LUCIANO BUTTI-BEATRICE TONIOLO
1. Introduction.
2. The ECJ point of view: proportionality as a key tool to balance precaution and its costs.
3. The US Supreme Court 2015 decision on the costs of EPA’s order.
4. The UK Supreme Court 2015 decision on the application of ClientEarth (appellant) v. Secretary of State for the En- vironment, Food and Rural Affairs (respondent).
5. Evolution in the Ital- ian Constitutional Court position. From 1990 to 2013.
6. The ‘Urgenda’ case in The Netherlands.
7. Conclusions.
7.1. The emerging criterion of a minimum standard of protection of ‘public interest’ which must be guar- anteed, regardless of costs.
7.2. Legal and policy reasons for such a crite- rion.
7.3. How to identify such a minimum standard: suggestions for fu- ture research.
1.Introduction
Today, science and technology allow continuous improvement in our environmental performance. Is such improvement always mandatory for the industrial sector, regardless of costs? And what is the Courts’ point of view on this matter, worldwide?
A rigorous and documented answer to such questions is important for both industry and the environment. It is important for industry, as entrepreneurs need to plan their investments several years ahead. It is important for the environment as well, as only what is clearly imposed by the law is also practically enforceable on a large scale. In other words, costs do matter for all the stakeholders involved in the debate regarding environmental protection and regulation. We are aware that some of the points I will raise in this article might be contro- versial. However, only by addressing sensitive issues can legal doctrine attempt to be useful.
We would like to disclose our approach from the very beginning. En- vironmental regulation should be established and interpreted in such a way that it can help the best possible allocation of any available eco- nomic resources. This is the only win-win strategy, capable of protecting the environment from the pressure of industrial plants, as well as indus- try from the risk of an excessive burden of the (sometimes overabun- dant) environmental regulations. Therefore, an equilibrium point must be found between environmental protection and what can be reasonably expected of companies.
Governments, the industry sector and the environmentalists should learn how to avoid the ‘tunnel vision risk’1. Tunnel vision occurs when a single environmental goal is pushed too far, to the point where the in- vested resources could have been much more effectively used for a dif- ferent (environmental) target. Fighting the tunnel vision requires:
– comparing different environmental priorities;
– choosing those where investments can be more effective;
– making this choice after a rigorously scientific approach, which may not be favoured by some of the stakeholders (industry, environmental- ists, politicians).
This article would like to show how the Courts could help and (sometimes) do help fight against the tunnel vision.
Of course, calculating the costs associated with environmental regu- lation presents several obstacles, some of which are related to the deci- sion on what we should include as costs. In particular, the existing inter- actions between environmental and non-environmental costs of compli- ance with environmental regulation pose demanding challenges. In order to better understand and estimate the environmental protection costs, the EU has adopted the Regulation no. 691/20112 which establishes ‘a common framework for the collection, compilation, transmis- sion and evaluation of European environmental economic accounts …’3. As a general rule, the costs of environmental compliance can be divided in ‘direct costs’ (the change in production costs entailed by the policy) and ‘indirect costs’ (all the hidden costs as well as the possible negative effects on productivity caused by the regulation)4.
In the following chapters, several decisions from different Courts, both national and international, will be analyzed. Firstly, the article will examine case law from the European Court of Justice, which pays spe- cial attention to the relation between the precautionary and the propor- tionality principle (chapter 2). Secondly, it will evaluate the approach adopted by the US Supreme Court in a recent case concerning the inter- pretation of the Clean Air Act (chapter 3) as well as a decision from the UK Supreme Court, which ordered the Government to establish new and stricter air quality plans (chapter 4). Thirdly, the evolution of the Italian Supreme Court of Cassation and Constitutional Court position on this topic will be described (chapter 5). Furthermore, an important decision from a Dutch Court, concerning climate change polices, will be discussed (chapter 6). Finally, the conclusions emerging from the analy- sis will be detailed, together with suggestions for future research (chap- ter 7).
1 S. BREYER, Breaking the vicious circle. Toward effective risk regulation (HUP 1993).
2 Regulation of the European Parliament and of the Council 691/2011/EU of 6 July 2011 on European environmental accounting, 2011, OJ L192/1.
2.The ecj point of view: proportionality as a key tool to balance precaution and its costs
According to the Treaty on the Functioning of the European Union,“Union policy on the environment shall aim at a high level of protec- tion taking into account the diversity of situations in the various regions of the Union. It shall
be based on the precautionary principle and on the prin- ciples that preventive action should be taken, that environmental damage should as a priority be rectified at source and that the polluter should pay5”.
A major obstacle when trying to achieve this high level of protection is the difficulty to agree on how it should be balanced against other fun- damental principles and freedoms. Clearly, one of the main battlefields concerns the relationship between the protection of the environment and the economic freedoms6.
In EU law, one of the key tools for balancing competing interests is the principle of proportionality, according to which the content and form of EU action shall not exceed the measures necessary to achieve the objectives of the Treaties7. The European Court of Justice applies a three-stage proportionality test, which can be summarized as follows. The suitability test answers the question whether the measure chosen is suitable or appropriate to achieve the given aim; the necessity test as- sesses whether there are other less restrictive measures; the proportion- ality test stricto sensu considers a measure as disproportionate if, despite being suitable and necessary, it nevertheless imposes an excessive bur- den on the individual8.
The proportionality test has been used by the Court in several envi- ronmental cases. For instance, in the Danish bottles case (C-302/869) the Court questioned the legitimacy of a system, introduced by the Danish government, under which all containers for beer and soft drinks should be returnable. While recognizing that the protection of the environment is “one of the Community’s essential objectives”, the Court observed that “measures adopted to protect the environment must not go beyond the inevitable restrictions which are justified” by those objectives. In this case, decided the Court, the system established by the Danish govern- ment would have involved additional and unjustified costs for foreign producers. Therefore, the Court considered the measure adopted by the Danish government as disproportionate10.
The proportionality principle plays a key role especially in cases where the contested measure is adopted according to the precautionary principle. When applying the latter, a major problem is to establish how the precautionary be proportional to the chosen level of protection11. As the EU Commis- sion wrote: “Measures based on the precautionary principle must not be disproportionate to the desired level of protection (…). Examination of the pros and cons (…) should include an economic cost-benefit analysis where it is appropriate and possible’12.
