut-down-but-courthouse-doors-still-open
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States Take Steps to Adopt Stricter PFAS Levels Than EPA Advisories
Dec 31, 2018 | Inside EPA
By Suzanne Yohannan
Expert panels in Michigan and New York -- two states that are grappling with contamination from per- and polyfluoroalkyl substances (PFAS) -- say that EPA's health advisory levels for the contaminants in drinking water are not adequately protective, opening the door for regulators to adopt stricter standards than EPA's.
The New York State Drinking Water Quality Council Dec. 18 recommended that the state's Health Department adopt enforceable drinking water standards, known as maximum contaminant levels (MCLs), of 10 parts per trillion (ppt) for perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS), two of the most commonly found PFAS.
Should the state set such a standard, it would mark the strictest limit yet for a chemical in the class.
At the same time, a scientific advisory panel convened by Michigan regulators suggested in a Dec. 7 report that the EPA advisory levels of 70 ppt may not be protective enough for at least one of the chemicals, though it stopped short of explicitly recommending the state adopt stricter limits.
The recommendations from the panels signal states' growing agreement that EPA's non-enforceable health advisory levels for PFAS in drinking water, which the agency set in 2016, fail to go far enough.
While some states, like Michigan, have adopted EPA's recommended advisory level of 70 ppt for combined PFOA and PFOS, others such as New Jersey and Vermont have moved towards adopting much stricter levels. New Jersey, for example, in September adopted a drinking water standard of 13 ppt for perfluorononanoic acid (PFNA) and is slated to adopt standards as low as 13 ppt for PFOS and 14 ppt for PFOA.
But now even states like Michigan appear to be moving to adopt stricter limits.
Their efforts come after the federal Agency for Toxic Substances and Disease Registry (ATSDR) has also said that EPA's limits are not stringent enough, releasing draft risk values earlier this year that are seven and 10 times more conservative than equivalent values EPA used when setting its drinking water advisory levels for PFOA and PFOS, respectively.
ATSDR's draft report came in the face of significant criticism from lawmakers and environmentalists after Inside EPAand other news outlets reported that EPA and other Trump administration officials had urged the White House to block the document's release because it suggested more conservative values for PFOA and PFOS than EPA used when setting its advisory levels for the two.
PFAS are a class of chemicals that are toxic, persistent, and bioaccumulative and have prompted growing concern around the country due to their presence in drinking water systems and links to adverse health impacts at low levels.
The chemicals have been used widely in non-stick applications such as clothing, cookware and firefighting foam.
The presence of PFAS in drinking water has prompted broad concerns in states from Michigan to New Jersey and across the Northeast, with many federal lawmakers, environmentalists and others urging EPA to set one or more MCLs to address the chemicals.
New York is among a growing number of states beginning to develop safety levels for drinking water.
While EPA is only slated to release a long-awaited PFAS management plan in early 2019, the agency has signaled it is hesitant to commit to crafting an MCL for one or more PFAS given scientific and other uncertainties, as well as the lengthy process involved in crafting an MCL.
Most Protective Levels
As EPA grapples with its plan, New York and Michigan are eyeing the adoption of stricter limits.
“I commend my colleagues on the council for their essential leadership on this issue, particularly in light of the continued lack of leadership at the federal level,” New York State Department of Environmental Conservation Commissioner Basil Seggos said in a Dec. 18 press release from the Department of Health (NYSDOH).
Seggos, who is a member of the council, noted that, if adopted, the levels, along with a recommended MCL of 1 part per billion for the non-PFAS chemical 1,4-dioxane, would be the most protective drinking water levels in the country for the three chemicals.
In its plan, the Empire State's drinking water council urged NYSDOH to adopt MCLs at 10 ppt each for PFOA and PFOS, according to the NYSDOH press release, which also notes that these levels take into consideration the national adult population's existing “body burden” of these chemicals.
It will be up to the New York Commissioner of Health to accept the call for MCLs or propose alternative levels, the release says. Following that determination, the public will be given 60 days to comment. Then, the draft regulation will either be revised or submitted for adoption by the Public Health and Health Planning Council, subject to the health commissioner's approval, it says. If the MCLs are adopted, public water systems would be required to test for the chemicals and meet the standards, it says.
Meanwhile, in Michigan, a national panel of experts convened to advise Michigan on the general health risks related to PFAS in the environment and offer “evidence-based recommendations” to the state, the Michigan panel report says.
