. 2
( 16)



Transactions Royal Soc™y A, Aug. 29, 2008, at 15.
For example, at the most recent meeting of the Group of 8 industrialized nations, the United States

refused to endorse carbon trading, one of the centerpieces of the Kyoto Protocol, as a means to reduce
emissions. U.S. Blocks Consensus of G8-plus-Five on Global Warming Issues, Greenwire, Mar. 19,
2007, LEXIS-NEXIS, News.
Alister Doyle, U.N. Climate Talks Stagnate Despite Public Worries, Environmental News Network,

Mar. 2, 2007, available at http://uk.reuters.com/article/environmentNews/idUKL0223966020070303
(last visited May 25, 2008). Russia and India are, respectively, the third- and fourth-largest producers
of greenhouse gas emissions globally, after China and the United States. Nita Bhalla, India Says Its
Overview 19

G77 countries and China to the European Union™s efforts to insert language in
negotiating documents that would have committed the Parties to seeking to keep
temperature increases below 2—¦ C.123 Furthermore, the G77/China bloc expressed the
view that developing countries should not be required to assume binding obligations
to reduce emissions given their need for rapid economic growth and development.124
Rather, the focus at COP12 was on adapting to climate change impacts that increas-
ingly seem inevitable.125
More hopefully, the Bali Action Plan, adopted at the thirteenth Conference of
the Parties, does call for the Ad Hoc Working Group on Long-term Cooperative
Action to consider potential mitigation measures that could be taken by developing
countries,126 though this provision is freighted with ambiguous language, requiring
that the measures be “nationally appropriate,” and supported by “technology, ¬nanc-
ing and capacity building.”127 Burgeoning world emissions are setting us on a path
that, absent a “radical reframing of both the climate change agenda, and the eco-
nomic characterization of contemporary society,” may ensure temperature increases
of at least 4—¦ C above preindustrial levels.128 Even with the United States more com-
mitted to take action under President Obama, it is doubtful that the international
climate treaty regime will be able to do enough to address this problem.


The consensus has become increasingly clear that meaningful reductions by major
greenhouse gas“emitting nations must begin soon or we will inevitably cross the

Carbon Emissions not Harming the World, Environmental News Network, Dec. 14, 2006, available at
http://www.enn.com/today.html?id=11845 (last visited May 25, 2008).
The European Union in February 2007 did agree to reduce emissions to 20% below 1990 levels
by 2020 and will push for a 30% commitment by industrialized states by that date. Europa, Climate
Change and the EU™s Response, MEMO/07/58, Feb. 15, 2007, available at http://europa.eu/rapid/
Language=enIan (last visited May 25, 2008); Ian Traynor & David Gow, EU Promises 20%
Reduction in Carbon Emissions by 2020, Guardian Unlimited, Feb. 21, 2007, available at http://
environment.guardian.co.uk/climatechange/story/0,2017600,00.html (last visited May 25, 2008).

Chukwumerije Okereke et al., Assessment of Key Negotiating Issues at Nairobi Climate COP/MOP

and What it Means for the Future of the Climate Regime, Tyndall Centre for Climate
Change Research, Working Paper 106 (June 2006), available at http://www.oxfordclimatepolicy.org/
publications/TyndallWorkingPaper2007.pdf (last visited May 25, 2008). More hopefully, the most
recent Chinese Five Year Plan includes a commitment to reduce energy intensity by 20% by 2010. Id.
at 19.
UNFCCC, Further Commitments for Annex I Parties and Programme of Work, Ad Hoc Working Group

(2006), available at http://unfccc.int/¬les/meetings/cop_12/application/pdf/awg__conclusions.pdf (last
visited May 25, 2008); UNFCCC, First In-Session Workshop of the Ad Hoc Working Group on Further
Commitments for Annex I Parties under the Kyoto Protocol (2006), available at http://unfccc.int/
¬les/meetings/cop_12/application/pdf/awg2_in_sess__report_an.pdf (last visited May 25, 2008).
Bali Action Plan, supra note 97, at ¶ 1(b)(ii).


Anderson & Bows, supra note 120, at 18.
William C. G. Burns and Hari M. Osofsky

critical thresholds that commit this world to centuries of potentially catastrophic
impacts. As one recent study indicated, avoiding temperature increases of 2“2.5—¦ C
over preindustrial levels at this point would require carbon dioxide emissions to
level off by 2015“2020 at not much above current levels, and to decline to no more
than a third of those levels by 2100. In addition to these reductions, it would require
substantial cuts in other potential greenhouse gases.129
As the foregoing discussion makes clear, the likelihood of the international legal
regime achieving these goals seems low. Moreover, even without the existing political
dif¬culties, climate change is not a problem that can be addressed at only one level
of governance. Behavior that causes greenhouse gas emissions takes place and is
regulated at the local, state, national, regional, and international levels.
This combination of the urgency of the problem and complexity of politico-legal
solutions has caused many State and non-State actors to look beyond traditional inter-
national treaty mechanisms for solutions to anthropogenic climate change.130 In this
context, litigation and other legal actions at subnational, national, and international
levels have evolved from innovative ideas to an emerging practice area over the last
several years.131 Although the U.S. Supreme Court™s decision in Massachusetts v.
EPA helped to bring these cases into the public consciousness,132 actions have been
pending in state, national, and regional and international tribunals for a number of
A representative sampling of this ever-growing list of cases includes the following:

Subnational and National Actions
r United States. More than a dozen actions related to climate change have been
¬led in state and federal courts in the United States, and more are anticipated.133
A cross section of the actions ¬led to date include the following:
r In Massachusetts v. EPA, twelve States and several cities and NGOs ¬led an
action against the U.S. Environmental Protection Agency (EPA), challenging
its denial of a petition to regulate greenhouse gas emissions from new motor
vehicles under section 202(a)(1) of the Clean Air Act. The U.S. Supreme
Court held for the plaintiffs, concluding that the EPA had authority to
regulate such emissions and that the agency must ground its reason for action

Bierbaum et al., supra note 16, at xi. See also Hansen, supra note 1, at 14,293.

See Hari M. Osofsky, The Geography of Climate Change Litigation: Implications for Transnational

Regulatory Governance, 83 Wash. U. L.Q. 1789, 1795“1800 (2005); Eric A. Posner, Climate Change
and International Human Rights Litigation: A Critical Appraisal, 155 U. Pa. L. Rev. 1925 (2007).
See Eric Torbenson, Lawyers Preparing for Explosion of Climate-Related Work, Dallas Morning

News, Business Section, June 24, 2007.
Massachusetts v. EPA, 127 S. Ct. 1438; 167 L. Ed. 2d 248 (2007).

Greenpeace, History of Climate Change Litigation, June 2007, available at http://www

.greenpeace.org/raw/content/new-zealand/press/reports/history-climate-change-litigation.pdf (last vis-
ited May 25, 2008). For a good summary of current actions in U.S. courts, see Justin R. Pidot, Global
Warming in the Courts (2006), Georgetown Environmental Law & Policy Institute, available at http://
(last visited May 25, 2008).
Overview 21

or inaction in the terms of the Act.134 In April 2009, the EPA published a
proposed ¬nding that greenhouse gases in the atmosphere endanger the
public welfare of current and future generations,135 potentially paving the
way for EPA regulation.
r In Friends of the Earth, Inc. v. Watson, a suit was brought by two NGOs
and the City of Boulder, Colorado, against the Overseas Private Investment
Corporation and Export-Import Bank, alleging that these entities™ failure to
conduct an environmental review of the impacts of their funding of fossil fuel
projects violates the National Environmental Policy Act.136 Cross-motions for
summary judgment were denied by a U.S. district court in 2007.137
r In State of Connecticut v. American Electric Power Co., several States, the
City of New York, and several NGOs ¬led an action against ¬ve major power
companies for “the public nuisance” of “global warming” under federal
common law or state law. The case is currently on appeal to the Second
Circuit Court of Appeals after a district court judge dismissed the case on
the grounds that the action presented nonjusticiable political questions.138
r In State of California v. General Motors Corp., the State of California ¬led an
action against six auto manufacturers for public nuisance. The suit alleged
that the greenhouse gas emissions associated with the defendants™ production
of automobiles “is harming California, its environment, its economy and the
health and well-being of its citizens.”139 The suit seeks monetary damages
and a declaratory judgment that each defendant was jointly and severally
liable for future damages incurred by the state for the ongoing nuisance of
climate change.140 The case was dismissed in September 2007 by the U.S.
District Court for the Northern District of California on the grounds that
plaintiff™s claims raised nonjusticiable political questions and is currently on
appeal to the Ninth Circuit.141
r In Comer v. Nationwide Mutual Insurance,142 fourteen individuals ¬led suit
against a group of energy and re¬ning companies for damages sustained
to their property as a result of Hurricane Katrina. Plaintiffs contended that
the greenhouse gas emissions of the defendants increased the damages suf-
fered by plaintiffs by intensifying the hurricane.143 The U.S. District Court

Massachusetts v. EPA, 127 S. Ct. at 1438.