However, according to the Commission, the analysis of the pros and cons cannot be reduced to a mere comparison between the costs and benefits to society expected from the action with the costs and benefits which would apply if no action were taken. A broader assessment should be provided, to include other non-economic considerations ad evalua- tions13.
A similar point of view was expressed by the European Court of Jus- tice in the leading case Pfizer Animal Health SA v. Council of the Euro- pean Union14. This case concerned the decision of the Council to pro- hibit the use of virginiamycin in animal feedingstuffs. Virginiamycin is an antibiotic which was added in feedingstuffs as growth promoter for ani- mals. The Council was concerned about the possible link between the use of antibiotics in feedingstuffs and the increased resistance to antibi- otics observed in humans. Even if the reasons for the development of re- sistance to antibiotic were still partially unclear, “there was a broad con- sensus among experts that this phenomenon was primarily caused by the excessive and inappropriate use of antibiotics and that resistance developed in animals might be transferred to humans”15. Pfizer, the only producer of virginiamycin, had asked the annulment of the Regulation, claiming that the EU Commission had made an error in the cost-benefit analysis and contending that the regulation was adopted in breach of the principle of proportionality and of the right to property. According to Pfizer’s opinion, the Community institutions could not take preventive measures before conducting a scientific assessment of the risks allegedly associated with the product concerned.
The Court disagreed with Pfizer’s point of view. As to the precautionary principle, the Court held that scientific uncer- tainty and the impossibility to carry out a full risk assessment do not pre- vent the competent public authority from taking preventive and protective measures16. As to the principle of proportionality and the alleged errors in the cost-benefit analysis, the Court considered that a cost-benefit analysis is a particular expression of the principle of proportionality in cases involv- ing risk management17. According to the Court, the importance of the objectives pursued by the regulation may justify adverse consequences, and even substantial adverse consequences for certain traders. In particular, ‘the protection of public health … must take precedence over economic con- siderations’18.
The economic cost of a preventive measure is also a relevant factor in policy decisions: proportionality, indeed, is primarily a principle designed to be applied at the legislative level19.
In Afton Chemicals v. Secretary of State for Transport20, the Euro- pean Court of Justice was asked to judge on the validity of art. 1(8) of the Directive 2009/30/EC21, which set limits for the use of MMT (a metallic fuel additive based on manganese). Such limits had been estab- lished on the basis of the precautionary principle, pending a full assess- ment on any possible health or environmental impacts of MMT22. Afton claimed that the adoption of limits for the MMT content of fuel in- fringed the principle of proportionality and that it was an error to rely on the precautionary principle as a justification. The Court observed that setting a limit for the presence of MMT in fuel is appropriate in re- lation to the aim pursued. This limit – the Court added– does not go be- yond what is necessary to attain the objectives legitimately pursued by the legislation, especially because the initially proposed measure had been a total ban on the use of MMT, while space for revision was pro- vided in the final decision. Thus, in the Court’s opinion, the European legislation under scrutiny was proportionate23. Much more recently, the ECJ (decision 30 March 2017 in Case C 335/16) wrote, in a very clear way, that ‘The imposition on certain [waste] “holders” of costs which are manifestly disproportionate24’ is against EU law.
Additionally, the specific conditions of each Member State are taken into consideration, allowing for exceptions and derogations where neces- sary. However, unless the possibility for derogations has been specifically granted, Member States can invoke neither technical difficulties encoun- tered in the implementation phase nor supposed socioeconomic conse- quences in order to justify, under the principle of proportionality, a delay in the implementation of the EU legislation. Thus, in the case C- 214/0425, the Commission successfully held that the Italian Republic had failed to comply with the Regulation n. 2037/200026. According to this regulation, the use of HCFC should have been banned starting from 2001; the Italian Republic, instead, had allowed existing plants to continue using it until 2008. The Italian Government justified the derogation under the principle of proportionality, claiming that a total ban on the use of HCFC from 2001 would have posed an excessive economic burden on Italian enterprises, if confronted with the minimum benefit for the environment which could have been achieved. The Court affirmed that, unless the possibility for derogation had been specifically granted, Member States could not imple- ment only in part the community regulations, invoking the proportionality principle as a justification for this. Similar conclusions were reached in the case C-68/1127 concerning the Directive 1999/30/EC28. The Commission claimed that the Italian Republic had failed to fulfill its obligations and to insure that the concentrations of PM10 in ambient air do not exceed the limit values set in the Directive. The Italian Republic replied that, in order to achieve those limit values, it would have been necessary to adopt drastic economic and social measures and to infringe fundamental rights and free- doms: therefore, the target was impossible to achieve.
Again, the Court af- firmed that it is irrelevant whether the failure of a Member State to fulfil an obligation ‘is the result of intention or negligence on the part of the Member State responsible, or of technical difficulties encountered by it’29. However, in other cases flexibility in time was accepted by the ECJ as a relevant factor. In case C- 81/14 concerning the Directive 1999/13 on the limitation of the emissions of volatile organic compounds due to the use of organic solvents, the Court held that ‘time extension is an ex- pression of the principle of proportionality’, and, consequently, that: “in the light of that principle, it seems excessive to require operators of an in- stallation to make investments aimed at reducing the emissions of volatile organic compounds of an installation before a certain date if those emis- sions can be avoided or very significantly reduced in the near future, at a lower cost, when substitutes containing little or no solvent, which are still under development, will be available30”.
The time extension should be granted comparing the emissions’ reduction which can be achieved by means of the substitute products with their costs31.
Flexibility has been considered as a particularly relevant factor in regu- lations which have a highly technical content. An example is the Directive 75/2010 (IED) on Industrial Emissions and, in particular, the concept of Best Available Techniques (BAT)32. Best available techniques refer to ‘the most effective and advanced stage in the development of activities and their methods of operation which indicates the practical suitability of particular techniques for providing the basis for emission limit values and other per- mit conditions’33. The IED specifies, however, that the only techniques to be considered are those ‘developed on a scale which allows implementation in the relevant industrial sector, under economically and technically viable conditions, taking into consideration the costs and advantages’34. Further- more, under art. 15 of the Directive, competent national authorities shall generally set emission limits based on BATs, but can also “in specific cases, set less strict emission limit values … where an assess- ment shows that the achievement of emission levels associated with the best available techniques as described in BAT conclusions would lead to disproportionately higher costs compared to the environmental benefits35.”
