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

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 2019

  • In a drastic departure from the Obama administration’s Clean Power Plan, President Donald Trump made the controversial decision to withdraw from the Paris Agreement in June 2017. By December climate change had been removed from the NSS (national security strategy) list of global threats; the earliest the US could formally withdraw from the Paris Agreement is November 2020.
  • Multiple lawsuits have been filed to challenge the Trump administration's reversal of regulatory efforts to tackle climate change. Conversely, conservative NGOs and other institutions have brought suits to support climate change deregulation.
  • The renewables market has continued to grow year-on-year despite policy changes, with renewables becoming a “preferred” energy source, according to Deloitte. Solar energy is seen as the leader of the pack thanks to steadily decreasing solar installation costs, which have made it a highly competitive area of the market. Automation is also cutting time and costs for production and operations.
  • Various states including California, Illinois and New York are making efforts to decarbonize electricity, moving away from fossil fuels. California joined Hawaii in legislatively setting a goal for a carbon-free electricity system by 2045.
  • In January 2018 New York City officials announced that it was to divest $5 billion of fossil fuel-linked money from the city's pension fund. Mayor Bill de Blasio also announced that the city will be suing several of the world’s biggest oil and gas companies for their role in global warming.
  • The improvement in electric vehicles in recent years is likely to make them an increasingly prominent part of climate change discourse and action. Global sales of new electric vehicles passed a million units for the first time last year.
  • In early 2018 the FERC (Federal Energy Regulatory Commission) announced that it would let energy storage enter into wholesale markets and the bulk power grid, which it is hoped will reduce consumer costs and allow energy to come from cleaner sources. As such, the number and size of battery storage projects is expected to continue to grow.
  • Global corporations such as Apple and Amazon are becoming increasingly interested in using and promoting renewable energy. They are now entering into contracts to purchase energy directly from renewable energy producers, thereby helping these producers to operate more profitably.
  • Numerous private equity funds have also taken an interest in the renewable energy sector, with a number of funds putting more substantial amounts of capital into larger portfolios of renewable assets.
  • Although it is yet to fully develop its presence on the market, China is seen as an emerging player in the world of renewable energy: the Institute for Energy Economics and Financial Analysis estimates that China is on track to lead global investment in the sector in years to come. According to Deloitte, China recorded the largest solar and wind growth in 2017.