40 CFR Ch. 1, Part III, Proposed Endangerment and Cause or Contribute Findings for Green-

house Gases Under Section 202(a) of the Clean Air Act, Proposed Rule, Apr. 24, 2009, available at
http://www.epa.gov/climatechange/endangerment/downloads/EPA-HQ-OAR-2009-0171-0001.pdf (last
visited on May 28, 2009).
Friends of the Earth, Inc. v. Watson, 2005 U.S. Dist. LEXIS 42335 (2005).

Friends of the Earth, Inc. v. Mosbacher, 488 F. Supp. 2d 889 (N.D. Cal. 2007).

Connecticut v. Am. Elec. Power Co., 406 F. Supp. 2d 265, 273 (S.D.N.Y. 2005).

State of California v. Gen. Motors Corp., Case No. CO5“05755 (N.D. Cal. 2006).

Id. at 3.

State of California v. Gen. Motors Corp., Order Granting Defendants™ Motion to Dismiss, No. C06“

05755 MJJ (N.D. Cal. 2007).
Comer v. Nationwide Mut. Ins., 2005 WL 1066645 (S.D. Miss. 2006) (unpublished opinion).

Third amended complaint, Comer v. Murphy Oil, 2006 WL 147089 I (S.D. Miss. 2006).
William C. G. Burns and Hari M. Osofsky

for the Southern District of Mississippi dismissed the action without prej-
udice on the grounds that class action claims unrelated to climate change
against insurance and mortgage companies were inappropriate.144 The Court
subsequently dismissed the amended complaint on the grounds that plain-
tiffs lacked standing and plaintiffs™ claims were “non-justiciable pursuant to
the political question doctrine.”145
r The Center for Biological Diversity, a U.S. NGO, petitioned the U.S.
National Marine Fisheries Service in 2004, seeking listing of elkhorn and
staghorn corals under the Endangered Species Act.146 The species were
added to the of¬cial list of Threatened Species in 2006.147 A petition by the
Center for Biological Diversity to list the polar bear under the ESA148 also
resulted in its listing by the U.S. Department of Interior as a threatened
species in May of 2008.149
r Canada
r In 2007, the NGO Friends of the Earth Canada ¬led a lawsuit against the gov-
ernment of Canada alleging that the federal government is violating section
166 of the Canadian Environmental Protection Act, which requires compli-
ance with international agreements to prevent pollution. The suit contends
that Canada is failing to ful¬ll its commitments under the Kyoto Protocol
and the United Nations Framework Convention on Climate Change.150
r New Zealand
r Greenpeace New Zealand Inc. v. Northland Regional Council and Mighty
River Power Limited involved the application by a power company to a
regional council to develop a coal-¬red facility. The High Court held that
under the Resource Management Act of 1991 a consent authority could take
into account whether the proposed project would enable a reduction in


Comer v. Murphy Oil USA, Order Granting Defendants™ Motion to Dismiss, Civil Action No. 1:05-

CV-436-LG-RHW I (S.D. Miss. 2007).
Ctr. for Biological Diversity, Petition to List Acropora Palmata (Elkhorn Coral), Acropora Cervi-

cornis (Staghorn Coral), and Acropora Prolifera (Fused-Staghorn Coral) as Endangered Species
Under The Endangered Species Act (2004), available at http://www.biologicaldiversity.org/swcbd/
SPECIES/coral/petition.pdf (last visited May 25, 2008).
Endangered and Threatened Species: Final Listing Determinations for Elkhorn Coral and Staghorn

Coral, 71 Fed. Reg. 26,852 (May 9, 2006); 50 C.F.R. § 223.102.
Kassie Siegel & Brendan Cummings, Petition to List the Polar Bear (Ursus Maritimus) as a Threatened

Species under the Endangered Species Act, Feb. 16, 2006, available at http://www.biologicaldiversity
.org/swcbd/SPECIES/polarbear/petition.pdf (last visited May 25, 2008); Order Granting Plaintiffs™
Motion for Summary Judgment and Injunction, Ctr. for Biological Diversity v. Kempthorne,
No. C 08“1339 CW, Apr. 28, 2008, available at http://www.biologicaldiversity.org/species/
Department of the Interior, Fish and Wildlife Service, Endangered and Threatened Wildlife and

Plants; Determination of Threatened Status for the Polar Bear (Ursus maritimus) Throughout Its
Range, 50 C.F.R. § 17 (2008), available at http://www.doi.gov/issues/polar_bears/Polar%20Bear%
20Final%20Rule_to%20FEDERAL%20REGISTE%20-Final_05“14-08.pdf (last visited on June 2,
Canada Sued for Abandoning Kyoto Climate Commitment, supra note 107.
Overview 23

greenhouse gas emissions by the use and development of renewable energy
in determining whether to grant the application.151
r In Genesis Power Ltd. v. Franklin District Council, New Zealand™s Environ-
ment Court allowed an appeal brought by the Energy Ef¬ciency and Con-
servation Authority against the refusal for permission to build a wind farm,
under the Resource Management Act of 1991. The Court cited reduction of
emissions of greenhouse gases and climate change as factors supporting the
case, and the project was subsequently approved.152
r Australia
r In Australian Conservation Foundation v. Latrobe City Council, the owner of
the Hazelwood coal-¬red station in Victoria, one of Australia™s largest produc-
ers of greenhouse gas emissions, applied to develop an alternative coal¬eld,
which would prolong the plant™s operation until 2031. Four environmental
groups brought an action in the Victorian Civil and Administrative Tribunal
alleging that a reviewing panel™s failure to consider potential greenhouse gas
emissions from the project violated the Victorian Planning and Environment
Act of 1987. The Tribunal held that the panel should consider the environ-
mental impacts of the greenhouse gas emissions associated with the project.153
r In Gray v. Minister for Planning, an activist brought an action in the New
South Wales Land and Environment Court, contending that the project™s
greenhouse gas assessment should have included greenhouse gas emissions
from the combustion of coal bought from the project by third parties. The
Court found for the plaintiff, holding that the failure to take into account
the cumulative impacts of greenhouse gas emissions produced by the project
violated the “environmentally sustainable development” principles of inter-
generational equity and the precautionary principle.154
r Germany
r In 2007, the NGO GermanWatch ¬led a complaint against Volkswagen
with the Federal Ministry of Economics, contending that the auto compa-
nies “climate damaging product range” violates the OECD Guidelines for
Multinational Enterprises by contravening principles of global sustainable
development.155 The Guidelines provide for a mediation process between the
complainant and companies, and if this fails to resolve a complaint, requires

Greenpeace New Zealand, Inc. v. Northland Reg™l Council and Mighty River Power Ltd., High Court

of New Zealand, Auckland Registry, CIV 2006“404-004617 (2006).
Genesis Power Ltd. v. Franklin Dist. Council, Decision No. A 148/2005, available at http://www.

climatelaw.org/cases/elaw/wind.farms.decision.2005.pdf (last visited Aug. 8, 2007).
Australian Conservation Found. v. Latrobe City Council, 140 LGERA 100 (2004).

Gray v. Minister for Planning [2006] NSWLEC 720.

Germanwatch, Complaint against Volkswagen AG under the OECD Guidelines for Multinational

Enterprises (2000), submitted May 7, 2007, available at http://www.germanwatch.org/corp/vw-besch-
e.pdf (last visited May 25, 2008); see also Cornelia Heydenreich, Gunda Zullich & Christoph Bals,
Germanwatch Raises Complaint Against Volkswagen 2, GermanWatch Brie¬ng Paper (2007), available
at http://www.germanwatch.org/corp/vw-hg07e.pdf (last visited May 25, 2008).
William C. G. Burns and Hari M. Osofsky

a National Contact Point to make recommendations on the implementation
of the Guidelines.156 The complaint has not yet been resolved.
r In 2004, two NGOs, Germanwatch and BUND (the German branch of
Friends of the Earth), brought an action in the Administrative Court in
Berlin against the German Federal Ministry of Economics and Labor. The
Applicants sought to compel the German government to disclose the con-
tribution to climate change caused by projects supported by the German
export credit agency Euler Hermes AG (“Hermes”).157 While the parties ulti-
mately settled, the Applicants pressed for the settlement to set forth in the
framework of a court order (Beschluss). The court order outlines the terms
of the settlement, which included agreement by the defendant to disclose (1)
all energy production projects of a certain value and duration “ arranged by
the kinds of energy “ for which defendant had provided export credit since
January 2003; (2) the total sum of credit provided; and (3) where available,
speci¬c information about the project, including kinds and origins of fuel,
fuel output per ton, and projected period of operation of the plant. The
Court found a legal basis for the Applicant™s request in the German Access
to Environmental Information Act (Umwelt informations gesetz).158
r Nigeria
r Nigerian citizens living near oil production facilities that ¬‚are off natural
gas ¬led a lawsuit against Royal Dutch Shell and other companies engaged
in the practice. The plaintiffs alleged that the practice releases substantial
amounts of greenhouse gases159 and other pollutants into the atmosphere
and violates their constitutional rights to life and dignity. The Federal High
Court found for the plaintiffs, concluding that defendants™ conduct consti-
tuted “a gross violation of [plaintiffs™] fundamental right to life (including
healthy environment) and dignity of human person as enshrined in the Con-
stitution,” though it did not speci¬cally address the impacts of greenhouse
gas emissions. Defendants were also restrained from further ¬‚aring of gas in
the plaintiffs™ community.160 The defendants were subsequently granted a
“conditional stay of executive,” permitting them to phase in the cessation of
¬‚aring; however, they have failed to comply with the conditions imposed by
the Court to date.161