The state in late 2017 convened a multi-agency action team on PFAS in order to develop a comprehensive and timely response to mitigating the class of emerging contaminants in the state, the report says. The multi-agency team has so far worked on addressing 34 sites involving PFAS groundwater and surface water contamination in the state, it says. And the team announced earlier in 2018 that it was undertaking a state-wide study to test PFAS levels in the state's 1,380 public water systems and to test schools operating their own water supplies. In addition, state regulators are testing groundwater, lakes and streams, soils and sediment, wastewater and PFAS foam accumulating on lakes and rivers, the team's website says.
A Michigan environment official has said the state last January adopted EPA's 70 ppt health advisory level as a starting point, using it as a combined standard of 70 ppt for PFOA and PFOS for groundwater remediation.
But now advisers are suggesting that level is not sufficiently safe -- a message that environmentalists have long delivered.
In the new report, Michigan's scientific advisers note that consuming 70 ppt PFOA in drinking water over several years would likely result in an average blood serum PFOA concentration of about 10 nanograms per milliliter (ng/ml) in adults and 16.5 ng/ml among individuals with higher rates of water consumption.
Further, it says these serum levels are higher than the average range of PFOA values in a representative sample of the U.S. population in National Health and Nutrition Examination studies, and are within the second or third quartile of exposure categories in several epidemiological studies of highly exposed populations. Greater rates of ulcerative colitis, some cancers and other health effects have been identified for these exposure categories, it adds.
“Therefore, if one accepts the probable links between PFOA exposure and adverse health effects detected in the epidemiological literature as critical effects for health risk assessment, then 70 ppt in drinking water might not be sufficiently protective for PFOA, and possibly by extrapolation to PFOS,” it says.
It adds, “Based on the available evidence for PFOA, in particular, the combined evidence from toxicology and epidemiology the Panel concludes that the research supports the potential for health effects resulting from long-term exposure to drinking water with concentrations below 70 ppt.”
Adverse Immunologic Effects
The panel also says it agrees with certain findings in ATSDR's May guidance document for clinicians responding to exposure concerns. Specifically, it says it concurs with ATSDR's assessment “with regard to associations of PFAS exposure to alterations of thyroid function, high cholesterol, ulcerative colitis, testicular cancer, kidney cancer, pregnancy-induced hypertension, and elevated liver enzymes” but differs on some other specific areas of concern, such as that an elevated serum uric acid is a consequence of elevated blood levels of PFAS.
In addition, the Michigan panel says it “would add immunologic effects to the list of health condition[s] of concern, particularly those that arise during prenatal exposure and childhood, and reduced birthweight should also be added, based on strong toxicologic findings and supporting epidemiologic evidence.”
The authors of the report conclude that, “Although the evidence is still evolving and weak in some important areas, there is sufficient evidence from the toxicologic and epidemiologic findings to justify regulatory efforts to manage exposure for protecting human health.”
Among its many recommendations, the panel suggests the state take one of three options for developing drinking water standards. These are to either adopt one of the advisory levels created by various agencies “based on toxicological outcome exclusively,” take a more novel path and develop an advisory level that solely relies on epidemiological findings, “or, preferably” develop “a new set of values based on weight of evidence and convergence of toxicological and epidemiological data.”
An environmentalist with expertise on PFAS says the most significant take-away from the report is the authors' “acknowledgement of the importance of using the available human epidemiological evidence in setting a safe exposure level of health advisory limit.”
The source says EPA in its development of the health advisory “noted but did not explicitly utilize the human evidence of impacts.” The source adds that when these studies are used to set a level or standard, that results in a stricter limit, noting examples of New Jersey's proposed MCLs of 13 and 14 ppt for PFOS and PFOA, respectively; and ATSDR's draft toxicological profile for PFAS, among others.
The Michigan panel's advice to weigh human evidence signals it is suggesting that the state develop a stricter level than EPA's health advisory limit, the source adds.
The report also calls for the state to “consider setting advisory limits” for other PFAS, in addition to PFOA and PFOS, “in light of their similar chemical structures and toxicity.”
It also cites the problem presented by companies' proprietary holds on products and goods containing PFAS, noting the financial burden of reverse engineering such products. “The result is an incomplete patchwork of understanding of the type, number, and potential effects of PFAS now circulating in the marketplace, the environment, and in humans.”
