Climate change and renewable energy

In a nutshell

Energy

Climate change attorneys advise on four core aspects of law. Transactional advice is the most common aspect, and mainly involves negotiating carbon-related deals (such as carbon credits or projects to reduce carbon emissions, most of which have international dimensions). Next up is litigation; it involves challenging climate change rules, regulations and laws, as well as defining the boundaries of the law. Regulatory advice is a growing area, due to the increasing number of climate change regulations being issued. Companies are therefore relying on lawyers more than ever to ensure that their activities are compliant with the latest regulations. Failure to comply leads us to the final aspect, enforcement, which is also rising in prominence as the body of regulations expands.

"You have a role to play in solving some of the world's most important problems. A lot of the industry focuses on making sure developing parts of the country and the world provide people with reliable and affordable energy in as clean a way as possible." – Roger Martella

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What lawyers do

  • Climate change and renewable energy practices attract a broad client base, which can be split into three categories: environmental groups, government groups and corporations.
  • Companies seek advice on reducing their carbon footprint, as well as broader issues such as employment, IP and finance. As a result, it's also important to have a good working knowledge of other legal areas, such as general corporate law, M&A and tax.
  • What lawyers focus on depends on their location. Washington, DC, for example, is at the heart of federal climate change regulation, so lawyers here are most likely to be involved in policy drafting. A practitioner in Texas, on the other hand, is more likely to spend their time advising fossil fuel companies on regulatory compliance. Renewable energy work, meanwhile, is mostly concentrated around large cities such as New York, DC, Chicago and San Francisco.
  • Geographical connections also play a part in determining the scope of matters. For example, a lawyer based in California is more likely to be working with Asia on international deals than one in New York. Head to a regional firm if the scope you're after is smaller and more localized: firms in cities like Oklahoma City attract energy work but aren't known as 'practice area hubs' in the same way San Francisco and DC are.
  • Associates tend to do a lot of hands-on work to gain expertise in areas that are still developing. Roger Martella, former environment practice head at Sidley Austin and climate change expert, explains: “This is a rapidly growing practice and constantly evolving, so associates are becoming experts in areas that will become more mainstream within a few years.”

 

 

Realities of the job

  • Climate change is a niche area, so it's unlikely that you'll be able to specialize full-time in it. Many lawyers specialize in a broader practice area – such as energy, environment, international law or litigation – and then work on climate change matters as part of their portfolio.
  • Advising environmental organizations and government bodies may be your ultimate goal in this area, but the reality is that most of the work involves assisting corporations with climate change compliance.
  • As the body of climate change law is comparatively small, knowledge can be built up quite quickly. However, it is also important to have some technical knowledge, so science and engineering degrees can be particularly useful in this respect.
  • In terms of approach, being able to adapt to a client's style is important, as Todd Alexander of Norton Rose Fulbright explains: “Some clients like a harsh, direct and pushy person, while others prefer someone conciliatory and facilitating. It depends on the client and situation.”
  • One of the most rewarding aspects of the work is that it affects a large number of people, says Martella: “You have a role to play in solving some the world's most important problems. A lot of the industry focuses on making sure developing parts of the world provide people with reliable and affordable energy in as clean a form as possible. There is a social justice aspect to this.”
  • On the transactional side, no two deals are the same, as Alexander reveals: “It is hard to create standardization because every deal is so unique. It is interesting and challenging, as you have no form to follow on a daily basis; each deal requires separate analysis and negotiation, so intellectually it is very rewarding as you are constantly challenged and learning.”
  • This strand of work often involves international deals and a lot of travel. Although that may sound glamorous, the reality is that extensive travel is exhausting, and you may need to get used to working while jet lagged. As is the nature of transactional work, schedules can be unpredictable and demanding, so Alexander tells us that it's important to have a passion for the area: “If you try to force yourself to go into this and you are not happy to make the sacrifices needed it won't be worth it. You have to find what the right balance is for you.”
  • Climate change is also a highly contentious practice area, as new regulations are likely to be challenged both by those who think they go too far and by those who don't think they go far enough. Roger Martella explains that as a litigator in the field it's important to detach oneself emotionally from the issues at hand: “This is perhaps one of the most emotional and passionate areas of the law. On both sides people have very strong views which create clashes outside of the courtroom. The impact goes beyond just legal issues; there is a strong nexus between climate change law and controversies.” A litigator must act in their client's interest, even if that goes against their personal views or ethics.

 

Current issues

June 2021

  • President Joe Biden promises a radically different approach to tackling climate change than that of his predecessor. The US re-joined the Paris Agreement in 2021 (after Trump made the controversial decision to withdraw in 2017) and committed to reducing its emissions to net zero by 2050. “We need to be bold,” Biden urged in January as he signed a whole slate of executive orders from halting oil and gas drilling on federal land to cancelling the Keystone XL pipeline. Coupling these commitments is Biden’s $2 trillion clean energy investment and aim to fully decarbonise the power sector by 2035.
  • In 2020, renewables overtook coal as a source of electricity generation for 153 days compared with 39 the previous year, according to Deloitte’s renewable energy outlook report. 2021 looks set to be another strong year for the alternative energy market, with Biden’s administration likely to mandate the wide deployment of renewables in line with his bold climate ambitions.
  • The commercial viability of renewable technology continues to grow. Solar energy is steadily becoming widely attainable for mass-market use and installation, with offshore wind and green hydrogen technology expected to follow suit. Wood Mackenzie and the Solar Energy Industries Association found that by the end of 2020, the US had added 19 GW of total solar power. Battery-storage capacity reportedly doubled in the third quarter of 2020 from the second in the US.
  • Globally, the European Commission has sought to double-down on Biden’s commitments and has proposed a ‘transatlantic green trade agenda’ between the US and EU. Ursula von der Leyen, President of the Commission, said: “It is time to reconnect with a new agenda for transatlantic and global cooperation for the world of today.” Among the proposals under discussion are a joint trade and climate initiative, increased ocean protections, a global regulatory framework for sustainable finance, and a green technology alliance.
  • The likelihood of attaining the aspirations set out in the Paris Agreement will hinge on China’s efforts, with the Global Carbon Project estimating that the superpower was responsible for 28% of global greenhouse gas emissions in 2018. The country made its first long-term climate target in September when President Xi Jinping announced that China will be carbon neutral by 2060. The Institute for Energy Economics and Financial Analysis predicts that China will lead global investment in the renewables sector in years to come. In its most recent five-year plan, it pledged to reduce CO2 by 18% and increase its renewables share to 20% by 2025.
  • The private equity space has sharpened its climate focus in recent years, with the American Investment Council reporting that private equity companies had invested more than $11 billion into renewable energy projects in 2020. Blackstone set out plans to cut emissions by 15% within its first three years of investment in a new portfolio company or asset, while other heavyweights such as Carlyle and Apollo are throwing their weight behind sustainable energy projects.
  • Law students across the US and beyond are increasingly alive to the role law firms themselves play within the climate conversation. Law Students for Climate Accountability (LSCA) produced a first-of-its-kind report in 2020 detailing the environmental impact of the types of cases law firms work on. Its report cross references the litigious, transactional, and lobbying work of various AmLaw 100 firms and bestows a score based on harm to the climate. We caught up with two members of the organization this year, which you can listen to here.