Complaint against Volkswagen AG under the OECD Guidelines for Multinational Enterprises, supra

note 155, at 6.
Germanwatch & Bund, German Government Sued over Climate Change: Brie¬ng 1 (2004), available at

http://www.climatelaw.org/cases/case-documents/germany/export-credit-brie¬ng.pdf (last visited June
9, 2009).
Bund fur Umwelt und Naturschutz Deutschland e.V. & Germanwatch e.V. v. the Federal Republic

of Germany, Order, VG 10 A 215.04 (2004) (unof¬cial translation).
The practice of gas ¬‚aring has contributed more greenhouse emissions than all other sources in

sub-Saharan Africa. Friends of the Earth, Shell Fails to Obey Court Order to Stop Nigeria Flaring,
Again, Media Advisor, May 2, 2007, available at http://www.foei.org/en/media/archive/2007/0502 (last
visited May 25, 2008).
Gbemre v. Shell Petroleum Dev. Co., Suit No. FHC/CS/B/153/2005, Order, Nov. 14, 2005.

Shell Fails to Obey Court Order to Stop Nigeria Flaring, Again, supra note 159.
Overview 25

International Actions
r Inuit Petition
r In 2005, a petition was ¬led with the Inter-American Commission on Human
Rights on behalf of Inuit in Canada and the United States requesting relief for
human rights violations associated with climate change “caused by actions
and omissions of the United States.”162 The petition alleged that climate
change threatened the lives, culture, and economy of the Inuit and consti-
tuted human rights violations under the American Declaration of the Rights
and Duties of Man, as well as other human rights instruments. The Commis-
sion rejected the petition a year later, stating, “the information provided does
not enable us to determine whether the alleged facts would tend to char-
acterize a violation of the rights protected by the American Declaration.”163
However, it subsequently agreed to a hearing to more closely examine the
nexus of human rights and climate change, which took place in March 2007;
the Commission is currently deliberating.
r World Heritage Committee Petitions
r Between 2004 and 2006, several petitions and a report were ¬led by NGOs
with the World Heritage Committee to list World Heritage sites in Australia,
Belize, Peru, Nepal, Canada, and the United States on the “List of World
Heritage in Danger” under the World Heritage Convention on the grounds
that they were threatened by climate change.164 At its Thirtieth Session in
2006, the Committee decided not to list the sites and also rejected a request
to encourage the Parties to draw on projections from the Intergovernmental
Panel on Climate Change when assessing risks to World Heritage Sites.165
The Committee did, however, adopt a “Strategy to Assist State Parties to
Implement Appropriate Management Responses” to climate change and
urged the Parties to the World Heritage Convention to implement the Strat-
egy. Moreover, the Committee decided that World Heritage sites could be
inscribed on the List of World Heritage in Danger on a case-by-case basis,
but also called for a study on alternatives to such listings.166

The tremendous legal breadth of these cases is striking. Unlike efforts to regulate
climate change through the international treaty regime, which clearly fall under

Petition to the Inter American Commission on Human Rights Seeking Relief from Violations Result-

ing from Global Warming Caused by Acts and Omissions of the United States 1, Dec. 7, 2005,
available at http://www.inuitcircumpolar.com/¬les/uploads/icc-¬les/FINALPetitionICC.pdf (last vis-
ited May 25, 2008).
Letter from the Organization of American States to Sheila Watt-Cloutier et al. regarding

Petition No. P-1413“05, Nov. 16, 2006, available at http://graphics8.nytimes.com/packages/pdf/
science/16commissionletter.pdf (last visited May 25, 2008).
For a summary of the petitions, see http://www.climatelaw.org/cases (last visited Aug. 9, 2007).

Heritage Body ˜No™ to Carbon Cuts, BBC News, July 10, 2006, available at http://news.bbc.co.uk/

2/hi/science/nature/5164476.stm (last visited May 25, 2008).
World Heritage Convention, World Heritage Committee Adopts Strategy on Heritage and Climate

Change, available at http://whc.unesco.org/en/news/262 (last visited May 25, 2008).
William C. G. Burns and Hari M. Osofsky

international environmental law, these suits and petitions employ a wide range of
legal theories that intersect through their connection to the problem of climate
change. However, despite their diversity, these cases generally involve two overar-
ching themes: (1) disputes over the appropriate role of government in regulating
greenhouse gas emissions and (2) efforts to force major corporate emitters to reduce
their emissions. These dynamics reinforce the mixed public-private nature of anthro-
pogenic climate change and the state-corporate regulatory dynamics that underlie
both the problem and its solution.167


As climate change litigation proliferates around the world, an assessment of what
its role is and should be in transnational regulatory governance becomes important.
This volume provides such an assessment by exploring representative examples at
subnational, national, and supranational levels. Through employing the perspectives
of academics and practitioners on a wide range of adjudication, the book explores
the present and future of this litigation as part of multiscalar regulation of climate
The ¬rst part of this book focuses on subnational litigation. Stephanie Stern™s
chapter analyzes litigation in the mid-1990s over Minnesota™s early efforts to include
carbon dioxide in environmental cost valuation. In so doing, the chapter explores the
role that even weak state regulation can play in addressing greenhouse gas emissions.
Lesley McAllister™s chapter describes several disputes in Australian courts over the
greenhouse gas impacts of coal mining and discusses the role that such cases can
play in encouraging the inclusion of emissions in environmental assessment. The
chapter by Katherine Trisolini and Jonathan Zasloff considers a dispute over the
siting of a wind farm in New Zealand and its implications for the involvement of
localities in the climate regulation. Finally, Mary Wood™s chapter on the public
trust doctrine explores the potential use of these governmental responsibilities to the
people to address emissions and impacts.
The second part of the book looks at national-level cases. Hari Osofsky™s chapter
on Massachusetts v. EPA examines the way in which the case involves disputes over
the scale of climate regulation and the implications of viewing the case through a
scalar lens. David Grossman™s chapter on the use of tort law against greenhouse gas
emitters discusses pending cases against the auto and power industries, as well as
broader questions about the applicability of tort law to climate change. Jeff Stempel™s
analysis of climate change and insurance law analyzes the extent to which corporate
liability insurance might apply to these suits. The chapter by Kassie Siegel and
Brendan Cummings considers the ways in which the Endangered Species Act has
and could be used to address climate impacts. Finally, Amy Sinden™s chapter on a

See Osofsky, supra note 130.
Overview 27

Nigerian human rights case over gas ¬‚aring engages the possibilities for applying a
rights framework to the problem of climate change.
The third part of the book analyzes supranational cases. Erica Thorson™s chapter
on the World Heritage Convention petitions and report considers the role that this
treaty and its danger listing process has and should play in addressing climate change.
Hari Osofsky™s chapter on the Inuit™s petition to the Inter-American Commission
on Human Rights analyzes the role of actions whose ability to affect direct formal
change is limited. The chapter by Jennifer Gleason and David Hunter explores
the possibility of actions using international ¬nancial mechanisms. William Burns™s
chapter discusses the way in which the U.N. Fish Stocks Agreement might be used
to address climate change. Andrew Strauss™s chapter considers the possibility of an
action at the International Court of Justice. Finally, a chapter by David Hunter
explores these petitions in the broader context of international environmental law.
The book concludes by synthesizing these individual accounts and returning to
broader questions of governance. It argues that climate adjudication helps to provide
policy dialogue across scales needed to address the regulatory challenges of climate
change. Although litigation alone cannot solve this overwhelming problem, it serves
as an important tool in encouraging much-needed innovation and action.


