New York First State to Curb Footprint of Cryptocurrencies
Author
Linda K. Breggin - Environmental Law Institute
Environmental Law Institute
Current Issue
March-April 2023
Issue
2
Linda Breggin

New York is the first state out of the gate in the race to take regulatory action to address the climate and other environmental impacts of cryptocurrency transactions. The narrowly crafted two-year moratorium applies to permits for facilities that use carbon-based fuel to generate behind-the-meter energy for certain types of crypto operations.

Specifically, the law applies to operations that use PoW, the “proof of work” protocol, to “mine” or create new cryptocurrencies and add transactions to the immutable electronic ledger known as the blockchain. The law finds that crypto mining could interfere with state efforts to achieve climate mitigation goals, protect natural resources, and control pollution.

PoW is a widely used, highly energy-intensive consensus protocol designed to protect against cybersecurity breaches in decentralized peer-to-peer cryptocurrency networks. Transactions (e.g., “A” buys a car from “B” for one bitcoin) are broadcast to the network nodes, computers that check transactions for conformity with network rules—for example, confirming that the inputs have not already been spent.

Nodes then work for the right to add new transactions to the blockchain and be able to win transaction fees and new cryptocurrency. The work performed entails using tremendous computational power to generate strings of characters known as “hashes” until, after a vast number of attempts, a node identifies the correct numbers—those that match the target hash for the block. The average number of calculations required to solve the equation increases as computing power is added to the network. As ELI’s David Rejeski explains: “Solving the puzzle requires guessing, over and over again, so the more computer power you can throw at the puzzle, the better, and that can lead to enormous power consumption.”

This remarkably energy-intensive process has resulted in cryptocurrencies’ global energy consumption equaling that of entire countries such as Argentina or the Netherlands. And just one cryptocurrency, Bitcoin, is estimated to account for between 60 to 77 percent of global crypto-asset electricity usage.

In the United States, crypto asset operations consume an amount of energy comparable to that used by all home computers. A White House report warns that the industry’s energy usage potentially “could hinder broader efforts to achieve net-zero carbon pollution consistent with U.S. climate commitments and goals.”

Although New York’s moratorium is groundbreaking in the United States, entire countries such as China have banned crypto mining operations, citing the need to meet carbon reduction goals. And several Canadian provinces have restricted mining operations, in part to preserve electricity for other purposes such as powering electric vehicles and household heat pumps.

Crypto mining operations contribute to air pollution when powered by fossil fuels. They also produce electronic waste as machines wear out and, in some cases, similar to the handling of much other electronic waste, may be shipped for disposal to low-income communities in other countries. Operations that use water to cool their machines can contribute to thermal pollution in waterbodies. Noise pollution effects are also front and center in communities that host mining operations, where some liken the sound to a jet engine running night and day.

In some communities, crypto mining is also affecting energy bills and service reliability. For example, costs to customers can increase significantly if a utility must buy additional, more costly energy to meet mining operations’ outsized demand—a problem that occurred in Plattsburgh, New York, which became the first U.S. city to halt mining operations.

In response to this panoply of concerns, the Blockchain Industry Association maintains that “the limited scope of the environment impact of PoW blockchains is ultimately outweighed by the enormous benefits that crypto can bring to society.” The association, however, does call on crypto miners “to push adoption of renewables forward” in the United States.

Fortunately, PoW is not the only mechanism for validating cryptocurrency transactions, and far less energy-intensive protocols may be gaining traction. For example, PoS, the Proof of Stake protocol, uses “validators” who provide collateral for the opportunity to be selected to add new transactions to the blockchain in lieu of requiring miners to perform computational work. The association points out that PoS can achieve “more that 99 percent reduction in energy use.”

Although federal, state, and local governments are engaged in a likely protracted process of determining how best to regulate the environmental and other impacts of crypto mining, the New York law is a first step and can serve as a model moving forward.

New York First State to Curb Footprint of Cryptocurrencies.