The Court, commenting on the concept of ‘best technical knowledge not entailing excessive costs’, as referred to in Council Directive 91/271/EEC36, underlined the need not to impose upon the Member States unachievable obligations37.
To sum up, the evaluation of the proportionality of any precautionary policies can and should include a cost benefit analysis. Obviously, the analysis should not be based exclusively on a comparison of monetary values, but should also include non-economic considerations. Addition- ally, a special status is recognized to those requirements that are linked to the protection of public health, which should be given greater weight than economic considerations. The proportionality of precautionary policies may be evaluated taking into account some flexibility mecha- nisms, particularly relevant in regulations which have a highly technical content. Even when it follows a precautionary approach, disproportion- ate environmental regulation which completely omits to take costs into consideration is against EU law, which does not necessarily requires the highest level of environmental performance that is technically possible.
3 Regulation 691/2011/EU (n. 2), art. 1.
4 W.A. PIZER-R KOPP, Calculating the Costs of Environmental Regulation, Resources for the Future, 2003, Discussion Paper 3-6, available at https://core.ac.uk/download/- files/153/9307879.pdf.
5 Consolidated version of the Treaty on the Functioning of the European Union, 2012, OJ C 326/01, art. 191 (2). The interpretation of art. 191(2) and, in particular, of the requirement that EU policy on the environment should pursue a high level of pro- tection has been discussed by Advocate General Kokott in her opinion on case C- 444/15, delivered on September 8, 2016. Interestingly, the AG explains that the high level of protection of the environment that must be ensured does not necessarily have to be the highest that is technically possible… Rather, it requires continuous efforts to be made to increase and improve environmental protection…After all, a level of pro- tection ceases to be high in any event if an even higher level is already achievable – a fact which must not, of course, be confused with the requirement to achieve the highest level of environmental protection technically possible, whatever the circumstances. The foregoing imposes on the EU legislature the requirement, when formulating envi- ronmental legislation, to improve environmental protection at least in areas where this can be accomplished with a reasonable degree of effort and is not precluded by any le- gitimate interests… It should be noted in this regard that… “precluding” interests in- clude those the weight of which is disproportionate to any potential improvement in the level of protection. Case C-444/15, Associazione Italia Nostra Onlus v Comune di Venezia, Opinion of AG KOKOTT, ECLI:EU:C:2016:665, paras 28-34. The ECJ decision in the same case, delivered on December 21, 2016, confirmed that point, maintaining that “Whilst it is undisputed that Article 191(2) TFEU requires EU policy in environmental matters to aim for a high level of protection, such a level of protection, to be compatible with that provi- sion, does not necessarily have to be the highest that is technically possible”.
6 H VEINLA, Determination of the Level of Environmental Protection and the Pro- portionality of Environmental Measures in Community law, 2004, IX Juridica Interna- tional, pp. 89-98, at 96. Balance between economic growth and the protection of the environment is a topic addressed in different Treaty provisions, such as art. 3 TUE, which call on the EU to promote ‘sustainable development’, and art. 11 TFUE, which states ‘Environmental protection requirements must be integrated into the definition and implementation of the Union’s policies and activities, in particular with a view to promoting sustainable development’. With particular reference to art. 11 TFUE De Sadeleer noted that, while on the one side, the article appears to give priority to envi- ronmental protection, on the other side, the promotion of sustainable development re- quire to reconcile economic, social and environmental interests and thus may – by con- trast – weaken the scope of the integration clause. N. DE SADELEER, EU Environmental Law and the Internal Market, (Oxford University Press, 2009) at p. 27.
7 Consolidated version of the Treaty on European Union 2012, OJ C 326/01, Art. 5 (4). It should also be considered that EU measures are expected to be proportionate to the aim of the proposed measures. Here, the objective of a ‘high level of environ- mental protection’ may play a key role. See D. MISONNE, The importance of Setting a Target: the EU Ambition of a High level of protection, 2015, 4 (01), Transnational Envi- ronmental Law, pp. 11-36, at 31.
8 T HARBO, The Function of the Proportionality Principle in EU Law, 2010, 8, Eu- ropean Law Journal, pp. 158-185, 165.
9 Case C-302/86, Commission of the European Communities v Kingdom of Denmark [1988] ECLI:EU:C:1988:421 (Danish Bottles case).
10 See also case C-28/09, European Commission v Republic of Austria [2011] ECLI:EU:C:2011:854, as regards requirements of protection of the environment that can justify national measures restrictive of free movement of goods.
11 T. IVERSON-C. PERRINGS, Precaution and proportionality in the management of global environmental change, 2012, 22, Global Environmental Change, pp.161-177.
12 Commission, Communication from the Commission on the precautionary principle COM (2000) final, paras 6.3.1 and 6.3.4.
13 Commission, Communication from the Commission on the precautionary prin- ciple, COM (2000) final, para 6.3.4.
14 Case T-13/99 Pfizer Animal Health SA v. Council of the European Union [2002] ECLI:EU:T:2002:209.
15 Ibid (n. 14) para 414.
16 Ibid (n. 14) para 382.
17 Ibid (n. 14) para 410.
18 Ibid (n. 14) paras 456- 461.
19 N. EMILIOU explains that, while the principle of proportionality has been mainly regarded as a criterion for judicial review, proportionality can also be seen as a legisla- tive doctrine for the political institutions to follow in their decision making-process. N EMILIOU, The principle of proportionality in European law: A comparative study (Kluwer 1996), at p. 267. N.DE SADELEER, EU Environmental law and the internal market (Ox- ford University press, 2014), at p. 91. See also, Consolidated version of the Treaty on European Union 2012, OJ C 326/ 01, art. 5:
1. The limits of Union competences are governed by the principle of conferral. The use of Union competences is governed by the principles of subsidiarity and proportion- ality.