State Action as Political Voice in Climate Change Policy:
A Case Study of the Minnesota Environmental
Cost Valuation Regulation

Stephanie Stern—


As the debate over global warming intensi¬ed during the Bush administration, state
legislatures in the United States adopted regulations that conveyed their discontent
with the failure of the national government to regulate carbon dioxide emissions
adequately or to adopt the Kyoto Protocol. Even with the Obama administration™s
efforts at greater federal regulation, state activity continues. These subnational efforts
by states range in stringency but often stop short of substantive regulation that
burdens in-state business interests.1 Such weak or “symbolic” regulation nonetheless
plays an important role in the global climate change debate by fostering political
voice, creating a threat of future regulatory action, and legitimating climate change
as a legally redressable harm.2 An individual state cannot make a signi¬cant impact
on atmospheric carbon dioxide levels or arrest global warming. However, carbon
dioxide regulation by states can make a strong statement about the political will
to address global warming “ a statement that has grown louder as individual state
legislation encourages other states to act and in turn brings pressure to bear upon
the federal government.3

— Associate Professor, Chicago-Kent College of Law. I would like to thank Greg Shaffer, Kirsten Engel,
Barbara Freese, Fred Lebaron, and Annecoos Wiersema for their helpful comments and Jennifer
Mongillo for her able research assistance.
The trend of relatively weak state regulation may be slowly shifting. California recently passed the AB32

legislation, which requires a 25% reduction in the carbon dioxide produced within the state by 2020.
Similarly, in 2001 the governors of the New England states and the eastern Canadian provinces signed
a pact to reduce greenhouse gas emissions to 1990 levels by 2010 and to 10% below that by 2020.
Symbolic regulation takes different forms. Legislators may impose only minor burdens on industry

through legislation that is substantively weak or limited to information disclosure. Alternatively,
lawmakers may enact unrealistically strict and sweeping regulatory measures that agencies cannot
implement without great delay and compromise. See John P. Dwyer, The Pathology of Symbolic
Legislation, 17 Ecology L.Q. 233, 233“34 (1990) (discussing the harms from this latter type of symbolic
legislation to the regulatory process and public debate).
See Kirsten H. Engel & Scott R. Saleska, Subglobal Regulation of the Global Commons: The Case

of Climate Change, 32 Ecology L.Q. 183, 224“26 (2005) (describing how subnational levels of
government, such as individual states, can motivate industry to support federal regulation by creating
an inconsistent patchwork of state laws).

Stephanie Stern

There has been increasing interest among state policymakers in regulatory models
that force polluting entities to internalize the societal costs of their carbon dioxide
emissions. Electricity generation, which is responsible for 38% of U.S. carbon diox-
ide emissions, has been one target of state regulatory efforts.4 In 1993, well before
the current ¬‚urry of climate change activity, Minnesota enacted an environmental
cost valuation statute that requires utility companies to provide estimates of environ-
mental costs associated with power generation. The statute empowers the Minnesota
Public Utilities Commission (Commission) to consider these costs when approving
resource plans or issuing permits. The statute delegated to the Commission the task
of determining which environmental externalities to value and how to quantify those
costs. The Commission in turn charged an administrative law judge with overseeing
a contested case proceeding and drafting detailed recommendations for covered
pollutants and cost value ranges (i.e., the lowest reasonable value and a midlevel
value for the environmental costs of electricity generation).
The contested case proceeding, In the Matter of Quanti¬cation of Environmental
Costs, created a dual role for the administrative law judge as both an interpreter and
a creator of law.5 The administrative law judge, Allan Klein, weighed expert testi-
mony and proposals in light of the statutory mandate and crafted the implementing
regulations that the Commission subsequently adopted. Judge Klein recommended
requiring cost valuation for carbon dioxide emissions, but proposed cost value ranges
that were too low to in¬‚uence typical Commission decisions. Following the Com-
mission™s ¬nal order adopting these cost value ranges, industry and environmental
interests petitioned the Minnesota Court of Appeals for a writ of certiorari.6 The
Court of Appeals upheld the cost value regulation, ¬nding that the Commission
was acting within the sphere of its administrative expertise and thus was entitled to
signi¬cant judicial deference.7
The Minnesota environmental cost value regulation provides a case study of the
linkages between judicial and regulatory dialogues and the multifaceted role of state
judges in adjudicating global public goods problems. The regulation also offers a
more nuanced view of the effects of weak or symbolic regulation on industry, gov-
ernment, and the public. At ¬rst glance, the environmental cost regulation appears
to lack meaningful impact. Closer examination reveals a more subtle and complex
dynamic. The relatively weak regulation and low cost values that the Commission
ultimately adopted were a compromise between the state™s desire to introduce carbon
dioxide regulation and to safeguard in-state businesses. Although the carbon dioxide
cost values had limited regulatory impact, the regulation nonetheless had important

See U.S. Environmental Protection Agency, Human-Related Sources and Sinks of Carbon Dioxide,

available at http://www.epa.gov/climatechange/emissions/co2_human.html.
See In the Matter of the Quanti¬cation of Environmental Costs, Of¬ce of Administrative Hearings for

the Minnesota Public Utilities Commission, Findings of Fact, Conclusions, Recommendation and
Memorandum (Mar. 22, 1996), available at http://www.oah.state.mn.us/aljBase/25008632.rt3.htm.
See In re Matter of Quanti¬cation of Environmental Costs, 578 N.W.2d 794, 799 (Minn. Ct.

App. 1998).
See id.
State Action as Political Voice in Climate Change Policy 33

indirect effects on political awareness and industry action. First, the Minnesota
regulation served as a form of political protest against national policy. The cost
value regulation fostered political voice and encouraged regulatory dialogue and
information sharing. Second, the statute created risk for utility companies that the
Commission would delay or deny permits for high-polluting baseload facilities or
that the Commission would substantially increase cost values in the future. Thus,
while the regulation was weak overall, it held the threat of being signi¬cantly stronger
in certain circumstances. Perhaps most importantly, the use and acceptance of cost
valuation in Minnesota raised the specter of future regulation that would require
utilities to pay for, rather than merely report, the social costs of electricity generation.
The holdings of the administrative law judge and the Minnesota Court of Appeals
ampli¬ed this regulatory threat. The contested case proceeding and appellate litiga-
tion paved the way for future regulation by substantiating the role of carbon dioxide
in global warming and creating a precedent that scienti¬c uncertainty would not
bar climate change regulation.8


1.1. Legislative Efforts
In 1993, Minnesota enacted § 216B.2422, an environmental externality reporting
statute, which requires state utility companies to submit information on the envi-
ronmental costs of their electricity generation. This statute replaced an “adder
approach”9 where utilities compensated renewable energy providers for avoided costs
by purchasing mandated percentages of renewable energy.10 The adder approach
was passed in 1991 without debate on the ¬‚oor as an amendment to another bill and
was unusual for the high burdens it imposed on industry (and thus consumers).11
The statute required utility companies to pay renewable energy providers for the
social costs avoided by the renewable energy (i.e., positive externalities) by buying
speci¬ed amounts of renewable energy from those providers. Notably, the burden-
some nature of the original adder approach departs from the public choice model,
where politicians attempt to curry public favor while imposing few if any costs on

Holly Doremus describes a similar pattern of judicial deference to agency science in the federal

system but notes that in some contexts, such as the Endangered Species Act, courts have frequently
taken a more interventionist approach. See Holly Doremus, The Purposes, Effects, and Future of the
Endangered Species Act™s Best Available Science Mandate, 34 Envtl. L. 397, 430“31 (2004) (“[W]here
there is substantial scienti¬c uncertainty, such that experts disagree on the interpretation of the
available data, the agency™s interpretation will generally enjoy substantial deference.”).
Adder approaches add a unit externality cost to the standard resource cost to re¬‚ect costs to society.

Adders may be useful in resource planning, raising awareness, or, as in the 1991 Minnesota statute,
estimating environmental taxes and payments.
See Minn. Stat. § 216B.164(4)(b) (repealed 1993).

See Interview with Michael Noble, Executive Director, Fresh Energy, in St. Paul, MN (Oct. 27, 2006).
Stephanie Stern

industry. The utilities apparently did not notice the adder provision until after it was
signed into law, at which point they vigorously opposed it. The passage of the adder
approach, and the threat that it would remain on the books, gave the legislature and
environmental interests strong political leverage. In the face of political outcry and
signi¬cant implementation concerns, the legislature repealed the adder in 1993 but
was able to replace it with a second piece of legislation, the environmental cost val-
uation statute. The information disclosure approach of the cost valuation statute did
not equal the regulatory bite of the adder approach. Nonetheless, the cost valuation
statute was progressive for a time when climate change was just beginning to appear
on the radar of political consciousness.
The Minnesota cost valuation statute requires the Commission to “quantify and
establish a range of environmental costs associated with each method of electricity
generation” so that utilities can report their environmental externality costs.12 The
statute instructs utilities to “use the values established by the commission in conjunc-
tion with other external factors, including socioeconomic costs, when evaluating and
selecting resource options in all proceedings before the commission.”13 Minnesota
law requires utilities to submit resource plans every two years that assess energy
resources and forecast energy needs. The Commission has the power to approve,
reject, or modify resource plans consistent with the public interest.14 In addition, if
a utility wishes to build a large electric power generating plant, it must apply to the
Commission for a certi¬cate of need. To gain approval, the utility must show that
the demand for electricity cannot be met more cost-effectively through other mea-
sures and that the planned nonrenewable facility imposes lesser socioeconomic and
environmental costs than a renewable energy facility.15 The cost valuation statute
requires utilities to disclose environmental costs, which the Commission then con-
siders when deciding whether to approve resource plans or issue certi¬cate of need
The cost valuation statute provided no substantive guidance on how to implement
its broad dictate that the Commission consider environmental costs in resource plan-
ning decisions. It did not specify how the Commission should weigh environmental
costs against other concerns, such as consumer rates. The statute also left open such

Minn. Stat. § 216B.2422(3)(a).