State Right to Repair Legislation Gains Momentum Across Nation
Author
Linda K. Breggin - Environmental Law Institute
Environmental Law Institute
Current Issue
January-February 2023
Issue
1
Linda K. Breggin headshot

State legislatures around the country are considering—and some have enacted—right to repair legislation. The bills take a variety of forms but all aim to address growing barriers to consumers, businesses, and even the military from repairing the products they purchase.

Colorado’s new law makes it easier for consumers and independent repair providers to fix motorized wheelchairs. New York’s Digital Fair Repair Act (awaiting the governor’s signature at this writing) would do the same for consumer electronics. These new right to repair laws are only the tip of the iceberg—the U.S. Public Interest Research Group reports that legislation was introduced in 27 states in the first few months of 2021 alone.

And, in 2020, Massachusetts voters overwhelmingly approved expanding the state’s 2012 landmark Motor Vehicle Owners’ Right to Repair Act to require manufacturers to make telematic data—wirelessly transmitted information generated during vehicle operation—available to independent repair providers. Manufacturers have filed a lawsuit challenging the requirements.

Also on the books are repair-related laws in Rhode Island, Indiana, and California that impose varying requirements on product manufacturers to provide service information and parts.

Repair restrictions can be driven by profit, complex technologies, or intellectual property rights, but the result is the same: owners and independent repair providers increasingly lack the specialized tools, parts, information, and access to diagnostic software needed to repair their products effectively. Planned obsolescence also limits the ability to repair.

State laws are often based on the Repair Association’s model legislation and typically require that manufacturers make available to owners and independent repair providers the documentation, parts, and tools needed for diagnosis, maintenance, and repair. In addition, manufacturers may be required to provide special documentation and parts for disabling and resetting electronic security locks.

Removing repair restrictions could lower the cost of repair and create jobs, but it also could be a sustainability game changer—reducing the environmental impacts of manufacturing new products and disposing of unrepairable ones. For example, Greenpeace estimates over 70 percent of the carbon footprint of personal computing devices occurs during manufacturing.

Repair restrictions not only thwart consumers, but businesses as well. For example, farmers have bemoaned the inability to fix their own equipment. As iFixit’s Elizabeth Chamberlain explains, one manufacturer “restricts a lot of repairs to their dealerships,” which are limited in number. As a result, “farmers around the country report waiting weeks” for repairs “while their crops rot in the fields.”

Right to repair is also taking hold internationally, including in France, which mandates a repairability index for a wide range of products, including cell phones. The ratings are based on criteria such as the availability of parts.

Although an academic study cautions that manufacturers may raise prices to mitigate lost profits, opposition to legislation primarily comes from manufacturers and their associations. Conservative legislators and think tanks chime in as well. Intellectual property rights are a central concern, in addition to cybersecurity risks and potential injuries from repairing or using improperly repaired products.

For example, Competitive Enterprise Institute’s Alec Reinauer warns that requiring manufacturers to “distribute sensitive information regarding embedded software and security functions” may expose consumers to “greater cybersecurity risks.” And American Legislative Exchange Council’s Bartlett Cleland argues that forcing “innovators to hand over, ‘free of charge,’” certain information to independent repair providers “would forcibly divest companies of significant value.”

But scholar Aaron Perzanowski contends that although intellectual property rights claims can be used as “leverage to threaten consumers and independent repair providers with potentially ruinous liability and legal fees,” such claims are “highly contestable in many instances, if not altogether groundless.” Recent laws address at least some manufacturers’ concerns. For example, Colorado law limits their liability for “faulty or otherwise improper repairs” performed by others.

The federal government is also taking action. For example, right to repair is addressed in a 2021 executive order and the Federal Trade Commission recently announced settlements with manufacturers that unlawfully voided product warranties for consumers who use independent repair providers.

As the New York Times editorial board has pointed out, national legislation may not be needed, because a “state law could prove a dam buster,” since parts and repair information can be freely exchanged in interstate commerce.