2. Under the principle of conferral, the Union shall act only within the limits of the competences conferred upon it by the Member States in the Treaties to attain the ob- jectives set out therein. Competences not conferred upon the Union in the Treaties re- main with the Member States.
3. Under the principle of subsidiarity, in areas which do not fall within its exclusive competence, the Union shall act only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States, either at central level or at regional and local level, but can rather, by reason of the scale or effects of the pro- posed action, be better achieved at Union level. The institutions of the Union shall apply the principle of subsidiarity as laid down in the Protocol on the application of the principles of subsidiarity and proportionality. National Parliaments ensure compliance with the principle of subsidiarity in accordance with the procedure set out in that Protocol.
4. Under the principle of proportionality, the content and form of Union action shall not exceed what is necessary to achieve the objectives of the Treaties. The institu- tions of the Union shall apply the principle of proportionality as laid down in the Pro- tocol on the application of the principles of subsidiarity and proportionality.
20 Case C-343/09, Afton Chemical Limited v Secretary of State for Transport, [2010], ECLI:EU:C:2010:419.
21 Directive of the European Parliament and of the Council 2009/30/EC of 23 April 2009, amending Directive 98/70/EC as regards the specification of petrol, diesel and gas-oil and introducing a mechanism to monitor and reduce greenhouse gas emis- sions and amending Council Directive 1999/32/EC as regards the specification of fuel used by inland waterway vessels and repealing Directive 93/12/EEC [2009] OJ L 140/88.
22 LA ALVILÈS, Sustainable development and the legal protection of the Environment in Europe, 2012, 3, Sustainable development law and policy, pp. 29-34, at 30-34.
23 Afton Chemical Limited (n. 20) paras 51-56, 69.
24 Case C 335/16, VG isto a d.o.o. v. uro Vladika, Ljubica Vladika, 2017, ECLI:EU:C:2017:242, para 32.
25 Case C-214/04 Commission v Italy [2005] ECLI:EU:C:2005:440, paras 25-27.
26 Regulation of the European Parliament and of the Council 2037/2000/EC of 29 June 2000, on substances that deplete the ozone layer [2000] OJ L244/1.
27 Case C-68/11, European Commission v. Italian Republic [2011] ECLI:EU:C:- 2012:815.
28 Council Directive 1999/30/EC of 22 April 1999 relating to limit values for sul- phur dioxide, nitrogen dioxide and oxides of nitrogen, particulate matter and lead in ambient air [1999] OJ L163/41, now Directive of the European Parliament and of the Council 2008/50/EC of 21 May 2008, on ambient air quality and cleaner air for Europe [2008] OJ L152/1.
29 European Commission v Italian Republic (n. 26) paras 60-63.
30 Case C-81/14 Nannoka Vulcanus Industries BV v College van gedeputeerde staten van Gelderland [2015] ECLI:EU:C:2015:575, para 60.
31 Nannoka Vulcanus Industries BV (n. 30) para 77.
32 Directive of the European Parliament and of the Council 2010/75/EU of 24 No- vember 2010 on industrial emissions (integrated pollution prevention and control) [2010] OJ L334/17.
33 Ibid (n. 32) art. 3 (10).
34 Ibid (n. 32) art. 3 (10) (b).
35 Ibid (n. 32) art. 15 (4).
36 BTKNEEC (Best Technical Knowledge Not Entailing Excessive Costs), as re- ferred to in Council Directive 91/271/EEC of 21 May 1991 concerning urban waste- water treatment [1991] OJ L135/40.
37 Case C-301/10 European Commission v. United Kingdom of Great Britain and Northern Ireland [2012] ECLI:EU:C:2012:633, para 64.
3. The us supreme court 2015 decision on the costs of epa’s order
According to the Clean Air Act, the EPA (Environmental Protec- tion Agency) has the power to regulate emissions of hazardous air pol- lutants from some kinds of industrial plants. The Agency shall, firstly, categorize plants according to their characteristics and set floor stan- dards for different groups. Then, it should decide whether it is neces- sary to regulate beyond the floor standards, conducting also a cost-benefit analysis38. Section 112 (n) (1) of the Clean Air Act39, as amended in 1990, establishes a special regulatory process for power plants. EPA shall regulate power plants only if it finds that regulation is appropriate and necessary. The Agency decided that ‘it was appropriate to regulate power plants because 1) power plants emissions of mercury and other hazardous air pollutants posed risks to human health and the environ- ment and 2) controls were available to reduce these emissions’40.
States, industries, and other stakeholders challenged EPA’s interpre- tation of the ‘appropriate and necessary’ criterion. The Supreme Court, required to rule on the matter, applied the standard set out in Chevron USA v Natural Resources Defense Council, under which courts shall ac- cept ‘agency’s reasonable resolution of an ambiguity in a statute that the agency administers’; nevertheless, Agencies ‘must operate in the bounds of reasonable interpretations’41. Therefore the main issue was whether EPA interpreted section 112 unreasonably when it considered the costs as irrelevant to the decision to regulate.
In this regard the Court argued that the phrase ‘appropriate and nec- essary’ includes consideration of all relevant factors, among which costs are surely included. What follows is an unusually straightforward quota- tion from the Court’s decision: ‘one would not say that it is even rational, never mind appropriate, to impose billions of dollars in new economics costs for a few dollars in health or environmental benefits’.
Additionally, the concept of ‘cost’ does not comprise only the direct expenditure caused by the obligation to be compliant with environmen- tal regulations; it also includes any indirect disadvantages which can de- rive from those regulations. Thus, EPA’s interpretation ‘precludes the Agency from considering any type of cost-including, for instance, harms that regulation might do to human health or the environment’42.
EPA had argued that it did not need ‘to consider costs when first de- ciding whether to regulate power plants because it can consider costs later, when deciding how much to regulate them’43. Despite this, wrote the Court, ‘the rule is invalid because EPA did not explicitly analyze costs at the very first stage of the regulatory process, when making its “appropriate and necessary” finding’44. The possibility that costs may become relevant later in the regulatory process does not establish their irrelevance in the first stage45.