Id. A prior agency rule passed in 1990 required the Commission to consider adverse effects on the

environment, but section 216B.2422 added a new dimension by requiring utilities to actually quantify
these costs. See Findings of Fact, Conclusions of Law and Order Adopting Rules, Minnesota Public
Utilities Commission, Docket No. E999/R-89“201 (July 10, 1990) (agency rule).
See Minn. Stat. § 216B.2422(2) (“As part of its resource plan ¬ling, a utility shall include the least cost

plan for meeting 50 and 75 percent of all new and refurbished capacity needs through a combination
of conservation and renewable energy resources.”).
See Minn. Stat. §§ 216B.243(3) & (3)(a). Minnesota law also requires that, “The commission shall

not approve a new or refurbished nonrenewable energy facility in an integrated resource plan or
certi¬cate of need . . . nor shall the commission allow rate recovery for such a nonrenewable energy
facility, unless the utility has demonstrated that a renewable energy facility is not in the public interest.”
See Minn. Stat. § 216B.2422(4).
State Action as Political Voice in Climate Change Policy 35

important questions as what types of environmental impacts are subject to valuation
(air emissions, water contaminants, land use, etc.), the methodology utility compa-
nies should use to quantify costs, and whether environmental costs values should
vary by geographic area.16

1.2. The Administrative Process and Contested Case Proceeding
In August 1993, the Minnesota Public Utilities Commission, the administrative
agency with rulemaking authority under the statute, turned to the task of ¬lling the
legislative gaps.17 The Commission noted that the overarching goal of the imple-
menting regulations was to “enable utility planners to compare the costs of resource
alternatives more accurately and facilitate the selection of the lowest-cost resources
from a total societal cost perspective.”18 On March 1, 1994, the Commission adopted
interim rules providing values for ¬ve types of emissions and determined that exter-
nality values are required only for proceedings to select new resources that replace
or supplement existing facilities.19
The Commission then initiated a contested case proceeding for a ¬nal deter-
mination of the pollutants subject to cost valuation and the cost value range for
each pollutant. Three groups participated in the contested case proceeding: (1) par-
ties representing industrial interests, including Western Fuels and the major utility
companies; (2) parties representing environmental interests, including the Izaak
Walton League and Minnesotans for an Energy Ef¬cient Environment; and (3)
the Minnesota Pollution Control agency and other representatives of Minnesota
government. Contested case proceedings in Minnesota are quasi-judicial hearings
before an administrative law judge where testimony is under oath and subject to
cross-examination. The administrative law judge™s recommendations carry signif-
icant weight but do not bind the Commission. For controversial issues, such as
carbon dioxide cost valuation, there is a strong incentive for the Commission to
adopt the administrative law judge™s recommendation and thus remove itself from
the direct line of political ¬re.
On March 22, 1996, the administrative law judge, Allan Klein, determined that
cost values should apply to the direct effects or byproducts of electricity genera-
tion rather than to various methods of electricity generation.20 Judge Klein advised
focusing on the byproducts of electricity generation that create the most signi¬cant
environmental costs, are the easiest to quantify, and are most likely to be associated

See Order Establishing Procedure for Establishing Interim Environmental Cost Values, 1993 WL

733124, at — 3 (Minn. P.U.C. Aug. 17, 1993).
See id.

See Order Establishing Interim Environmental Cost Values for Air Emissions Associated with Electric

Generation, 1994 WL 232372 (Minn. P.U.C. Mar. 1, 1994).
See id.

See In the Matter of the Quanti¬cation of Environmental Costs, supra note 5.
Stephanie Stern

with Minnesota™s future electricity resource planning decisions.21 He then turned
to the task of determining the speci¬c pollutants that would be subject to environ-
mental cost valuation. Carbon dioxide was the most controversial of the proposed
pollutants. The environmental interests lobbied strenuously for the inclusion of
carbon dioxide, while the utility companies presented expert testimony that denied
climate change or disputed its signi¬cance.
In the Matter of Quanti¬cation of Environmental Costs was one of the ¬rst cases
to test the science of climate change in a court setting. At the time, global warming
trends were evident. However, there was substantial uncertainty about attribution
and severity of consequences.22 During the contested case proceeding, the utilities
presented an A-team of ¬ve expert witnesses on climate change science. These wit-
nesses included such well-known global warming skeptics as Richard Lindzen, Pat
Michaels, and Robert Balling. Lindzen testi¬ed that global warming would only
raise temperatures 0.3 degrees Celsius over the next ¬fty years.23 Michaels testi¬ed
that the research does not indicate that sea levels will increase, and Balling opined
that temperatures would rise no more than a degree.24 These experts criticized the
global warming data from the Intergovernmental Panel on Climate Change (IPCC)
as politically motivated and scienti¬cally unsound. The IPCC, a joint venture of
the United Nations Environment Programme and the World Meteorological Orga-
nization, analyzes peer-reviewed and published scienti¬c, technical, and socioeco-
nomic research to provide regular assessments of the state of knowledge on climate
change.25 The environmental coalition could not afford equally high-pro¬le experts
and offered a policy analyst from the state pollution control agency and two biologists
from the University of Minnesota who volunteered their time.26
After hearing the evidence, Judge Klein recommended setting cost values for
carbon dioxide, as well as particulates, sulfur dioxide, nitrogen oxides, lead, and
carbon monoxide. He relied heavily on the IPCC reports in his decision to require
environmental cost valuation for carbon dioxide.27 However, in the eleventh hour
of the contested case proceeding, the environmental interests suffered a huge defeat
when Judge Klein determined the cost value range for carbon dioxide. He found

See id.

For example, in setting interim cost values the Commission considered the con¬‚icting interpretations

of the impact of CO2 , observing, “[A]lthough the scienti¬c community does not unanimously endorse
the purported connection between CO2 and global warming, the international community and the
federal government have established policies aimed at reducing CO2 emissions on the chance that
these emissions will, in fact, produce the climatic changes forecast by many.” See Order Establishing
Interim Environmental Cost Values for Air Emissions Associated with Electric Generation, supra
note 18.
See Ross Gelbspan, The Heat Is On 39 (1995).

See id.

See Intergovernmental Panel on Climate Change, available at http://www.ipcc.ch/about/about.htm.

See Interview with Barbara Freese, Consultant to the Union of Concerned Scientists, in St. Paul, MN

(Dec. 4, 2006).
See Interview with Allan Klein, Minnesota Administrative Law Judge, in MN (Dec. 6, 2006).
State Action as Political Voice in Climate Change Policy 37

that suf¬cient uncertainty existed to warrant a conservative approach of adopting
low carbon dioxide cost values. He chose a damage rate of 1% of GDP coupled
with a discount rate of 3 to 5% and set the cost range of carbon dioxide at $0.28 to
$2.92 per ton.28 The discount rate is the amount by which costs or damages in future
years are reduced for comparison with present-day values. To put into context the
conservative nature of these estimates, a 2006 report authored by Sir Nicholas Stern,
a senior economist of the British government, estimates the damage rate at 5 to 20%
of global GDP.29 The environmental coalition had argued for a discount rate of zero
or 1%, which would have valued carbon dioxide at $25 per ton.30 The expert from the
Minnesota Pollution Control Agency (MPCA), Peter Ciborowski, had advocated a
discount rate of 1.5% and a damage rate of 1 to 2%, yielding a cost value range of $4 to
$28 per ton.31 In his ¬nal recommendation, Judge Klein decided that a discount rate
of 3 to 5% and lower-end damage estimate of 1% was “consistent with the policy goal
of using conservative values in the face of uncertainty.”32 Ultimately, the $0.28 to
$2.92 cost value range for carbon dioxide was a hollow victory for the environmental
interests; the cost valuation ¬gure was set too low to have a signi¬cant impact on
resource planning decisions.
On December 16, 1996, the Commission adopted Judge Klein™s recommendations
for covered pollutants and cost value ranges. The Commission updated the values
to 1995 dollars and set carbon dioxide cost values at $0.30 to $3.10 per ton.33 The
Commission did not calculate global costs of CO2 but rather focused on harms to four
geographic ranges: urban, metropolitan fringe, rural areas, and areas within 200 miles
of the Minnesota border.34 The Commission also rejected the utility companies™
argument that a broad spectrum of socioeconomic costs not related to environmental
impact should be factored into the initial environmental cost valuation. Instead,
the Commission said the statute called for a two-step procedure. Utilities must
present environmental cost ¬gures that allow the Commission to compare values at
the low end and high end of the environmental cost range.35 After disclosing the
environmental cost values, a utility may then present additional evidence addressing
socioeconomic costs, such as impacts on employment or consumer rates.36

See id.

