Climate change and renewable energy

In a nutshell

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

 

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 2023

• When the US re-joined the Paris Agreement in 2021, Biden committed to reducing its emissions to net zero by 2050. Coupling these commitments is Biden’s $2 trillion clean energy investment and aim to fully decarbonise the power sector by 2035. However, it’s unlikely to be plain sailing. In February 2022, the Supreme Court heard the Environmental Protection Agency (EPA) may have insufficient authority to issue broad regulations, potentially disrupting the Biden administration’s plans to halve greenhouse emissions by 2030. It’s likely that consumer protections, workplace safety, and public health may also be affected. In June 2022, the US Supreme Court ruled that any regulation, unless authorised by Congress, is invalid.
• On August 12^th 2022, the Inflation Reduction Act of 2022 was passed, which approves the use of approximately $370 billion to address climate change, including advancing green technology and reducing emissions. The bill underlines the use of $161 billion in new tax credits to promote clean electricity, as well as $80 billion dedicated to furthering households’ energy efficiency and promoting the use of electric vehicles.
• Earlier this year, Rep. Cathy McMorris introduced the Protecting America’s Strategic Petroleum Reserve from China Act. According to house documents, the aim of the bill was to stop the export of oil from petroleum reserves to China. Further, senators have proposed the addition of countries like Iran and Russia to the bill.
•  In December 2022, Biden’s administration expanded the definition of waterways to include streams and wetlands. As a result, these waterways fall under the protection of the Clean Water Act.
• The Energy Information Administration (EIA) predicts that in 2023, renewable energy will account for 24% of energy generation, rising to 26% in 2024, due to increases in solar and wind generation.
• 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. The Department of Energy’s 2022 Offshore Wind Market Report found a 13.5% increase in the offshore wind pipeline from the previous year. This has been facilitated by the Biden-Harris Administration’s continued effort to increase areas in the US that can be used for offshore wind development.
• 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 around 28% of global greenhouse gas emissions. The country made its first long-term climate target in September2021 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.
• There has been a surge in demand for renewable energy investments as of late. According to research by Mercom Capital Group,2021 saw the highest number of private investments in renewable energy since the Great Recession of 2008. Venture capital and private equity companies invested $4.5 billion in US solar – nearly triple the funding compared to the previous year.
• Following President Biden’s ban on Russian oil and gas imports, there are questions around where replacement energy will come from to supply demands amid record US gas prices. Some senators have suggested expanding domestic oil production, while others have proposed investments in clean energy. The likelihood of an increase in clean energy investments is still unclear, but if national reliance on renewable energy sources was to increase, policies would need to be amended.
• 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 last year, which you can listen to here.