The Supreme Court’s decision seems the expression of a clearly mo- tivated legal reasoning, not of a political prejudice in favour of industry and against high levels of environmental protection. In fact, in a more re- cent occasion, the same Court refused to take up an appeal from 20 states to block rules that limit the emissions of mercury and of other harmful pollutants (byproducts of coal burning)46.
Both decisions follow the same approach: environmental regulation can and should be very tough when such toughness is proportionate to its aim (and particularly if such an aim is related to public health), not when its benefits would be insignificant when carefully compared to the related costs.
The following conclusions can be drawn. First, the Court strongly held that environmental protection should be balanced to other values, and, in particular, that measures aiming at the protection of the environ- ment cannot be pursued regardless of costs. Secondly, the Court stressed the necessity to find a balance between the costs and the benefits of any environmental regulation since the very beginning of the regulatory process. Third, the Court followed different approaches to the protec- tion of the environment, that always requires taking costs into account, and to the protection of public health, which is due regardless of costs.
38 US Supreme Court, Michigan et al. v. Environmental Protection Agency et Al, of 29 June 2015, 576 U. S._ (2015), p. 4-6.
39 Clean Air Act, 42 U.S.C., sec. 112(n)(1): n) Other provisions.- (1) Electric utility steam generating units.
(A) The Administrator shall perform a study of the hazards to public health rea- sonably anticipated to occur as a result of emissions by electric utility steam generating units of pollutants listed under subsection (b) after imposition of the requirements of this Act. The Administrator shall report the results of this study to the Congress within 3 years after the date of the enactment of the Clean Air Act Amendments of 1990. The Administrator shall develop and describe in the Administrator’s report to Congress al- ternative control strategies for emissions which may warrant regulation under this sec- tion. The Administrator shall regulate electric utility steam generating units under this section, if the Administrator finds such regulation is appropriate and necessary after considering the results of the study required by this subparagraph.
(B) The Administrator shall conduct, and transmit to the Congress not later than 4 years after the date of enactment of the Clean Air Act Amendments of 1990, a study of mercury emissions from electric utility steam generating units, municipal waste combus- tion units, and other sources, including area sources. Such study shall consider the rate and mass of such emissions, the health and environmental effects of such emissions, tech- nologies which are available to control such emissions, and the costs of such technologies.
(C) The National Institute of Environmental Health Sciences shall conduct, and transmit to the Congress not later than 3 years after the date of enactment of the Clean Air Act Amendments of 1990, a study to determine the threshold level of mercury ex- posure below which adverse human health effects are not expected to occur. Such study shall include a threshold for mercury concentrations in the tissue of fish which may be consumed (including consumption by sensitive populations) without adverse effects to public health.
40 Michigan et al. v. EPA (n. 38) at p. 5.
41 Ibid(n.38)atp.6.
42 Ibid (n. 38) at p. 7.
43 Ibid (n. 38) at p. 11
44 Ibid (n. 38) Judge Kagan, and, jointly, Ginsubrg, Breyer, Sotomayor, Dissenting opinion, at p. 2.
45 Michigan et al. v. EPA (n. 38) at p. 11.
46 US Supreme Court, Michigan et al. v. EPA, No. 15-1152, of 13 June 2016, t 579 U.S_(2016).
4. The uk supreme court 2015 decision on the application of clientearth (appellant) v. secretary of state for the environment, food and rural af- fairs (respondent)
This case is related to the failure by the United Kingdom to secure compliance with nitrogen dioxide limit values set by the European Law (Directive 2008/50/CE)47. It follows a preliminary ruling by the Euro- pean Court of Justice on the interpretation of the articles 13, 22 and 23 of the Directive48. In particular, article 13 establishes that member states shall ensure that, throughout their zones and agglom- erations, levels of sulphur dioxide, PM10, lead and carbon monoxide in ambient air do not exceed the limit values laid down in Annex XI. In re- spect of nitrogen dioxide and benzene, the limit values specified in Annex XI may not be exceeded from the dates specified therein49 (the relevant date is the 1st of January 2010). Where a member state cannot achieve conformity with the limit values for nitrogen dioxide or benzene, Article 22 provides a procedure that, under certain conditions, enables postponement of the compliance date, while article 23 imposes a general duty on Member states to pre- pare ‘air quality plans’ for areas where the limit values are not met: ‘the air quality plans shall set out appropriate measures, so that the ex- ceedance period can be kept as short as possible’. In its preliminary rul- ing, the ECJ specified that art. 22 is the only lawful solution for Member States facing problems of compliance. Art. 23, instead, must be seen as an ‘emergency mechanism’50. Therefore, the United Kingdom was obliged ‘to adopt all necessary measures to put an end to the infringe- ment of art. 13’ and ‘to prepare air quality plans […] appropriate to keep the exceedance period “as short as possible”’51.
Both article 22 and 23 require Member States to propose ‘effective, proportionate and scientifically feasible measures to address the specific emissions problems’. However, the requirements of art. 23(1) are more specific than those under art. 22. According to the appellant, the plans submitted by the UK were not ambitious enough. This concern seems to have been confirmed by the observations made in the High Court that ‘a mandatory order would impose upon taxpayers and individuals a heavy burden of expenditure which would require difficult political choices to be made’52. Notably, the Secretary of State admits that, according to pro- jections presented by the Government, compliance with the Air Quality Directive ‘would be achieved later than previously projected’, but con- tends that the main reason for this situation is the difference between the ‘real world’ and ‘test cycle’ emissions of vehicles. Furthermore, the Sec- retary of State agrees that air quality plans need to be revised53. In this regard, the Court points out that, according to ECJ case law, Member States cannot plea ‘impossibility’ as a justification for noncompliance (the Court in particular mentions case C-68/1154). In particular, with ref- erence to the new plan, the Court underlines that relevant ECJ cases, ‘indicate that the scope for arguing “impossibility” on practical or eco- nomic grounds is very limited55’ and that if this were an issue ‘it may call for resolution by the Court at an early stage to avoid further delay in the completion of the compliant plans’56.