See Sir Nick Stern, Stern Review: The Economics of Climate Change Summary of Conclusions, at

See In the Matter of the Quanti¬cation of Environmental Costs, supra note 5, at 30.

See id. at 32.

See id.

See Order Establishing Ranges of Environmental Cost Values for Certain Pollutants Associated with

Electricity Generation, 1996 WL 773354 (Minn. P.U.C. Dec. 16, 1996).
On July 7, 1997 the Commission removed CO2 values for the 200-mile range by setting the environ-

mental cost valuation for that area at zero.
See Order Establishing Ranges of Environmental Cost Values for Certain Pollutants Associated with

Electricity Generation, supra note 33.
See Order Modifying Administrative Law Judge™s Fifth Prehearing Order on the Consideration of

Socioeconomic Factors, 1994 WL 777118, at — 3 (Minn. P.U.C. Oct. 28, 1994).
Stephanie Stern

1.3. Litigation before the Minnesota Court of Appeals
Following the Commission™s order setting ¬nal environmental cost values, a non-
pro¬t trade association of fuel producers, users, and suppliers and an environmental
coalition ¬led a certiorari appeal with the Minnesota Court of Appeals. The appeal
alleged that the Commission™s decision to set values for carbon dioxide was improper.
The Minnesota Court of Appeals upheld the order of the Commission, noting
throughout its opinion that administrative bodies are entitled to judicial deference.37
With respect to carbon dioxide cost valuation, the court rejected the claim that
the Commission should not be entitled to deference because it was acting outside
the realm of its expertise when it evaluated the environmental impacts of carbon
dioxide. The court held that the Commission was the appropriate locus of regulatory
decision making and legislative delegation was appropriate. The court also rejected
the claim that the determination of carbon dioxide values was improper because of
the speculative nature of the evidence underlying the environmental cost values.
The Commission and administrative law judge had met the substantial evidence
standard through a careful review that included consideration of expert testimony,
the experiences of New York in setting environmental costs, and the IPCC™s First
Assessment Report and 1992 supplement.38
The Western Fuels Association and other industry representatives also chal-
lenged the Commission™s threshold ¬nding that carbon dioxide harms the envi-
ronment. The court acknowledged uncertainty in the science of global warm-
ing, but found that the administrative law judge had explained the basis for his
determination and that the Commission properly relied on expert testimony and
the IPCC report. The court held that scienti¬c uncertainty did not bar agency
action: “While we acknowledge the concerns about the uncertain and specula-
tive nature of the available data, we are disinclined to prohibit the state from
directing its instrumentalities to engage in environmentally-conscious planning stra-
The appellate litigation and the contested case proceeding illustrate the power
of adjudication to substantiate the importance of climate change as well as af¬rm
state power to address global-scale harms. The litigation established that scienti¬c
uncertainty did not bar climate change regulation, validated reliance on the expertise
of the IPCC, and upheld the Commission™s discretion to regulate carbon dioxide
pursuant to the cost valuation statute. These holdings reduced the legal stumbling
blocks to future climate change regulation in Minnesota.

See In re Matter of Quanti¬cation of Environmental Costs, supra note 6. The court also upheld the

administrative law judge™s decision to limit environmental valuation to six air pollutants rather than
creating cost values for each method of generation and to set the carbon dioxide values at zero for
pollution within 200 miles of Minnesota™s borders.
See IPCC 1990 First Assessment Report and IPCC 1992 supplement, available at http://www.ipcc.

See In re Matter of Quanti¬cation of Environmental Costs, supra note 6.
State Action as Political Voice in Climate Change Policy 39

1.4. The Minnesota Environmental Cost Value Regulation Today
Ten years later, environmental cost valuation remains a requirement for resource
planning in Minnesota. The Commission has updated carbon dioxide values slightly
to $0.36 to $3.76 to re¬‚ect in¬‚ation.40 To date, the Commission has never denied a
certi¬cate of need or other resource approval based on environmental costs. During
this time period, however, the Commission has not reviewed an application to site
a high-emissions coal baseload facility in Minnesota.
The Minnesota environmental cost valuation regulation and ensuing litigation
provide an interesting case study of the effects of seemingly weak regulation on public
perceptions and industry behavior. Section 2 turns to an analysis of how state climate
change regulation, ¬ltered through quasi-judicial and judicial proceedings, can serve
as political protest. Political action or voice in turn fosters regulatory dialogue.


In the decade since the promulgation of the Minnesota cost valuation regulation,
there have been a large number of initiatives nationwide at the state and local level
to address climate change.41 Although the amount of activity at the subnational level
is substantial, the impact of these initiatives is less impressive. Environmentalists
and scholars have criticized states for eschewing strict emissions reductions (such
as the approach adopted by California in its AB32 legislation) and instead enacting
symbolic regulation that is either toothless or infeasible.
The Minnesota environmental cost value regulation reveals a more complex pic-
ture of the subtle, yet signi¬cant, effects that may accrue from weak or symbolic reg-
ulation. Symbolic regulation may convey political messages and alter environmental
norms by signaling opposition to federal climate change policy. Such regulation can
raise awareness and facilitate interstate dialogue and innovation.

2.1. Symbolic Regulation and Political Voice
Scholars have long recognized the allure of symbolic regulation to legislators, agency
of¬cials, and the public. Murray Edelman argued that most regulatory programs are
“symbolic campaigns” where legislators and regulators frame a public problem in the
abstract and dramatic language of public interest.42 The regulatory process assuages

See Minnesota Public Utilities Commission, Environmental Externalities Values Updated Through

2005, available at http://www.puc.state.mn.us/docs/eeupdate.06.pdf.
See Barry G. Rabe, North American Federalism and Climate Change Policy: American State and

Canadian Provincial Policy, 14 Widener L.J. 121, 152“53 (2004) (discussing state initiatives and the
potential for decentralized action to reduce emissions and serve as a testing ground for subsequent
national or international policy approaches).
See Murray Edelman, Symbolic Uses of Politics 56 (1964); cf. Mark Fenster, Polemicist of Public

Ignorance, 17 Critical Rev. 367, 379“83 (2005) (criticizing the lack of methodological rigor in
Edelman™s work).
Stephanie Stern

public concern because it implies that the government shares the concerns of the
citizenry and is acting to address important social problems. This interchange masks,
or at least distracts the public from, the subsequent political capture of administrative
processes by regulated parties.43
More recent work on symbolic regulation has re¬ned these ideas in the context
of environmental law. John Dwyer has observed that symbolic legislation occurs
when politicians capitalize on the strong public support for the environment by
enacting sweeping mandates that transfer the burden of reformulation (and blame)
to agencies.44 Symbolic regulation allows industry to escape substantive burdens
or at least enjoy a period of reprieve while agencies struggle to ¬nd an acceptable
middle-ground approach.45 In their analysis of state climate change legislation,
Kirsten Engel and Scott Saleska have described how states typically focus their
efforts on weak regulation or information-gathering requirements that “appear largely
motivated by legislators™ symbolic desire to be seen as ˜doing something™ about the
pressing global problem of climate change” without actually imposing regulatory
costs on industry.46 States generally justify these measures on grounds other than,
or in addition to, climate change, such as price stability or protection of in-state
alternative energy producers.47
The Minnesota case study offers insight into the circumstances that are likely to
produce symbolic regulation. The familiar account is that symbolic regulation occurs
when vote-hungry legislators attempt to appease public demand for environmental
protection by enacting weak legislation or passing sweeping mandates that shift
responsibility to agencies. The Minnesota experience suggests that this view is too
narrow. Several factors prompted the weak cost value regulation: a prior failure
with the ambitious adder approach, the public goods nature of climate change,
uncertainty about the speci¬c consequences of global warming and its societal costs,
and a less powerful state market where strict regulation would disadvantage in-state
business interests. These factors were critical not only to the legislative enactment
but also to the administrative law judge™s conservative recommendations for cost
value ranges. This analysis suggests that symbolic regulation may be driven not only
by self-serving legislators but also by historical context, economic concerns, public
goods issues, and scienti¬c uncertainty.48
The Minnesota experience also illustrates how symbolic regulation may affect
political debate, industry practices, and future regulation. The Minnesota regula-
tion was undeniably part of a national trend of state climate change regulation

See Edelman, supra note 42.

See Dwyer, supra note 2, at 231.

See id.

See Engel & Saleska, supra note 3, at 215.

See id. at 218“19.