While some states have restricted the use of certain chemical classes, “Michigan could consider adopting policies put in place by other states but should consider monitoring for such chemicals independent of the restrictions,” the report recommends.
https://insideepa.com/daily-news/states-take-steps-adopt-stricter-pfas-levels-epa-advisories
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New Hampshire Readies New Water Limits for Nonstick Chemicals
Dec 31, 2018 | BNA Daily Environment Report
By Adrianne Appel
New Hampshire will propose Jan. 1 new limits for contaminants in groundwater and drinking water that are expected to be tougher for industry to meet.
The draft standards, for perfluorooctanoic acid (PFOA), and three related per- and polyfluoroalkyl substances (PFAS), will aim to be protective of human health and at the same time consider treatment costs and benefits, according to the New Hampshire Department of Environmental Services.
After a public comment period, the department aims to have a final standard in place by summer 2019, Sarah Pillsbury, administrator of the department’s Drinking Water and Groundwater Bureau, told Bloomberg Environment Dec. 31.
Wells ContaminatedThe PFAS family of chemicals is used in the manufacturing of paint, waxes, firefighting chemicals, and nonstick coatings. The Environmental Protection Agency has linked them to birth defects, liver damage, thyroid malfunction, some cancers, and immune system problems at sufficient levels of exposure.
Several of the chemicals were phased out around 2015 but persist in the environment. In 2016 the chemicals were found in the private drinking water wells of more than 500 families in New Hampshire. About 200 wells in nearby Vermont were also contaminated.
The states traced the chemicals to a former ChemFab Corp. plant in Bennington, Vt., now owned by Saint-Gobain Performance Plastics.
“We advocate for decisions based on sound science,” Dina Pokedoff, Saint Gobain spokeswoman, told Bloomberg Environment Dec. 31.
“As a member of the community, we made it a top priority to take a leadership role in bringing potable water to the residents surrounding our plant,” Pokedoff said.
The discovery of the chemicals in water caused great public concern and led to legislation, signed in April by Gov. Chris Sununu (R), calling for the New Hampshire Department of Environmental Services to review and update the current standard it uses for PFOA and related chemicals in groundwater, drinking water, and when used to clean up contamination.
Under the legislation, companies that emit pollutants would need to pay to obtain permits from the state. Fees from the permits would support the new regulation.
Uses EPA StandardNew Hampshire currently doesn’t have its own standard for PFOA in drinking water and groundwater. Like many other states, it uses the EPA’s recommendation of 70 parts per trillion of PFOA, which has been criticized by some federal scientists as too low.
Nearby Vermont recently set a standard of 20 parts per trillion for PFOA in drinking water.
The new limits would set maximum contaminant levels for the chemicals PFOA, PFOS, PFNA and PFHxS. The department reviewed health and other studies of the chemicals and hired a toxicologist to assist in setting the standards, according to the department.
Testing UnderwayAfter 2016, the department also launched a broad program of testing all areas in the state suspected of possible, historic PFAS contamination.
All public water supplies are now regularly checked for the chemicals but many residents rely on private wells for their drinking water, so state officials want to make sure any suspect groundwater that supplies wells is clean, they have said.
The department has tested more than 2,000 private wells and sampled hundreds of waste sites. A total of 850 homes have so far been provided with alternative water or a treatment system, according to the state’s environmental department.
https://news.bloombergenvironment.com/environment-and-energy/new-hampshire-readies-new-water-limits-for-nonstick-chemicals
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Toxic Dog Food Class Action Stumbles on Jurisdiction
Dec 31, 2018 | BNA Daily Environment Report
By Perry Cooper
A class action alleging Champion premium dog food has excessive levels of toxic heavy metals may not have been filed in the right court, a federal court said Dec. 28.
The defendants and the conduct alleged aren’t sufficiently connected to Tennessee to justify the court’s jurisdiction over the case, Judge Eli Richardson wrote for the U.S. District Court for the Middle District of Tennessee.
The court gave the plaintiff until Jan. 14 to amend his complaint to explain why it has jurisdiction.
Matthew D. Ficarelli sued Champion Petfoods USA Inc. and Champion Petfoods LP alleging its premium Orijen and Acana dog food brands are contaminated with excessive quantities of heavy metals that are toxic to dogs.
Ficarelli says he paid too much for the food, which he bought because of Champion’s deceptive advertisements.
The court granted Champion’s motion to dismiss for lack of jurisdiction.
