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 2024

• 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 decarbonize 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 authorized 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. At the time of writing, the U.S House is yet to vote on the bill.
• 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 Energy Information Administration (EIA) predicts that in 2024, renewable energy will account for 24% of energy generation, rising to 25% in 2025, due to increases in solar and wind generation.
  
  
• The Department of Energy’s 2023 Offshore Wind Market Report found a 15% increase in the offshore wind energy pipeline from the previous year. The report claims that this is largely due to three new lease areas in the Gulf of Mexico, while also recognizing that the first two commercial offshore wind power plants reached the installation stage last year. The report also highlighted the Inflation Reduction Act 2022 as another reason behind the increase due to the tax incentives it offers for investing in offshore wind energy.
  
  
• 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.
  
  
• There has been a surge in demand for renewable energy investments as of late. According by a report by Mercom Capital Group, 2023 saw a 42% increase in corporate funding into solar energy, which includes venture capital, public market and debt financing. Deals in the solar sector added up to over $34 billion in 2023, the largest amount raised in a decade.
  
  
• In March 2024, the US Department of Energy announced a $750 million investment into 52 projects which aim to lower the cost of clean hydrogen across almost half of the US states. This was introduced as part of President Biden’s Investing in America agenda with the goal of increasing the US’s manufacturing capacity to 14 gigawatts of fuel cells and 10 gigawatts of electrolyzers per year. The latter should roughly equate to an extra 1.3 million tons of clean hydrogen per year.
  
  
• In January 2024, the Montana Supreme Court refused to pause a landmark ruling related to a youth climate impact case. Back in 2020, a group of young plaintiffs filed a lawsuit against the state for allowing the permits of fossil fuel production, even though it worsens health problems and causes long-term climate issues. Under a 1972 amendment to Montana’s constitution, the state must take care of the environment. However, Montana put forward an appeal, claiming that the ruling would have a disruptive effect on regulation. The Supreme Court will not pause the ruling, but Montana representatives have since stated that they will continue to fight the case before the court.
  
  
• Biden recently announced new regulations on tailpipe emissions. Rather than focusing on the sale of any specific vehicles, the plan will be to increase the use of electric vehicles over the next eight years. The EPA estimates that 35% to 65% of sold cars will be electric by 2032, a massive increase from the 2023 statistics (which were under 10%). With transportation being one of the largest sources of planet-warming emissions, Biden plans to eradicate more than seven billion tons of carbon dioxide emissions by 2055, once the rule has become fully implemented.
  
  
• The number of climate change-related cases has doubled since 2015, according to reports. This is due to a new era of climate change litigation, which has seen a shift from projects’ emissions to climate crisis responsibility. Misinformation cases are on the rise and are usually focused on tort law, product liability, consumer protection and racketeering. A case in Hoboken centered around claims that defendants violated New Jersey racketeering laws by casting doubt about climate change. This represents a new era of climate litigation as it covers misinformation alongside the effects and consequences of greenwashing. However, many expect that climate crisis cases will eventually target large financial institutions that continue to invest in fossil fuels, as well as companies producing energy, food and plastic.
  
  
• 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, which you can listen to here.