State Right to Repair Legislation Gains Momentum Across Nation

The Debate: Chesapeake Bay Getting Healthier But New Gains Face Funding Cuts, Policy Challenges
Author
Nick DiPasquale - U.S. Environmental Protection Agency Chesapeake Bay Program (2011-17)
Dena Leibman - Chesapeake Alliance for Sustainable Agriculture
Ben Grumbles - Maryland Department of the Environment
Cindy Adams Dunn - Pa. Department of Conservation and Natural Resources
Verna Harrison - Verna Harrison, LLC
Jon Mueller - Chesapeake Bay Foundation
U.S. Environmental Protection Agency Chesapeake Bay Program (2011-17)
Chesapeake Alliance for Sustainable Agriculture
Maryland Department of the Environment
Pa. Department of Conservation and Natural Resources
Verna Harrison, LLC
Chesapeake Bay Foundation
Current Issue
March-April 2018
Issue
2
The Debate: Chesapeake Bay Getting Healthier But New Gains Face Funding Cuts, Po

The Environmental Protection Agency’s Chesapeake Bay Program announced in December that almost 40 percent of the bay meets standards for oxygen, water clarity, and algae growth. Progress toward restoration is impressive, but getting the remaining 60 percent of the waters into alignment will be difficult.

In 2010, after years of halting restoration efforts, EPA established enforceable pollution limits for the Chesapeake — known as the Total Maximum Daily Load — covering nitrogen, phosphorus, and sediment pollution. The six bay states — Delaware, Maryland, New York, Pennsylvania, Virginia, and West Virginia — and the District of Columbia later released their plans to meet those limits by 2025. This ambitious Clean Water Blueprint survived a legal challenge, and in recent years federal, state, and local governments have pressed ahead with their plans to achieve pollution reductions. 

As we reach the midway point for the 2025 deadline, it is clear that progress is being made across the watershed. Water quality and clarity have improved, the acreage of underwater bay grasses has increased, crab harvests are rebounding, and efforts to restore oyster populations are accelerating. Just as important, an outdoor recreational economy (exclusive of recreational fishing) is valued at as much as a quarter billion dollars per year and is growing. 

But despite recent progress, most notably in reducing pollution from wastewater treatment plants, significant challenges remain across the watershed in meeting nonpoint source pollution reductions from agriculture and urban and suburban runoff whose controls are more difficult. 

This Debate in Print occurs as there is a standoff in Washington about future funding for bay restoration, a minor item in the struggle to pass a measure funding the government. The Trump administration has proposed dramatic funding cuts for the Chesapeake Bay Program and other federal initiatives that support restoration efforts. The House is considering less severe cuts, but so far the Senate recommends full funding. Without adequate federal funding, the initiative to save the bay is in jeopardy. 

Recognizing the significant progress that has been made and the important challenges that remain, the Forum asks our panel for their views on what must happen in the years ahead if the goal of restoring the Chesapeake is to succeed.

THE DEBATE ❧ EPA’s Chesapeake Bay Program has produced impressive results. The bay states’ ambitious Clean Water Blueprint survived a legal challenge, and federal, state, and local governments have achieved impressive pollution reductions. But as the states ramp up their efforts, there is a standoff in Washington about funding.

Justice Gorsuch Faces Case Where Neither Choice Entirely Satisfactory
Author
Richard Lazarus - Harvard University
Harvard University
Current Issue
January-February 2018
Issue
1
Richard Lazarus

Before joining the Supreme Court, Neil Gorsuch made clear that he, like the justice he replaced, Antonin Scalia, believes in strict adherence to statutory text. According to Gorsuch, a judge’s personal policy preferences should play no role in statutory interpretation. And, going even further than Scalia, nominee Gorsuch admonished that judicial deference to agency construction of ambiguous statutory language under Chevron v. Natural Resources Defense Council amounts to an unconstitutional violation of separation of powers. An environmental case now pending before the Court on petition for a writ of certiorari, however, may well put Justice Gorsuch’s stated commitment to statutory text to the test.