The court lacks general personal jurisdiction over the defendants because neither is incorporated or principally does business in Tennessee, the court said.
The court also lacks specific jurisdiction, it held. Ficarelli didn’t say he bought the dog food in Tennessee, but rather in Florida where he lived previously.
“This is a critical flaw in the complaint because it is plaintiff’s purchase of the products that gives rise to this lawsuit,” the court said. “Although the court must construe the complaint in the light most favorable to plaintiff, the court cannot reasonably infer that plaintiff purchased the dog food in Tennessee.”
Barnow and Associates P.C. and Sanford Heisler Sharp LLP represented the pet owners.
Greenberg Traurig LLP and Patterson Intellectual Property Law P.C. represented Champion.
The case is Ficarelli v. Champion Petfoods USA, Inc., 2018 BL 481971, M.D. Tenn., No. 3:18-cv-361, 12/28/18.
https://news.bloombergenvironment.com/environment-and-energy/toxic-dog-food-class-action-stumbles-on-jurisdiction
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Energy Transfer Starts Up Delayed Appalachian Liquids Pipeline
Jan 1, 2019 | BNA Daily Environment Report
By Rachel Adams-Heard
Energy Transfer LP has started flowing initial volumes on its delayed Mariner East 2 pipeline, which will carry ethane and other natural gas liquids out of America’s biggest shale gas play.
The conduit went into service effective Dec. 29, the company said in a statement. Mariner East 2, which expands the already-operational Mariner East 1 to move more natural gas liquids out of the Marcellus shale play, was originally supposed to enter service in the third quarter but was delayed until the fourth quarter after a series of regulatory holdups.
Pennsylvania regulators in late May shut down all work on the project after an administrative law judge sided with a Democratic state senator’s complaint that the project posed a safety threat. Energy Transfer was later cleared to restart construction, but work remains halted at two sites in Pennsylvania’s West Whiteland Township. The company is using an existing products line it converted to help it meet customer obligations.
Energy Transfer has faced delays with other pipeline projects. The Bayou Bridge crude oil pipeline in Louisiana was supposed to enter service by the end of 2018 but is now slated to come online in mid-January.
https://news.bloombergenvironment.com/environment-and-energy/energy-transfer-starts-up-delayed-appalachian-liquids-pipeline
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EPA Says Air Permit Policy Shift Not National Rule Subject to Judicial Review
Dec 31, 2018 | Inside EPA
By Stuart Parker
EPA is fighting environmentalists' claim that a landmark decision on a Utah coal-fired power plant's Clean Air Act permit represents a broader unlawful reversal of the agency's policy on issuing “Title V” permits, arguing in a new legal brief that the Utah permit decision is not a “nationally applicable” rulemaking eligible for judicial review.
In the brief, filed Dec. 21 with the U.S. Court of Appeals for the District of Columbia Circuit, EPA says its decision on the preconstruction permit for Pacificorp's Hunter Power Plant in Utah applies only to that facility, and therefore applies only “locally or regionally” rather than nationally. The agency argues the correct venue for the suit is in the 10th Circuit that includes Utah, where environmentalists have a parallel case over the permit pending.
Environmentalists are challenging the permit and EPA's decision to reject their petition asking them to deny issuance of the permit. They claim the decision unlawfully reverses national air permitting policy by excluding consideration of underlying permit conditions in assessing the merits of Title V air permits.
But EPA argues the decision on Hunter was case-specific, saying “[t]he fact that EPA interpreted its regulations and the Act differently in this adjudication than in certain prior adjudications, and explained the reasons for its revised interpretation as a basis for denying Sierra Club’s petition on the Hunter permit, does not make EPA’s action nationally applicable. Nothing in EPA’s Order or explanation imposes legal obligations in future proceedings on States, sources, or on EPA itself,” the brief says, referring to the agency's order rejecting the petition.
In addition, when then-EPA Administrator Scott Pruitt made the Oct. 16, 2017, decision to uphold the permit he did not find it was a policy shift of “nationwide scope or effect” subject to D.C. Circuit review, the brief says. That court typically hears challenges to agency regulations that have national implications, whereas EPA is arguing that a single permit decision affecting one plant in Utah cannot have such an effect.
Even if the D.C. Circuit agrees with environmentalists that the permit decision does represent an agency policy shift with national impact, the agency says its decision should be upheld. In the event that “the Court reviews the Hunter Order, Sierra Club’s procedural challenge should be rejected. EPA’s explanation of its interpretation in the Hunter Order is not a legislative rule requiring notice-and-comment procedures.”
