Torquing the levers of international power.

• Published date: 22 March 2016
• Author: Ferrey, Steven
• Date: 22 March 2016

Table of Contents
                 I. Introduction
                 II. Power--Altering the Electric Current
                 A. Climate Change
                 1. The Effect of Carbon
                 2. International Regulation
                 B. Changes in Renewable Technology' and Economics
                 C. Renewable Power Transition, Benefits
                III. Fits: Renewable Energy Regulatory Price Mechanisms
                 in Different International Legal Systems
                 A. The Fit Mechanism
                 B. Internationally
                 1. German and Spain FiTs cause Fits
                 2. Cost Implications
                 C. U.S. FiTs
                 1. Constitutionality
                 2. FITs in California
                 3. Costs
                 IV. The Alternative Regulatory Mechanisms for
                 Sustainable Power: Net Metering and RPS
                 A. Net Metering
                 1. The Legal Mechanism
                 2. Costs
                 3. Net Metering Energy Storage--The Missing Link for
                 Power
                 a. The Physics of Power Intermittency, Cycling and
                 Grid Stability
                 b. International Grid Stability Issues
                 B. Renewable Portfolio Standards (RPS)
                 1. Creation of 'Virtual' Credits
                 2. Navigating Legal Barriers to Leakage in the U.S
                 3. Costs
                 a. U.S. Costs
                 b. International Costs
                 V. How International Levers of Power must be Activated
                 A. One Regulatory Size Does Not Fit All
                 B. Developing Policy for Developing Nations
                 C. The Limits of Current International Regulatory Reach
                

I. INTRODUCTION

The world is now at its climate's "tipping point" at a precipice to redress global warming; after which our ability to halt a climate temperature rise below 2 degrees Centigrade (3.4 degrees Fahrenheit) is deemed unreachable. (1) How to arrest the fast-accelerating accumulation of long-term carbon in the atmosphere is the legal and environmental challenge of the 21st century. It involves intelligent implementation of legal mechanisms, not technical fixes. Governments must quickly torque the levers of international power, but U.S. courts are finding some of these levers unconstitutional.

International climate agreements have operated poorly to date: The 1997 Kyoto Protocol concluded its operative phase in 2012, and three major and necessary covered world powers--Russia, Japan and New Zealand--then refused to agree to any subsequent obligations. (2) The Paris COP-21 continued the two most criticized elements of the Kyoto Protocol--placing no definitive obligations for carbon reduction on any nation, and being totally unenforceable. If the levers of international power are not grasped immediately and manipulated carefully, experts, including the White House Science Advisor and NASA's lead climatologist, state that the battle against manageable climate change is forfeited. (3)

The International Panel on Climate Change 2014 report concludes that in order to maintain world warming below 2°C, there must be a 40-70% reduction of greenhouse gases ("GHGs") emission from 2010 levels by 2050. (4) Not only was a solution nowhere in place under the Kyoto international climate protocols, but on the contrary, world carbon emissions each year are increasing rapidly rather than diminishing. (5) Global GHG emissions increased by an average of 2.2% per year from 2000 to 2010, nearly double the 1.3% per year growth during the preceding 30 years. (6)

To address climate change in the narrow window of time before the battle for no increase more than 2° C is forfeited, the electric power sectors of the 200 world nations are the critical focus for effectively controlling carbon emissions. (7) The technology exists to dramatically mitigate carbon emissions. (8) However, all world nations must engage in a fundamental shift from the carbon-intensive methods by which electric power is produced. (9) The levers of (electric) power are the critical controls that much be manipulated and applied.

The most used lever, internationally and in the European Union, to promote quick implementation of renewable power, feed-in tariffs ("FiTs"), has been declared fundamentally unconstitutional when mandated by U.S. states. (10) When misused, states can be ordered to pay the challengers' attorneys' fees. (11) Even though FiTs are legal in European Union countries at the national level, the record demonstrates flawed and uneconomic use of these mechanisms. (12) The program cost imposed on utility rate payers has caused backlash among stakeholders and significant financial hemorrhage in Germany, Italy and Spain, the primary countries aggressively employing FiTs. (13)

Renewable Portfolio Standards ("RPS"), the alternative international lever used by 29 U.S. states to maneuver sustainable power development, (14) creates a separate tradable "virtual" credit earned by independent renewable energy producers, which utilities must purchase at a substantial price. (15) When maneuvered in a discriminatory fashion, the RPS levers have resulted in successful constitutional attack on U.S. state RPS programs. (16) RPS programs are now gaining popularity internationally; (17) their costs, as with net metering, are imposed on utility customers. (18)

FiTs, net metering, and RPS are the primary legal levers in place to maneuver an international transition before the critical climate "tipping point" is exceeded in the next few years. Each lever operates differently, exerts distinct economic impacts, and now confronts different legal barriers in different national systems of law. This Article identifies, compares, contrasts, and torques the levers of international power. Sustainable development and continuation of world civilization in the manner we know it depend on effective and intelligent regulatory use of these comparative levers of power, and creation of legal space to do so.

Part II of this Article explores why electric power forms the critical crucible in which climate, policy and law now mix. Part III examines the legal implications of feed-in tariffs, which European and other world nations employ to promote renewable electric power. Comparing U.S. to international experience, Part III then analyzes why these same techniques have been held unconstitutional in the U.S. when implemented by California and other states. And even though legal in Europe, Part III examines the financial loss that has resulted from Germany's, Italy's, and Spain's misaligned positioning of this lever of power.

Part IV examines the alternative levers employed in the majority of U.S. states to promote renewable energy deployment: renewable portfolio standards and net metering. These are legal if carefully designed. However, the specific programs in several states have been found by federal Circuit Courts to violate the Constitution. A series of recent legal challenges has resulted in states having to legally remake their programs. Part IV also surveys where and how these levers of power are implemented internationally.

Warming molecules emitted anywhere on the Earth warm the entire Earth universally. The international legal challenge confronting the world nations that attended the Paris Conference of Parties in late 2015 was to correctly deploy these levers of power before we exceed scientists' declared "tipping point" of no known return. One size will not fit all nations. Part V strategically manipulates these key international levers of power for the developed and developing countries of the world.

II. Power--Altering the Electric Current

A. Climate Change

1. The Effect of Carbon

Climate change is a significant global issue; in some ways, perhaps, the global issue of the 21st century at which the world of nations must either succeed quickly or fail. After 800,000 years of GHG levels hovering between 180 and 280 parts per million (ppm) in the atmosphere, GHG levels have now precipitously increased to 400 ppm. (19) See infra Figure 1. And the earth is warming and the sea level rising. (20)

GHG annual emissions increased about 70% between 1970 and 2004, with the combustion of fossil fuels accounting for 70% of GHG emissions, the subcategory of electric power generation responsible for 40% of C[O.sub.2] emissions, and the further subcategory of...