From the above reconstruction the Court draws the conclusion that the failure to apply for a derogation, ‘far from strengthening the position of the state, rather reinforces its essential obligation to act urgently under art. 23(1), in order to remedy a real and continuing danger to pub- lic health as soon as possible’57. This reference to public health is very relevant. In spite of clear and scientifically demonstrated risks to public health, the UK Government had chosen the less intrusive possible meas- ures. The Court, therefore, ordered new and more effective plans to be delivered by the UK Government58.
Following the judgment, the Government published it new plan on December 2015. The new Air Quality Plan was again challenged by ClientEarth before the Administrative Court, which declared the plan unlawful59. One of the most debated point was the interpretation of art. 23 of Directive 2008/50/EC which requires Member States to adopt ‘measures appropriate to keep the exceedance period as short as possible’. In particular the discussion focused on proportionality and the relevance of cost. In this regard the Court argued that: (…) there can be no objection to a Member State having regard to cost when choosing between two equally effective measures (…). But I reject any suggestion that the state can have any regard to cost in fixing the target date for compliance or in determining the route by which the compli- ance can be achieved where one route produces results quicker than another. In those respects determining considerations has to be effi- cacy of the measure in question and not their cost. That, it seems to me, flows inevitably from the requirement in the article to keep the ex- ceedance period as short as possible. In my view, the measures a Mem- ber State may adopt should indeed be “proportionate” but they must be proportionate in the sense of being no more than is required to meet the target60.
To sum up, the appellant asked the Court to order the UK to comply with EU regulations on air quality (Directive 2008/50) and in particular to establish the air quality plans required by the Directive. In spite of clear and scientifically demonstrated risks to public health, the UK Gov- ernment had chosen the less intrusive possible measures. According to the UK Court, public health should be guaranteed, regardless of costs. The Court, therefore, ordered new and more effective plans to be deliv- ered by the UK Government.
47 Directive of the European Parliament and of the Council 2008/50/EC of 21 May 2008 on ambient air quality and cleaner air for Europe [2008] OJ L152/1.
48 ClientEarth v. Secretary of State for the Environment, Food And Rural Affairs [2015] UKSC 28 & [2013] UKSC 25, para 1.
49 Directive 2008/50/EC (n. 47) art. 13.
50 ClientEarth v. Secretary of State (n. 48) para 13. 51 Ibid (n. 48) para 16.
52 Ibid (n. 48) para 17.
53 Ibid (n. 48) paras 20-23, 29.
54 It is irrelevant whether the failure to fulfill obligations is the result of intention or negligence on the part of the Member State responsible, or of technical difficulties encountered by it’; ClientEarth v. Secretary of State (n. 48), para 25.
55 Ibid (n. 48) para 33.
56 Ibid (n. 48) para 33.
57 Ibid (n. 48) para 27.
58 Ibid (n. 48) para 31.
59 ClientEarth (No 2) v Secretary of State for Environment, Food And Rural Affairs [2016] EWHC 2740.
60 Ibid (n. 59), paras 50-51.
5. Evolution in the italian constitutional court position. from 1990 to 2013
The decision n. 127/1990 of the Italian Constitutional Court61 dis- cussed if, when, and how costs should be taken into account by local au- thorities while regulating the emission limits of a given industrial plant. The main question in this case concerned the interpretation of article 2 n. 7 of the law n. 203/1988 on industrial atmospheric emissions62. This provision established that, in determining minimum and maximum emission values, one of the criteria to be taken into account was the con- cept of ‘best available techniques’. The article then defined best available techniques, as ‘verified and tested technological instruments which allow the reduction of the emissions to acceptable levels in order to protect health and environment, providing that the application of these meas- ures does not involve excessive costs’. According to the judge addressing the Constitutional Court, this rule would imply that the emission values are to be fixed taking into account the cost of the technology itself. It fol- lows – the judge continued – that the protection of public health and of the environment would depend on the economic possibility to adopt or not to adopt certain technologies. Such a law – the judge wrote – would violate art. 32 (right to health) and art. 41 (necessary social utility of any economic freedom) of the Italian Constitution63. The decision from the Italian Constitutional Court followed a logical and systematic interpreta- tion of the existing law. The Court wrote that it would be unreasonable if the legislator, on the one hand, had established maximum emission limit values in order to protect public health and the environment, while, on the other hand, had allowed industries not to adopt measures which are necessary to reduce emissions, only because those measures were too costly. In the opinion of the Italian Constitutional Court, maximum emission limit values should always be fixed in order to guarantee an ac- ceptable level of health protection, regardless of costs. The costs of the measures should be taken into account only when the legislator wants to establish stricter limit values, that go beyond the minimum level which is necessary to protect public health.
The Cassazione penale, the highest criminal court in Italy, expressed an even stricter point of view in judgment n. 4675/200664 concerning the Petrochemical Plant of Porto Marghera. The managers of the Plant had been accused of disaster and manslaughter for having used polluting substances without taking the necessary precautions. The applicable law stated that the employer had to ‘reduce as much as possible’65 the devel- opment and dissemination of harmful substances or dusts present in the workplace66. The Court decided that in this case costs were irrelevant and that all the possible technologies should have been adopted by the plant managers in order to safeguard the workers’ health67.
However, in a case concerning an accident between two trains – which could have been avoided had the trains been equipped with a new system (auto-repeat system) – the same Court adopted a partially differ- ent, and much more proportionated, approach68. The new system had been installed on all the newly constructed trains but not on the old ones, which nevertheless were still in use. The question then was whether the company should have installed the new system on all trains. In more general terms, what was the level of upgrading that companies could be required to implement in the event of the availability of suitable innovations69? In the Court’s opinion, the employer is not obliged to carry out the immediate replacement of the previously used techniques with the most recent and innovative ones. In fact it is impossible for the law to oblige a company to continually renew its technologies, that can only be regularly updated following a long term plan. In theory, said the Court, such an obligation would increase the level of safety; in practice, it could lead the company to bankruptcy70.