EPA says environmentalists should have pursued action against permitting decisions they disagreed with in state court. “Protection against incorrectly issued preconstruction permits is provided by Utah’s notice-and-comment process and the availability of judicial review in State court of Utah’s preconstruction permit decision.”
Permit Decision
The agency's decision changed its approach for reviewing petitions for objection to Title V permits, restricting the grounds for granting a petition to exclude the content of underlying air permits, or decisions over whether such underlying permits are required in the first place.
Title V permits are “umbrella” permits containing all permit terms applicable to a pollution source, including underlying permits such as “nonattainment” new source review (NSR) permits or the similar prevention of significant deterioration (PSD) permits. Nonattainment NSR permits are required for new or modified major air pollution sources in areas violating national ambient air quality standards, while PSD applies in attainment areas.
Sierra Club’s 2016 petition sought an objection to the 2016 Title V permit because the group claims the state originally issued the plant a “minor source” air permit rather than the required major source PSD permit that would have mandated extensive review and possibly tougher pollution controls. The underlying PSD permit decision dates to 1997.
EPA’s refusal to consider whether the appropriate PSD permit is included in the Title V document constitutes a shift from Obama-era practice, when the agency did sometimes consider such issues.
But the agency in its brief says that Title V permit petitions cannot “serve as a vehicle for a collateral challenge to reevaluate and second-guess the substance of Utah’s” original PSD permit decision.
“EPA lawfully and reasonably declined to reexamine the substance of each incorporated preconstruction permit or other applicable requirements included in Hunter’s Title V permit renewal, except to ensure as the Act specifically requires that the permit included adequate monitoring, recordkeeping and reporting,” the agency says. Although this approach marks a departure from prior agency practice, “it represents a return to EPA’s original view of how Title V works,” consistent with the Clean Air Act and EPA regulations, the brief says.
https://insideepa.com/daily-news/epa-says-air-permit-policy-shift-not-national-rule-subject-judicial-review
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Ocasio-Cortez Slams Dems for Deeming Climate Goals 'Too Controversial'
Dec 31, 2018 | The Hill - E2 Wire
By Miranda Green and Owen Daugherty
Rep.-elect Alexandria Ocasio-Cortez is ripping her fellow Democrats for failing to take up her proposed special climate change committee called the Green New Deal because it was deemed "too controversial."
Ocasio-Cortez in a Twitter thread Monday blamed House leadership for rejecting the idea behind the Green New Deal, which aimed to create a plan to get the country on a 100 percent renewable energy electric grid.
"A few weeks ago, I joined youth activists in a specific demand for a Green New Deal Committee. It had 3 simple elements: 1. No fossil fuel money on climate cmte 2. Offer solutions for impacted communities 3. Draft sample #GreenNewDeal All 3 were rejected as “too controversial," she tweeted.
Ocasio-Cortez did not respond to tweets asking her to name the person who labeled the committee controversial.ADVERTISEMENT
Future House Speaker Nancy Pelosi (D-Calif.) announced Monday that Rep. Kathy Castor (D-Fla.) will chair a different special committee on climate change they are calling the Select Committee on Climate Crisis.
The announcement was met with heavy skepticism from progressives, including Ocasio-Cortez, who sought a committee that would be made up of members who promised to reject donations from the fossil fuel industry and would work on legislation to help the economy by transitioning the U.S. electric grid to be run on clean energy.
Castor has previously told reporters that she would not make members on the committee commit to rejecting fossil fuel donations--citing their first amendment rights.
It's also anticipated that the new committee will lack legislative authority and subpoena power.
In DC + even in our own party, it‘s apparently too controversial to ask that we keep oil+gas co’s away from enviro policy.
It’s too controversial to talk about the socioeconomics of Flint, WV, PR & the Bronx.
It’s too controversial to plan for disasters that are already here.— Alexandria Ocasio-Cortez (@AOC) December 31, 2018The rising progressive star campaigned heavily on tackling climate change once she took office and has championed the Green New Deal--an idea created by The Sunrise Movement, a millennial-run activist group. A week after the midterms Ocasio-Cortez engaged in a sit-in at Pelosi's office with activists to protest in favor of the Green New Deal's establishment.
More than 43 Democratic House members have since announced their support for the Green New Deal committee.
