Practice Areas: Climate Change

Carbon Policy

Growing interdependencies between government regulation, markets, energy policy, and finance are accelerating the need to understand how carbon regulations and putting a price on carbon will impact core business operations. The carbon markets grew in value generally to an estimated US$70 billion in 2007, and buying and selling emission rights is expected to top US$70 billion by the end of next year. Long-term, analysts are projecting a carbon commodity market of US$3 trillion by 2050. An integrated and forward-leaning approach to carbon pricing – through cap-and-trade and/or carbon tax frameworks – will serve as a key competitive differentiator in the coming decades.

The potential to profit from this market – through the development of internal and external low carbon energy efficient programs – is large. However, depending on the design and interaction of pricing regimes, the potential for increased costs and liability exposure is significant. Policy insight is critical to recognizing and adapting to these risks. For example, factoring in regional asymmetry in carbon prices is imperative when analyzing operating cost variables. Reaching beyond the avoidance of risks and liabilities is perhaps even more essential, however, to maintaining a competitive advantage. In particular, innovative ways to finance investments through the carbon markets intersect with an ability to harness this emerging framework.

Insight into the policies and legal frameworks will allow business to grasp opportunities and mitigate risks – a key competitive advantage in a carbon-constrained world.

Our services:

• draft, structure, and negotiate state, national, and global Emission Reduction Purchasing  Agreements
• provide legal expertise on federal and regional cap-and-trade regimes (Western Initiative, Midwestern Greenhouse Gas Reduction Accord, Regional Greenhouse Gas Initiative) and greenhouse gas emissions registration requirements and opportunities;
• provide legal parameters for internal and external carbon due diligence across the operational value-chain;
• advise on legal aspects of Kyoto Protocol reductions, including Certified Emission Reductions (CERs), Emission Reduction Units (ERUs) and Verified Emission Reductions (VERs);
• advise clients on their participation in the Chicago Climate Exchange and other voluntary initiatives;
• develop and implement regulatory strategies to influence state and federal climate change policy through assisting companies in developing positions on policy design issues;
• integrate clients’ climate policies into the global framework of climate regimes; and
• advise clients on the obligations, risks and opportunities associated with carbon and climate change disclosure and on how to successfully transition to Climate Forward Corporate Governance.