Furthermore, the jurisprudence of the Italian Constitutional Court evolved in the same direction, i.e. towards a more balanced approach. For instance, in the ruling n. 85/201371 the Court concluded that the protection of the environment cannot be pursued at the expense of other principles and interests, which are equally relevant at the constitutional level. The ruling concerned an important steel production plant situated in Taranto, which was operating without respecting some of the more ef- ficient environmental standards. The main discussion was about the pos- sibility to enable the plant to remain active while improving its environ- mental standards. Such a possibility would have safeguarded thousands of job positions. The Court, in this case, recognized that the right to health and to a healthy environment must be balanced with the right to work72.
From the case law analyzed, it clearly emerges that there has been a significant evolution in the Italian Courts’ position. In a first phase, both the Constitutional Court and the Cassazione Penale held that an ade- quate level of environmental and health protection must always be guar- anteed, regardless of costs. More recently, the same Courts have adopted a more balanced point of view, underlying how important it is that the protection of the environment be balanced with other principles and in- terests, relevant at the Constitutional level. The economic sustainability of any environmental protection measures has to be included among the mentioned relevant interests.
61 Italian Constitutional Court, judgment n. 127 of 7 March 1990.
62 Art. 2 n. 7. d.P.R (Decreto del Presidente della Repubblica) 24 May 1988 n. 203 ‘Migliore tecnologia disponibile: sistema tecnologico adeguatamente verificato e speri- mentato che consente il contenimento e/o la riduzione delle emissioni a livelli accettabili per la protezione della salute e dell’ambiente, sempreché l’applicazione di tali misure non comporti costi eccessivi’.
63 Italian Constitutional Court (n. 61) at p. 2-3.
64 Italian Supreme Court of Cassation, sec. IV, judgment n. 4675 of 17 May 2006.
65 “ridurne per quanto possibile”.
66 Italian Supreme Court of Cassation (n. 64) at p. 156.
67 Ibid (n. 64) at p. 157-158.
68 Italian Supreme Court of Cassation, sec. IV, judgment n. 41944 of 6 October 2006.
69 Ibid (n. 68) at p. 7.
70 Ibid (n. 68) at p. 8.
71 Italian Constitutional Court, judgment n. 85 of 9 April 2013.
72 Ibid (n. 71) at p. 8-11.
6. The ‘urgenda’ case in the Netherlands
The relationship between environmental protection and economic costs was also discussed by other national courts, particularly in cases re- lated to climate change. A typical example is the Urgenda case in The Netherlands73. On June 2015 the Hague District Court ordered the Dutch Government to ‘take more action to reduce greenhouse gas emis- sions in the Netherlands’ and to ‘ensure that the Dutch emissions in the year 2020 will be at least 25% lower than those in 1990’.
The case was brought before the Court by the Urgenda Foundation, a citizens’ platform involved in the development of plans and measures to prevent climate change. Urgenda claimed that the current volume of greenhouse gas emissions in the Netherlands was unlawfully high. The State, on the contrary, replied that it could not be obliged by a judge to pursue a specific climate policy74. The parties agreed that climate change is a serious problem; the dispute did not concern the need for mitigation but, rather, the level of greenhouse gas emissions reduction that will be necessary during the coming years75.
Thus, the main question to be answered by the Court was whether ‘the State is in breach of its duty of care for taking insufficient measures to prevent dangerous climate change76’. According to the Tribunal, the answer shall take into account all the following factors:
– The nature and the extent of the damage resulting from climate change
– The knowledge and foreseeability of this damage
– The possibility that hazardous climate change will occur
– The nature of the acts (or omissions) of the State
– The costs of taking precautionary measures77 .
According to the Court, it is ‘relevant to find out whether taking pre-cautionary measures is onerous … and whether the precautionary meas- ures are too costly in relation to the possible environmental damage’78. The Tribunal wrote that, according to the Ministry of the Environment79, ‘a scientifically established emissions’ reduction of 25-40% by 2020 was needed in order to attain the 2° C target’80. Therefore, ‘if according to the current insights it turns out to be cheaper on balance to act now, the State has a serious obligation, arising from due care, towards future gen- erations to act accordingly. … However, a cost-benefit analysis is allowed here’81. Despite the recognized possibility of a cost-benefit analysis, the State did not maintain that the reduction path of 25-40% would lead to disproportionately high costs or would not be cost effective. On the con- trary, during a hearing, the State confirmed that it would be possible for the Netherlands to meet the 30% target by 202082. Thus, the Court con- cluded that the target chosen by the state could not be deemed sufficient and that a reduction path of 25-40% by 2020 should be followed in- stead. However, the Court’s conclusion might have been different ‘if the reduction target of 25%-40%’ had been ‘disproportionately burden- some for the Netherlands’. Economic difficulties in fact may be a legiti- mate reason for setting lower environmental standards. When the eco- nomic situation makes it necessary, the State can deviate from its set en- vironmental standards in order to prevent ‘greater potential danger’83. That not being the case, the Court ordered the State ‘to limit the joint volume of Dutch annual greenhouse gas emissions, or have them limited, so that this volume will be reduced by at least 25% at the end of 2020 compared to the level of 1990’.
To sum up, under the tort law umbrella, Urgenda asked the Court to force the Government to radically change its national policy on climate change. Though deciding in favour of the Urgenda’s claim, the Court took expressly into account the economic aspects and considered the cost effectiveness of any policies as a relevant point. Thus, this decision followed an approach which is not substantially different from that of the Courts mentioned in the previous paragraphs.
This case poses, however, a different problem – a problem of and with ‘democracy’ – which is impossible to be analyzed here: whether, when, and under which conditions can a Court directly and bindingly in- fluence the national policies which fall into the constitutional compe- tence of the Government84.
73 Judgment of The Hague District Court of 24/06/2015, Urgenda Foundation v The State of the Netherlands, n. C/09/456689/HA ZA 13-1396.
74 Ibid (n. 73) paras 3.1-3.2.
75 J. VAN ZEBEN, ‘Establishing a Governmental duty of Care for Climate Change Mitigation: will Urgenda turn the tide?’ (2015), 4(02), Transnational Environmental Law, pp. 339-357, at 344.
76 Urgenda Foundation (n. 73) para 4.55.
77 ibid (n. 73) para 4.63.
78 ibid (n. 73) para 4.67.