While she did "applaud" the creation of the new select committee that will focus on climate change, Ocasio-Cortez argued that the committee will be weak without subpoena power.
“There is still time to strengthen it,” she said. “For all our sake, I hope that we do.”
https://thehill.com/homenews/house/423362-ocasio-cortez-slams-democrats-for-deeming-climate-goals-too-controversial
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Jan 1, 2019 | New York Times
By Paul Krugman
Let’s be honest with ourselves: The new Democratic majority in the House won’t be able to enact new legislation. I’ll be astonished if there are bipartisan deals on anything important — even on infrastructure, where both sides claim to want action but what the G.O.P. really wants is an excuse to privatize public assets.
So the immediate consequences of the power shift in Washington won’t involve actual policymaking; they’ll come mainly from Democrats’ new, subpoena-power-armed ability to investigate the fetid swamp of Trumpian corruption.
But that doesn’t mean that Democrats should ignore policy issues. On the contrary, the party should spend the next two years figuring out what, exactly, it will try to do if it gains policymaking power in 2021. Which brings me to the big policy slogan of the moment: the so-called Green New Deal. Is this actually a good idea?
Yes, it is. But it’s important to go beyond the appealing slogan, and hash out many of the details. You don’t want to be like the Republicans, who spent years talking big about repealing Obamacare, but never worked out a realistic alternative.
So what does the Green New Deal mean? It’s not entirely clear, which is what makes it a good slogan: It could mean a number of good things. But the main thrust, as I understand it, is that we should make a big move to tackle climate change, and that this move should accentuate the positive, not the negative. In particular, it should emphasize investments and subsidies, not carbon taxes.
But wait, shouldn’t we be considering a carbon tax? In principle, yes. As any card-carrying economist can tell you, there are big advantages to discouraging pollution by putting a price on emissions, which you can do either by imposing a tax or by creating a cap-and-trade system in which people buy and sell emission permits.
It’s Economics 101: A pollution tax or equivalent creates broad-based incentives in a way less comprehensive policies can’t. Why? Because it encourages people to reduce their carbon footprint in all possible ways, from using renewable energy, to conservation, to shifting consumption away from energy-intensive products.
A carbon tax is, however, a tax — which will upset the people who have to pay it. Yes, the revenue from a carbon tax could be used to cut other taxes, but convincing enough people that they will be better off over all would be a very hard sell. And claims that a carbon tax high enough to make a meaningful difference would attract significant bipartisan support are a fantasy at best, a fossil-fuel-industry ploy to avoid major action at worst.
The point is that going for a less-than-ideal but salable policy, at least initially, is better than letting the best be the enemy of the good. That was the lesson of health care reform: Single payer had no chance of being enacted under President Barack Obama, but a somewhat awkward public-private hybrid system that preserved employer-based insurance was (just) doable — and 20 million Americans gained coverage.
Now that the principle of universal coverage is out there, a gradual transition to some version of Medicare for all is starting to look politically possible; but it was important to start with policies that achieved big progress without greatly disrupting people’s lives.
Can we similarly make big progress on climate change without disrupting Americans’ lives too much? My read of the data says yes.
The majority of U.S. greenhouse gas emissions come from electricity generation and transportation. We could cut generation-related emissions by two-thirds or more simply by ending the use of coal and making more use of renewables (whose prices have fallen drastically), without requiring that Americans consume less power. We could almost surely reduce transportation emissions by a comparable amount by raising mileage and increasing the use of electric vehicles, even if we didn’t reduce the number of miles we drive each year.
These are gains that could be achieved with a combination of positive incentives like tax credits and not-too-onerous regulation. Add in investments in technology and infrastructure that supports alternative energy, and a Green New Deal that dramatically reduces emissions seems entirely practical, even without carbon taxes. And these policies would visibly create jobs in renewable energy, which already employs a lot more people than coal mining.
Of course, some people would be hurt. The 53,000 Americans still employed in coal mining would eventually have to find other employment (and aid for workers in transition industries should be a part of the Green New Deal). Profits of fossil-fuel companies would also go down, although these companies now give almost all their money to the G.O.P., so it’s not clear why Democrats should care.