This echoes the legal realists™ focus on the social context of lawmaking. As Joseph William Singer

writes, “Legal principles are not inherent in some universal, timeless logical system; they are social
constructs, designed by people in speci¬c historical and social contexts for speci¬c purposes to achieve
speci¬c ends.” Joseph William Singer, Legal Realism Now, 76 Cal. L. Rev. 465, 474 (1988).
State Action as Political Voice in Climate Change Policy 41

focused on information-gathering and disclosure. Yet the relatively weak nature of
the Minnesota regulation did not render it useless. Even if the legislative or admin-
istrative intent was to create regulation in name only (which is unlikely given the
strong representation of environmental interests in the Minnesota legislature and
the initial passage of the stricter adder approach), the cost value regulation affected
climate change debate on a political level.
The Minnesota regulation was a statement of political opposition to ineffective
national and global climate change policies. Both the administrative law judge
and the Commission acknowledged on the record that Minnesota™s total carbon
dioxide emissions represented 0.1% of global carbon dioxide emissions.49 During
the contested case proceeding, Judge Klein observed:

[E]ven if Minnesota™s utilities stopped emitting any carbon dioxide, the global
problem would be virtually unaffected by our act, except as our action, and similar
actions of others in this country and abroad, cause national governments to take the
kind of actions that will make a difference.50

This statement by the administrative law judge framed carbon dioxide valuation
as a matter of political voice. The cost value regulation was a political call meant
to resonate in the national and even global arenas. Although the cost valuation
statute could not bene¬t Minnesota or affect the global climate change problem,
it could serve as a state protest of national government inaction. Judith Resnik
has described local climate change legislation and initiatives as “expressive efforts
[and] political speech aimed at changing ideas and policies.”51 The Minnesota cost
valuation statute and regulations were a step toward changing perceptions and laying
the groundwork for regional or federal responses. Higher cost values or substantive
emissions limitations would have intensi¬ed the political protest, but such strong
measures were not realistic in light of Minnesota™s limited market power and the
public goods nature of global warming.
In his seminal book, Exit, Voice, and Loyalty, Albert Hirschman describes two
means of in¬‚uencing organizations and political structures: exit and voice. “Exit”
refers to expressing discontent solely through one™s actions, such as leaving a ¬rm,
purchasing an alternative product, abandoning a political party, or even emigrating
from one™s country or state. “Voice” is the use of political protest, criticism, or outcry
to encourage change in ¬rms or governments.52 In cases where exit is not an option,
voice carries the sole burden of providing information on preferences.53 Global
warming is a public goods problem that nations or states cannot resolve through exit

See Order Establishing Ranges of Environmental Cost Values for Certain Pollutants Associated with

Electricity Generation, supra note 33; In the Matter of the Quanti¬cation of Environmental Costs,
supra note 6.
See In the Matter of the Quanti¬cation of Environmental Costs, supra note 5.

See Judith Resnik, Law™s Migration: American Exceptionalism, Silent Dialogues, and Federalism™s

Multiple Ports of Entry, 115 Yale L.J. 1564, 1654 (2006).
See Albert O. Hirschman, Exit, Voice, and Loyalty 30 (1970).

See id. at 34.
Stephanie Stern

strategies. No community or individual can exit from the effects of climate change
because of the global dispersion of carbon dioxide and other greenhouse gases.
Exit from climate change policy is possible but often prohibitively expensive. For
example, individuals can immigrate to a new country or state with stricter regulation
of greenhouse gases but are typically dissuaded from doing so by the steep costs of
relocation. In the same vein, individual states can adopt carbon taxes or mandatory
emissions limitations in the absence of federal regulation. However, most states,
including Minnesota, lack the market power necessary to adopt strict emissions
requirements without placing their state at a competitive disadvantage.
Minnesota™s imperceptible impact on global warming and the harm to in-state
industry from strict substantive regulation explain the substantive weakness and
political tone of the statute.54 Environmental regulation by states with much larger
markets, such as California, may prompt a “trading up” or “race to the top” phe-
nomenon. Firms who must comply with strict regulations in a large market may
voluntarily adopt, or even lobby for, stringent standards in other markets. Firms
behave this way either because production standardization is more cost-effective or
because their prior investment in regulatory compliance gives them an advantage
over competitors.55 A smaller state such as Minnesota lacks the market power to
effect a ratcheting up of standards.56 The Commission™s decision to require cost
valuation for carbon dioxide, but to set costs quite low, is consistent with a model of
state regulation as political voice that stops short of onerous requirements.

2.2. Regulation as Dialogue
The environmental cost valuation legislation and subsequent legal proceedings
reveal how even weak regulation can create discourse and information sharing.57
Barry Rabe has described state climate change regulation as an interactive learning
process where policy diffusion occurs through formal interstate organizations, infor-
mal relationships, or access to state policy documents.58 Regulators may exchange
information through interaction at national meetings or via more informal networks.
Diffusion may also occur absent personal contact when regulators access another

Public goods, such as emissions, “can be consumed by everyone, but . . . there is no escape from

consuming them unless one were to leave the community by which they are provided.” See id. at 101.
See David Vogel, Trading Up: Consumer and Environmental Regulation in a Global Econ-

omy 254“62 (1995).
See, e.g., Gregory Shaffer, Globalization and Social Protection: The Impact of EU and International

Rules in the Ratcheting Up of U.S. Privacy Standards, 25 Yale J. Int™l L. 1, 80“88 (2000) (discussing
how the stricter data privacy requirements of the European Union increased U.S. regulation of data
In the context of international information sharing, Anne-Marie Slaughter has discussed how “net-

works of bureaucrats responding to international crises and planning to prevent future problems
are more ¬‚exible than international institutions and expand the regulatory reach of all participating
nations.” See Anne-Marie Slaughter, The Real New World Order, Foreign Aff. (Sept./Oct. 1997).
See Rabe, supra note 41, at 156“60.
State Action as Political Voice in Climate Change Policy 43

state™s policy materials online or in a publication.59 The Minnesota cost value regu-
lation provides an early example of climate change policy diffusion.60
In the Minnesota case study, multiple channels of communication facilitated
information sharing and regulatory dialogue. State utility regulators have a long-
standing formal organization, the National Association of Regulatory Utility Com-
missioners (NARUC). NARUC disseminates state regulatory information and spon-
sors annual conferences. In addition, the Minnesota administrative law judge had
access to interstate information during the contested case proceeding. There was
no direct communication between the administrative law judge and other judges
or organizations;61 instead the parties to the contested case proceeding promoted
information exchange through memoranda and expert witness testimony describing
various state approaches.
Both the Commission and the administrative law judge considered externality
valuation regulation from other states in crafting the Minnesota rules. When setting
interim values prior to the contested case proceeding, the Commission noted the
importance of looking to regulation in other states, such as California, Nevada, and
Massachusetts.62 The Commission noted that assigning cost value ranges to the
externalities most commonly valued elsewhere “ensures that Minnesota™s interim
values represent the broadest possible consensus concerning which externalities
pose the most signi¬cant risk to the environment and which lend themselves most to
quanti¬cation.”63 Similarly, in the contested case proceeding, the administrative law
judge carefully considered the damage and discount rates applied to carbon dioxide
cost values in states that had already adopted externality valuation approaches.64
The Minnesota cost valuation proceedings also drew international bodies, such
as the Intergovernmental Panel on Climate Change, into the regulatory discourse.65
In the contested case proceeding, industry interests argued that the IPCC™s data
were biased and lacked credibility.66 Judge Klein rejected these claims and relied
on the IPCC data in his recommendations, noting that “the IPCC reports are the
most authoritative sources available for information on climate change issues.”67
The Minnesota Supreme Court similarly validated the IPCC™s credibility when it

See id. at 157.

See generally Hari M. Osofsky, Climate Change Litigation as Pluralist Legal Dialogue?, 26 Stan.

Envtl. L.J. & 43 Stan. J. Int™l L. 181 (2007).
See Klein Interview, supra note 27.

See Order Establishing Interim Environmental Cost Values for Air Emissions Associated with Electric

Generation, supra note 18.
See id. For example, in creating its interim values, the Commission relied heavily on values developed

by Pace University and the Bonneville Power Association.
The Minnesota cost valuation regulation has not had similar in¬‚uence on other states™ utility regu-

lation because of the deregulation movement that began in the mid-1990s. See N. Edward Coulson
et al., The Effect of Electricity Deregulation on State Economies 4, available at http://econ.la.psu.
edu/∼ecoulson/electric.pdf (Mar. 2005).
See supra Section 1.

See Klein Interview, supra note 27.

See In the Matter of the Quanti¬cation of Environmental Costs, supra note 5, at 29.
Stephanie Stern

held that the administrative law judge and the Commission based their decision on
suf¬cient evidence, including careful review of the research reports of the IPCC.
In summary, the Minnesota environmental cost value regulation demonstrates
how interlocking judicial and administrative processes can encourage political voice
and foster regulatory dialogues. Through symbolic regulation, states can express
political opposition to national or international inaction. Such regulation may also
increase information sharing as judges and regulators look to existing state models
and even international organizations.