79 Letter of 12 October 2009 with subject ‘Objective of the negotiations in Copen-hagen and appreciation of the Commission’s announcement about climate financing’, mentioned in Urgenda Foundation (n. 72) para 2.73
80 Urgenda Foundation (n. 73) para 4.70. 81 Ibid (n. 73) para 4.76.
82 ibid (n. 73) para 4.70.
83 Ibid (n. 73) para 4.86.
84 L. BERGKAMP, The Paris Agreement on Climate Change: A risk Regulation Per- spective, 2016, 1, European Journal of Risk Regulation, pp. 35-41. On this point and for an analysis of the possible impacts of the case outside The Netherlands see also J. VAN ZEBEN, Establishing a Governmental duty of Care for Climate Change Mitigation: will Urgenda turn the tide?, 2015, 4(02), Transnational Environmental Law, 339-357.
7. Conclusion
7.1. The emerging criterion of a minimum standard of protection of ‘public interest’ which must be guaranteed, regardless of costs
The aim of this article was to evaluate if and to what extent, accord- ing to national and international courts, governments and agencies should take into account the costs which may be incurred by their deci- sions and orders. This final chapter tries to summarize the conclusions emerging from the analysis carried out in the previous parts of the arti- cle. Such conclusions emerge with sufficient unity and clarity from case law delivered by a number of different Courts (national, international, constitutional, etc.) in very different areas of the world.
Two main points need to be considered. First, when there is a signif- icant public interest involved, costs do not matter. In such a situation, ac- tion is due, regardless of costs85. Second, in all the other cases:
– Public authorities have a constitutional duty to take costs into con- sideration86;
– The proportionality principle is the leading criterion to be used while balancing the costs and effects of any new measure or order affect- ing the industrial sector87.
Consequently, disproportionate environmental regulation which completely omits to take costs into consideration is against EU law, even when it follows a precautionary approach.
7.2. Legal and policy reasons for such a criterion
The legal basis of the analyzed case law is the need to find a balance between two contrasting legal principles: the precautionary principle, typical of environmental law, and the proportionality principle, which influences public law in general. The former requires that action be taken to deal with serious and identified environmental risks, whatever the level of certainty of the science that describes such risks and their causes88. The latter demands that, whenever possible, the best available balance be chosen, in order to make environmental protection compat- ible with different constitutional interests, and consequently ‘sustain- able’89. Far from being just a theoretical legal construction, the crite- rion proposed worldwide by the most recent case law is also supported by strong policy reasons. Environmental protection involves a set of very sensitive and difficult choices. For these choices to be imple- mented regularly and effectively, it is necessary that they gain wide sup- port among the public and the most relevant stakeholders. Only by adopting a balanced approach, can environmental policies attain such wide support90.
7.3. How to identify such a minimum standard: suggestions for future research
The final question to be briefly examined is the most difficult one: what are the best tools to help regulators and Courts identify the ‘mini- mum standard’ of protection to be guaranteed, regardless of costs? Al- though this issue does require further research, some guidelines can al- ready be identified through an in-depth examination of the relevant case law and legal doctrine. First, the ‘minimum standard’ must aim at avoid- ing significant and extensive harm91 and the potential irreversibility of the harm can be a decisive indicator of such harm being significant92. Second, this standard must be based on scientific assessment, more than on political choices93. Third, decisions of this nature should be taken at national or international level, not by local authorities94.
Once such a minimum standard is identified, it would be interesting to analyze whether it can also work as a kind of link between environ- mental law and human rights. However, this of course requires further and specific research.
85 Italian Constitutional Court, judgment n. 127 of 7 March 1990, Italian Supreme Court of Cassation, sec. IV, judgment n. 4675 of 17 May 2006.
86 US Supreme Court, Michigan et al. v. Environmental Protection Agency et Al, of 29 June 2015, 576 U. S._(2015).
87 Case T-13/99 Pfizer Animal Health SA v. Council of the European Union [2002] ECLI:EU:T:2002:209.
88 Commission, Communication from the Commission on the precautionary prin- ciple, COM (2000) final.
89 Cost-benefit analysis is the most relevant tool to be used in order to compare ad- vantages and disadvantages of any new environmental policy. Also, nudging new poli- cies through incentives and disincentives is often more effective than it is imposing them through legal obligations and sanctions (R.H. Thaler and C.R. Sunstein, Nudge. Improving Decisions About Health, Wealth and Happiness, (Penguin 2009).
90 J.E. VINUALES, The Paris climate agreement: an initial examination, 2015, 6, C- EENRG Working Papers, available at http://www.ceenrg.landecon.cam.ac.uk/working- papers/working_papers#wp3, pp. 1-25, at 1.
91 P.M. DUPUY-J.E. VINUALES, International Environmental Law, (Cambridge Uni- versity press 2015).
92 V. GALGANO, La forza del numero e la legge della ragione, 2012, Il Mulino, at p. 233.
93 Italian Constitutional Court, judgment n. 116 of 8 March 2006 and Italian Con- stitutional Court judgment n. 282 of 19 June 2002.
94 S. BREYER, Breaking the Vicious Circle. Toward effective risk regulation, (HUP 1993).
THE COST OF ENVIRONMENTAL PROTECTION
LUCIANO BUTTI-BEATRICE TONIOLO
The cost of environmental protection under court scrutiny worldwide
I costi del costante rispetto delle regole ambientali possono essere elevati e co- stituiscono un tema cruciale. Scopo di questo articolo è quello di valutare se e fino a quale punto, secondo i Tribunali nazionali e internazionali, i governi e le agenzie ambientali dovrebbero prendere in considerazione i costi che potrebbero derivare dalle loro decisioni in materia ambientale. Casi verificatisi nel Regno Unito, in Italia, negli USA, in Olanda e di fronte alla Corte europea di giustizia saranno analizzati.
The cost of compliance with environmental regulation can be very high and is a crucial issue. The aim of this article is to evaluate if and to what extent, according to national and international courts, governments and agencies should take into account the costs which may be incurred by their decisions and orders when deciding on meas- ures of environmental protection. Case law from the UK, Italy, U.S.A, The Nether- lands and the European Court of Justice will be analyzed.
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