At issue in the petition pending before the Court in New York vs. EPA is the validity of the agency’s so-called Water Transfer Rule, which provides that a movement from one navigable waterbody to an entirely distinct waterbody does not amount to an “addition of any pollutant to navigable waters” requiring a Clean Water Act Section 402 permit. Under this reading, EPA readily acknowledges, a person can discharge highly polluted water from one water body into a highly pristine separate water body without the need for a Section 402 permit.

EPA statutory grounding for the validity of the WTR is the Clean Water Act’s phrasing of the definition of “discharge of a pollutant” to mean “any addition of any pollutant to navigable waters.” EPA contends that the term “navigable waters” in this context treats all navigable waters in the nation as a “unitary” concept such that conveyances of pollutants from one navigable waterbody to another do not “add” pollutants to navigable waters overall. The pollutants are merely redistributed within the nation’s navigable waters.

The origins of EPA’s unitary waters theory can be found in an amicus brief filed by the solicitor general in the Supreme Court’s South Florida Water Management District vs. Miccosukee Tribe of Indians, decided in 2004. Relying on the notion that the Clean Water Act treated navigable waters as a unitary concept, the amicus brief argued for the first time that point sources that transfer water from one navigable waterbody to another distinct navigable waterbody do not require Section 402 permits even though the “point source . . . might be described as the ‘cause-in-fact’ of the release of pollutants into navigable waters.”

The reason for the solicitor general’s surprising filing at the time was clear. The federal government was concerned that a different rule might subject to Clean Water Act permitting requirements the routine transfers of water by federal agencies such as the Bureau of Reclamation or the U.S. Army Corps of Engineers between distinct bodies of navigable water. In this respect, the primary institutional motivation behind the interpretation appeared to derive from the concerns of those agencies rather than from EPA.

Both during the Miccosukee oral argument and in the opinion she wrote for the Court in the case, Justice Sandra Day O’Connor left little doubt of her skepticism of the validity of the solicitor general’s view. At oral argument, she described it as “an extreme position” that needed “a fall-back position,” generating courtroom laughter.

And in the opinion she went to great lengths to explain the many ways that such an interpretation could not be squared with the structure and operation of the Clean Water Act. The opinion emphasized in particular how the unitary waters theory conflicted with those parts of the statute that seek to protect “individual waterbodies as well as ‘waters of the United States’ as a whole.” The Court, however, declined ultimately to decide the issue because it had not been raised in or decided by the lower courts.

Notwithstanding the Miccosukee Court’s clear skepticism, EPA subsequently embraced the solicitor general’s unitary waters theory in a rulemaking that established the WTR, which exempts from Clean Water Act Section 402 permit requirements transfers of water (even if polluted) between distinct waterbodies. And, relying very heavily on Chevron deference, two federal courts of appeals have rejected challenges to EPA’s rule that argued that the rule cannot be squared with the act’s plain meaning and clear focus on individual waterbodies.

The state of New York’s pending petition in New York v. EPA asks the Supreme Court to review the issue. Should Gorsuch adhere to his view of both the conclusive role of statutory text and the impropriety of Chevron deference in judicial review of agency interpretation, there is good reason to expect he would support the WTR’s challengers on the merits. Yet, hailing from Colorado, where such water transfers are routine, the justice’s personal policy preferences are likely sympathetic to EPA’s contrary position.

How Justice Gorsuch votes on New York’s petition may well provide an early test of the strength of the justice’s stated convictions.

Justice Gorsuch faces a case where neither choice is entirely satisfactory.

Mid-Atlantic States Join Forces to Advance Offshore Wind Energy
June 2013

(Washington, DC) — In coordination with the Environmental Law Institute (ELI), the Mid-Atlantic Regional Council on the Ocean (MARCO) has released A Guide to State Management of Offshore Wind Energy in the Mid-Atlantic Region. The guide provides an overview of the issues affecting offshore wind energy projects in the region and identifies the basic elements of state authority to address resource concerns and competing uses such as navigation and fishing.

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