David A. Dana and Michael Barsa (Northwestern University - School of Law and Northwestern University -- School of Law) have posted A Climate Change Lens on the Dormant Commerce Clause on SSRN. Here is the abstract:
Our goal here is two-fold: first, to show that a climate change lens can make us understand that some apparently discriminatory state treatment of like products is in fact differential treatment of different products, and, second, that there is precedential basis for courts to adopting the climate change lens and hence adopt a more deferential posture toward state climate change initiatives.
We are focused on two kinds of state initiatives. The first is, as in California’s low carbon fuel standard, when a state assigns a cost of carbon to a fuel based on life cycle greenhouse gas emissions, with the near inevitable result that otherwise identical fuels produced far away and out-of-state will have a higher assigned carbon cost than fuels produced in-state. The second is, as in a number of state Renewable Portfolio Standards, where a state requires or incentivizes the satisfaction of the RPS by renewable fuel production in the state rather than through sole reliance on imports. Viewed outside the climate change lens, both these situations involve discrimination against like products. Viewed through a climate change lens, they do not. The climate change lens – and whether courts choose to see through it – matters a great deal.
We view this lens as having three aspects. First, the GHG and hence climate change impact of any product depends on the lifecycle emissions associated with the product. A state’s residents do not confront merely an ideological or philosophical problem in climate change. It is instead a tangible — and for some states existential — problem in terms of the economic and environmental impacts associated with such fundamental health and welfare issues as coastal flooding, drought, wildfires, and invasive species. A court should understand that the lifecycle emissions of a product directly implicates traditional state police power concerns and in that sense should be understood as an integral characteristic of the product. Thus, ethanol from Ohio is not the same product as ethanol from California. California’s use of the Ohio ethanol means more net GHG emissions and a greater likelihood of real, material climate change impacts in California that will have impacts on the material circumstances of the lives of Californians. We believe this part of the climate change lens finds support in, even flows from, the reasoning adopted by the Supreme Court in Massachusetts v. EPA.
Second, energy produced in-state is not necessarily the same or a like product as energy produced elsewhere and then imported because the production itself may have consequences for the environment within the state and hence for the health and welfare of state residents. When a state requires or incentivizes the production of a non-polluting renewable source within a state to meet part of state energy needs, a corresponding amount of dirtier, polluting energy production within the state is much more likely to cease as a consequence. Thus, imported wind power is different, is an unlike product, to locally required or incentivized wind power because a characteristic of the latter, but not the former, is that former it delivers a reduction in local air pollutants and consequent reduction in harms associated with local air pollutants.
Third, local energy is a different product seen from a climate change lens because it is more robust with respect to climate-change-related interferences with transport and transmission — interferences from such things as extreme weather. This part of the climate change lens one might call a climate change adaptation lens.
What would it mean if courts were to adopt the climate change lens? It would not mean that automatically all climate change or other environmentally-oriented state legislation would be upheld where distinctions were made between in-state and out-of-state products. Instead, the lens would free up courts not to impose the near strict scrutiny of "facially discriminatory" state legislation that has dominated much Dormant Commerce Clause jurisprudence. It would allow the courts to engage in a more contextual, and more deferential but not toothless, review — a balancing test that courts routinely use to decide Dormant Commerce Clause cases where discrimination does not amount to simple economic protectionism.