Over all, however, Democrats can surely do for climate change what they did for health care: devise policies that hugely improve the situation while producing far more winners than losers. They can’t enact a Green New Deal right away — but they should start preparing now, and be ready to move in two years.
https://www.nytimes.com/2018/12/31/opinion/green-new-deal-democrats.html
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2019 Outlook: Spotlight Moves to ‘Economies of Climate Change’
Jan 1, 2019 | BNA Daily Environment Report
By Bobby Magill
The next nine months will be homework time for countries, climate advocacy groups, and even oil companies as they prepare to respond to a United Nations call to bring concrete plans for deep greenhouse gas emission cuts to a September climate summit.
The summit, called by U.N. Secretary-General Antonio Guterres, will be the biggest gathering of heads of state and business leaders on climate change since the Paris climate agreement was struck in 2015. It follows the December climate talks in Katowice, Poland.
Before they convene in New York in September, countries are expected to begin drawing up policies and greenhouse gas pollution targets to signal a sustained commitment to confronting climate change, Rachel Cleetus, an economist and policy director with the climate and energy program at the Union of Concerned Scientists, told Bloomberg Environment.
“One could see the secretary-general’s summit as a referendum not on the science of climate change but on the economies of climate change,” Robert Orr, U.N. special adviser to the secretary-general on climate change, told Bloomberg Environment. “This is the moment to prove that the economic model of addressing climate change works. In September, that’s what we’ll see.”
Several recent U.N.-sponsored scientific reports show that countries aren’t on track to meet their greenhouse gas reduction targets under the 2015 Paris Agreement.
Climate Challenge
Guterres called acting on climate change a “moral duty,” and in Poland he framed the threat of global warming as an existential crisis for humanity.
To keep climate change at the top of the international agenda, Guterres asked heads of state, heavy industry, and other groups to come to the summit in New York City to show exactly how they plan to go above and beyond the pollution-cutting commitments they made as part of the 2015 Paris pact.
“We haven’t seen heads of state and government come together at this scale since Paris,” special adviser Orr said. “The signs are good that many governments are starting to do the hard work to prepare them to come to New York in September to rise to the challenge.”
Local governments, business leaders, investors, and advocacy groups will be called to the summit in addition to national governments, according to Orr.
“The real work is going on now for all of these coalitions,” he said. “The summit is really a platform for the highest performers to stretch the furthest and open the doors to those who can move with them.”
At the very least, the summit will keep political pressure on national governments to hold to their commitments under the Paris accord, Mindy S. Lubber, president and chief executive officer of the business sustainability group Ceres, told Bloomberg Environment.
Missed Opportunity
In Poland, envoys from more than 190 countries finalized rules for implementing the 2015 Paris Agreement and recognized that the pact calls for countries to announce by 2020 more steps to cut climate pollution.
But that outcome left climate advocacy groups and some scientists feeling that the talks were a “missed opportunity” for countries to show that they are determined to confront the threat of climate change, Cleo Verkuijl, a research fellow at the Stockholm Environment Institute, told Bloomberg Environment.
“The U.N. has set 2020 for countries to submit a next round of national climate plans, known as NDCs [Nationally Determined Contributions]. The secretary-general’s summit is one of the last big political moments in advance of this deadline,” Verkuijl said.
So far, the global commitment to the Paris pact has been tepid, and countries’ overall weak response to an international call for greater ambition to cut pollution and adapt to climate change bodes ill for the Paris pact, Verkuijl said.
The upcoming summit is an opportunity for countries to add to their climate ambition, Orr said.
“We have a huge amount of transformation to do in a short amount of time,” Orr said. “It’s a race against time. We have the kind of actors coming together that could make it a successful race.”
Homework
That means concerned countries have to take the next nine months to focus on climate policy, Cleetus said.
“Just like Paris, the important thing—where the rubber meets the road—is when countries go back home [from Poland] and make decisions about policies and technological and social and economic changes that they’re going to implement on the ground,” Cleetus said.
Some countries will likely announce new climate policies and double down on their commitments to the Paris accord ahead of the September summit, David Waskow, director of the International Climate Initiative at the World Resources Institute, told Bloomberg Environment.
“You’ll see more countries coming forward to make clear that they’re doing their homework and looking seriously at what their current commitments are and how they can expand on those,” Waskow said.
The summit will occur several months before the next round of international climate talks, known as the Conference of the Parties to the U.N. Framework Convention on Climate Change. Those talks are expected to be held in Chile in December 2019 or January 2020. Another round of climate talks is scheduled for Europe in late 2020.
https://news.bloombergenvironment.com/environment-and-energy/2019-outlook-spotlight-moves-to-economies-of-climate-change
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