It's important to understand the basics of public environmental law because that's a really essential part of the picture of what is influencing the transition to a net zero economy and what is going to have an effect on business firms, households, and consumers. So I want to start there. If you think about the public aspect of environmental law and governance, It can really be divided into three distinct eras. The first era or first generation involved the adoption by congress of canonical federal environmental statutes like the Clean Air Act, the Clean Water Act, the National Environmental Policy Act, CERCLA, also known as the Superfund Statute, RCRA or the Resource Conservation and Recovery Act. These statutes embodied a number of different tools to address pollution. Some of those tools included the disclosure of information or the requirements of labeling, but others used more hammer like tools that prohibited certain actions entirely. The second generation of public environmental laws adopted different approaches. So some of these were embodied in federal statutes and regulations adopted by the EPA, but rather than using the kind of full hammer to ban a particular activity. These employed market leveraging approaches like the use of taxes or emissions trading. The third generation began the shift away from the government as the sole environmental regulator. Some aspects of the third generation included situations in which a public or government regulator would adopt a standard that would give more latitude to the private sector to figure out how to embody it within production processes. And the third generation included the full shift to what's known as private environmental governance. So let's start with the first generation of canonical federal environmental statutes. These included the Clean Air Act and the Clean Water Act, both adopted in the Early 1970s by Congress, and both statutes gave enforcement authority to the EPA to adopt rules and regulations to help them come into effect. So the Clean Air Act sets rules for both mobile and stationary sources of pollution, mobile sources being cars and trucks, as well as SUVs and stationary sources being primarily power plants. The Clean Water Act set an ambitious goal to make all of the rivers and streams and other waters of the United States swimmable and fishable within a small number of years. Needless to say we did not achieve those goals immediately, but the waters of the United States are substantially cleaner than they were when the Clean Water Act was first adopted. The Clean Water Act uses an important tool which basically prohibits the discharge of any pollutant into the waters of the United States unless that entity first obtains a permit. So it creates a regulatory regime of permits that have substantially limited water pollution in the United States. Another example of a first generation public environmental law is the National Environmental Policy Act. So while you might have heard the term command and control in connection with public environmental law, often it's used as a sort of pejorative term. The idea that early environmental statutes would command and control industry within the United States to take certain actions. In fact, the first major federal environmental law in the United States was the National Environmental Policy Act. The entire purpose of the National Environmental Policy Act, which was signed into law by President Nixon and became effective on January 1, 1970 was to make it so that federal agencies would consider and disclose the environmental impacts of their major actions before proceeding with those actions. There was no requirement whatsoever for the government to choose the least environmentally harmful approach to that action as long as it studied the environmental impacts and disclose them to the public and gave the public an opportunity to comment and be heard with respect to those impacts. The government could proceed. Examples of actions that would require this kind of National Environmental Policy Act. Environmental Impact Assessment would include things like the construction by the Army Corps of Engineers of levees in New Orleans. But it would also include an assessment by a government agency as to whether to grant a permit or a license to a rail company to a private firm that wanted to build a rail line into the powder River basin in Wyoming to mine for coal. Other major federal actions that would require this kind of environmental impact assessment include oil and gas lease approvals or the decision to dredge the New York, New Jersey harbor to deepen the ports in order for that harbor to remain competitive with other ports in the United States. So the deeper drafting vessels could enter the ports and bring products to shore. What will be very interesting to see is how the National Environmental Policy Act environmental impact Assessment process will proceed when it comes to new infrastructure projects for renewable energy. So if a private company wishes to build a solar array on private land, NEPA, the National Environmental Policy Act does not come into effect. But if an entity wishes to build a solar array on public land or a wind farm on public land, that requires the government to issue a permit or a license or some kind of approval that requires the environmental impact assessment process to take place. So while NEPA does require the consideration of climate impacts, it does not prioritize the consideration of climate impacts over any other environmental impact. And so this will be an area to watch very closely going forward. Other examples of canonical federal environmental statutes and regulations in this first generation include the superfund law. As you can see on the left, that is an image of Love Canal in New York, an area that used to be owned by a chemical manufacturer that had disposed of chemical waste into the soil and on the ground before ultimately closing. The land was ultimately sold and houses and schools were built on this land. But at a certain point, black sludge began bubbling up into the basements of people's homes and schools and something needed to be done to get those people to safety. Congress responded by enacting the Superfund statute, which provides for funds that can be used in an immediate fashion to get people to safety and provide for environmental hazard mitigation, as well as funding for long term environmental response actions. Similarly, RCRA, the Resource Conservation Recovery Act deals with the cradle to grave lifecycle of hazardous chemicals, ensuring that those who generate transport and dispose of them are doing so in a way that reduces pollution. And finally, the toxics release inventory program, which is a regulatory program adopted under the Emergency Planning and Community right to know act in the wake of the Bhopal disaster in India. In 1984 a major cloud of methyl isocyanate was released over a factory that was producing fertilizer and lead immediately to the deaths of thousands of people, as well as long term harm to others. This led to a push in the United States for the notion that we all have a right to know what chemicals are being used in our community, not only for our own individual decisions, but also so that state and local planning agencies can be prepared to prevent or mitigate disasters. So still focusing on public environmental law, the second generation of public environmental law adopted market leveraging approaches to address the problem of pollution. So one well known example under the Clean Air Act was the EPA program for acid rain emissions trading credits, which has led to substantial reductions in sulfur dioxide emissions nationwide. Other examples, not at the national level, include RGGI, the regional greenhouse gas initiative, which is a coalition of multiple states in the northeastern part of the United States to create a cap and trade system for the electric power generating sector. This too, has coincided with a significant drop in greenhouse gas emissions from covered entities over the life of the RGGI program and has generated significant additional revenue for the participating states through the sale of allowances. Finally, at the state level, an example of a market leveraging approach is a cap and trade system adopted by California in 2006, called the Global Warming Solutions Act, also known as AB or Assembly Bill 32. That too adopt a market leveraging approach meaning trading rather than a ban or a prescriptive rule that would require, for example, the installation of certain pollution control technologies.