Why did the cost valuation statute, with its low carbon dioxide values and weak
substantive impact, draw such vigorous opposition from utilities? The reason is that
the statute created multiple layers of risk for the utility industry. The regulations
heightened the risk of adverse regulatory decisions for one type of high-emissions
plant, coal baseload facilities,68 and left open the possibility that the Commission
could substantially increase cost values later in time. More broadly, the regulation
raised the threat of more stringent state greenhouse gas legislation in the future. The
statute also imposed costs by adding another law to the existing multiplicity of state
initiatives. The Minnesota case study illustrates how regulatory threats may drive
litigation, affect voluntary behavior, and increase support for federal legislation.
Because the statute lodged considerable discretion in the Commission, it gen-
erated uncertainty for utilities. During the contested case proceeding, the utilities
were very concerned that the administrative law judge would recommend a high cost
value range for carbon dioxide.69 Steep cost values increase the likelihood that the
Commission will deny permits under Section 216B.243(3), which requires a show-
ing that a nonrenewable facility imposes fewer socioeconomic and environmental
costs than a renewable facility.70 In addition, because the cost value information is
available to the public, high cost values generate negative publicity for utilities.
Following the contested case proceeding, the Commission allayed some of these
fears when it adopted low CO2 cost values. Substantial cost values for carbon dioxide
would have undoubtedly posed a greater threat to utilities, and a stronger incentive
to reduce carbon dioxide emissions. Even with modest CO2 cost values, however, a
risk remained that the Commission could reject applications for high-emissions coal
baseload plants. Coal baseload plants are the most environmentally harmful type

Coal baseload plants provide a steady ¬‚ow of power, regardless of the energy demanded by the grid,

by operating continuously rather than cycling on and off. Since the enactment of the cost valuation
statute, the Commission has not considered an application to site a coal baseload facility in Minnesota.
Currently, the Commission is considering an application to site such a facility in South Dakota, but
because carbon dioxide costs are set at zero within the 200-mile range of Minnesota™s borders, cost
values won™t in¬‚uence this proceeding.
See Klein Interview, supra note 27.

See Minn. Stat. §§ 216B.243(3) & 3(a).
State Action as Political Voice in Climate Change Policy 45

of facility and thus are the most likely to impose signi¬cant aggregate costs despite
low cost values. In addition, because the Commission has the authority to update
the cost value ranges, utilities assumed an ongoing risk of regulatory revision. If the
Commission were to signi¬cantly increase carbon dioxide cost values in the future,
the revised regulation could jeopardize resource planning and permit approval.
Perhaps most importantly, the environmental cost valuation statute and subse-
quent litigation raised the specter of more stringent state regulation in the future.
The recognition by the administrative law judge and the state appellate judge of
climate change as an environmental harm added a gloss of judicial endorsement
to the scienti¬c consensus on global warming. The appellate litigation also estab-
lished that scienti¬c uncertainty does not bar administrative action to address global
warming, a key holding for future climate change regulation in Minnesota. The
battle at the contested case proceeding, with the utility companies offering extensive
expert testimony disputing climate change effects, suggests that the industry saw
the cost value statute as a foundation for future regulation. Cost valuation poses
risks to industry because of its variable methodologies, the potential for expansive
de¬nitions of social costs, and the scienti¬c uncertainty regarding the magnitude
of global warming harms.71 The utilities recognized that legislative, judicial, and
public acceptance of cost valuation disclosure requirements could pave the way for
future regulation that requires industry to pay for environmental externalities.
Minnesota law gives present effect to these regulatory threats by requiring the
Commission to consider future compliance costs. For new nonrenewable facilities,
the Commission must consider “the applicant™s assessment of the risk of environ-
mental costs and regulation on that proposed facility over the expected useful life of
the plant.”72 The Commission must also assess whether utility resource plans “limit
the risk of adverse effects upon the utility and its customers from ¬nancial, social,
and technological factors that the utility cannot control.”73 In a current proceeding
before the Commission, environmental nonpro¬ts are arguing that a utility appli-
cation for a coal-¬red generating facility must account for the costs of complying
with future climate change legislation.74 If future regulatory costs are taken into
account under these standards, utilities may not be able to meet Minnesota™s statu-
tory requirement that a new nonrenewable facility must be less expensive, on the
basis of socioeconomic and environmental costs, than a renewable energy facility.
The environmental cost value statute also increased costs for utilities by adding
another law to the growing patchwork of state regulation across the United States.75

See Interview with James Alders, Regulatory Projects Manager, Xcel Energy, in Minneapolis, MN

(Jan. 30, 2007) (describing cost valuation as the “wrong tool” for addressing the important issue of
global warming).
See Minn. Stat. § 216B.243(3)(12).

See Minn. R. 7843.0500(3)(D) & (E).

See Supplemental Comments of the Izaak Walton League of America “ Midwest Of¬ce, Fresh Energy,

The Union of Concerned Scientists, and the Minnesota Center for Environmental Advocacy to the
Minnesota Public Utilities Commission, No. E-017/RP-05“968 (Jan. 3, 2006).
See Alders Interview, supra note 71.
Stephanie Stern

When states adopt varying climate change measures, businesses are forced to meet
multiple, con¬‚icting requirements.76 The Minnesota administrative law judge was
strongly in¬‚uenced by arguments from environmental groups, both in this litigation
and in a previous case on state acid rain regulation, that state laws play an impor-
tant role in forcing federal action.77 Subnational regulation may trigger regional,
national, or even international regulation as industrial interest groups lobby for
coordinated regulation on more favorable terms or as alternative product producers
search for a larger market.78 This view of the state™s role in climate change regula-
tion now appears prescient. In a notable reversal, several large energy ¬rms began
lobbying Congress in 2006 for a national greenhouse gas cap-and-trade program that
would eliminate the current multiplicity of state mandates.79 The proliferation of
state legislation, including the Minnesota cost value statute, is one factor that has
decreased industry resistance to federal greenhouse gas regulation.80 Other motiva-
tions have included the passage of stricter EU regulations on emissions and strategic
preferences to press for national greenhouse gas legislation during a Republican
In summary, the cost value statute offers a different perspective on seemingly
weak or informational regulation. If part of a state™s goal is to encourage federal
action or voluntary industry efforts, then it may not be necessary to have a strong
statute “ the threat of harsher regulatory action in the future or a looming patchwork
of inconsistent state laws may suf¬ce. For example, since the enactment of the cost
value statute, smaller utility companies in Minnesota have voluntarily increased their
energy from renewable sources. The reason for this appears to be the likelihood of
stricter state or national regulation in the future as well as the cyclical demands for
power, state policies supporting renewables such as windpower, and the advantage
to utilities of incrementally and cost-effectively increasing their renewable energy
in advance.81 The Minnesota case study suggests that the risk of future regulation
affects utilities™ energy generation decisions as they invest in infrastructure in the
shadow of regulatory threats.


The federal government™s reluctance to create national legislation or ratify the Kyoto
Protocol under the Bush administration gave states latitude to create their own cli-
mate change initiatives. States frequently responded by enacting weak or symbolic

In recent years, business executives have made public statements criticizing the “patchwork quilt” of

state climate change regulation. See Rabe, supra note 41, at 139“41.
See Klein Interview, supra note 27.

See Engel & Saleska, supra note 3, at 223“28.

See Steven Mufson & Juliet Eilperin, Energy Firms Come to Terms with Climate Change, Wash.

Post, Nov. 25, 2006, at A01.
See Freese Interview, supra note 26.

See Interview with Carol Casebolt, Counsel for Minnesota Public Utilities Commission, in St. Paul,

MN (Oct. 6, 2006).
State Action as Political Voice in Climate Change Policy 47

regulation that lacks regulatory bite. The dispute over Minnesota™s environmental
cost valuation statute provides the basis for a richer account of the indirect bene¬ts
that accrue from symbolic regulation. The cost value regulation and subsequent
litigation fostered political voice and expressed dissatisfaction with federal and inter-
national climate change policy. The statute altered the regulatory dynamic by cre-
ating a risk of adverse decisions and more stringent legislation in the future. These
regulatory threats encouraged voluntary efforts by utility companies and increased
their support for federal legislation. The cost value regulation also affected regulatory
norms and established global warming as a harm that could be redressed by state
legislative and administrative action.

Litigating Climate Change at the Coal Mine

Lesley K. McAllister—


In Australia, the most prominent climate change cases have involved attempts to stop
greenhouse gas emissions from the burning of coal before that coal is even mined.
Suing under state or national environmental impact assessment laws, Australian envi-
ronmentalists have sought to compel government agencies responsible for approving
coal mining projects to consider the very signi¬cant amounts of greenhouse gases
that will be emitted at the time that the mined coal is burned to generate energy.
With this approach, environmentalists have had some notable success in ensuring
that such “indirect” or “downstream” greenhouse gas emissions are assessed as part
of the decision-making process.
The Australian coal mining cases analyzed in this chapter are harbingers of a
potentially large wave of legal actions that could arise under environmental impact
laws in jurisdictions throughout the world. Environmentalists dissatis¬ed with their
government™s climate change policies are particularly likely to seek remedies through
the judiciary where possible. Yet as they do, they will inevitably confront complex
and dif¬cult issues regarding how and the extent to which a particular project under
consideration can be said to have an impact on the global climate. Whether and
how greenhouse gas emissions should be assessed in the context of environmental
impact studies for particular local projects is a key question for environmental policy
in our new carbon-constrained world.
Australia is a ¬tting place for climate change activists to lodge novel claims about


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