Michigan Green Law

As regular MichiganGreenLaw readers know, about 18 months ago, we added insulation to our home.  While three years of data (one before, one of and one after) is not a big enough database, I spent time evaluating at the last three years of our DTE and Consumers Power invoices.  What I learned is that our sense that our house was warmer in the winter and stayed cooler in the summer appears to be accurate.  We saw a reduction in our usage and, while rates vary over time, it does appear that we are saving money.  Now we find ourselves asking how long before this improvement pays for itself in savings?

This is the question that many businesses ask before making alternative energy investments – “How long before I recoup my investment?”  Often, in the post-2007 era, businesses will insist on less  than three years.  Savvy investors know that there are many different methods used to analyze capital projects including net present value (NPV), internal rate of return (IRR), cash flow, profitability index (PI), and payback period.

The payback period method does not take into account the time value of money, the likely increase in costs of energy ($4.30 a gallon of gas, anyone?) and this method doesn’t consider cash inflows after the initial investment is recovered (except the recognition that it’s “all gravy” conclusion).  The payback method’s biggest advantage is it is easy to apply and understand.  However, as more and more authors are writing, this method is misleading and often unfair – as this author notes, no one asks for the payback on home amenities. In short, when making these investments, one must treat them as investments and, taking into account incentives, cash flow, cost of money, projected increases in the cost of energy, (not to mention the ability to market the greener approach or the societal value of a smaller carbon footprint)  consider whether investing in greener equipment or processes is the best use for the company’s funds when compared to other investment opportunities. In many cases it may be the best investment, despite a longer than desired payback period.

It’s what’s for dinner?

The United Nations recently released a report recommending the farming of insects for food.  The report notes that insects are highly nutritious and healthy with high fat, protein, vitamin, fiber and minerals.   With concerns about animal diseases like “mad cow,” genetically modified foods, overuse of antibiotics, cruelty to animals, lack of space for farming, management of animal waste, etc., the UN thinks insects may be part of the answer.

“Insect farming” isn’t new – think of bees, silkworms and crickets you can find at the local pet store for lizard food.  However, the concept of large scale farming insects for food is relatively new.

High soy prices and increasing aquaculture is pushing research into developing insect protein for aquaculture and poultry – if not directly for human consumption.

In many countries, including the US, the lack of a legal framework on insects as food and feed may be a major barrier to investment and development.  The UN report noted concerns regarding:

• Unclear regulations and legislation on farming and selling insects for human consumption;
• Difficulty in understanding information regarding processing and quality;
• Little networking among producers;
• A lack of awareness among consumers and buyers about existing markets leading to low demand; and
• It is difficult to market insects for human consumption because they are perceived to be unsanitary. (Or as we call it in my family, the “ick” factor).

Would you eat a tofu made from bugs?  It makes me think of the old movie “Soylent Green“  – it’s bugs!

In February, we mentioned that, in an effort to combat the low water levels in Michigan’s smaller harbors, the Michigan House of Representatives had introduced a bill that would amend the Natural Resources and Environmental Protection Act to include “the dredging of Great Lakes Harbors for use by recreational watercraft” as part of “developing public recreation facilities,” thereby allowing money from the State Natural Resources Trust Fund (the “Trust Fund”) to be diverted to harbor maintenance. 

Unfortunately, it looks like that legislation is dead in the water as Michigan Attorney General, Bill Schuette, recently released an opinion (Opinion No. 7270) that the Trust Fund cannot be used for the maintenance of existing public recreation facilities, such as maintenance dredging of existing harbors.  His conclusion is based on the fact that the Trust Fund was established through an amendment to the Michigan Constitution approved by citizens, and therefore the Legislature cannot substantively change the meaning or scope of the constitutional language adopted by the people.  Because the relevant constitutional language uses the term “development” and there is an absence of any reference to “maintenance”, it was determined that the plain language of the Const 1963, art 9, §35, does not authorize the use of Trust Fund money for the maintenance of existing recreational facilities, including maintenance dredging of Great Lakes harbors for use by recreational watercraft.

The opinion also addressed whether funds from the Waterways Account of the Michigan Conservation and Recreation Legacy Fund could be used for the operating and maintenance of public recreation facilities, including the dredging of existing harbors. The conclusion?  The funds can be used for such a cause but such expenditures must be directed to public, rather than private, recreation facilities and the primary purpose of the dredging must be to enhance access for recreational watercraft.  

The impact of these decisions may be lessened if the weather continues to cooperate.  While the levels of lakes Michigan and Huron are still 22 inches below their long-term average and 6 inches lower than last year, recent precipitation caused both lakes to rise 9 inches during April – a well above average rise for this time of year.

So, the President said in January and in February, that climate change was one of his priorities and Congress could either work with him or he’d go it alone.   What might the President do on sustainability and climate change without Congress ? Well, the Armed Forces are thinking about, talking about and planning for heightened conflicts caused by climate change and the challenges of waging war in a more intense environment.

What else might the President do? He could:

1.  Impose heavier regulations on existing power plants, which reportedly account for 1/3 of U.S. greenhouse gas emissions.

2.  Fully disapprove the Keystone XL Pipeline which many have said will result in few permanent jobs but perhaps the “dirtiest” oil available.

3. Attempt to regulate fracking – which will be difficult under the current Congressional regime.

4. Ramp up government procurement – making sustainability a mandate; retrofitting government buildings and pushing renewable power for government operations.

5. Attempt to require methane capture during natural gas production.

6.  Continue pressure on automakers to improve gas mileage.

7. Adopt even more energy efficiency standards for household appliances and industrial equipment.

8. Promote planning and codes for resilience in design and construction to guard against catastrophic harms from events like Hurricane Sandy.

Interestingly, without governmental involvement, the market itself appears to be pushing companies to assign monetary value to their impacts on the environment as part of an overall drive toward “sustainability.”  Once you start measuring the impacts, it becomes easier for shareholders and the marketplace to drive less efficient companies toward efficiencies.  So, perhaps the President doesn’t need to do anything.

Since 2006, discussions and speculations about honeybee Colony Collapse Disorder have been rampant. Reportedly, the disorder has wiped out roughly half of the commercial hives used to pollinate farmer fields.  This is an environmental problem with huge commercial ramifications.  There are many species of fruits and nuts that cannot easily reproduce without the honeybee.  Speculation as to what is causing the disorder has included high fructose corn syrup fed to bees, newer pesticides, and other causes.

On Thursday, the USDA and EPA released a report summarizing the “state of the art” knowledge of the situation and ultimately concludes that this disorder results from a confluence of causes.  Key findings include:

• A parasitic Varroa mite is a major factor – while beekeepers treat for this, there are resistant mites;
• Genetic diversity and variation is needed to improve bee thermoregulation and disease and mite resistance;
• Nutritional opportunities need to be improved – like anyone else, weaker bees are more susceptible to harm from disease and parasites;
• The report recommends improving forage and a variety of plants to support colony health – even to the point of encouraging innovative land management techniques to maximize available nutritional forage to promote and enhance bee health;
• Most interestingly, the report recognizes Best Management Practices for bees and pesticide use exist, but notes that they are not widely or systematically followed – this needs to be improved;
• The report concludes that additional research is needed to determine risks from pesticides.

Hopefully, this is a solid step toward minimizing this disorder.  One thing the report says we can do is plant a variety of flowers to give the surviving bees a healthy environment to feed.

Earth Day 43 seems to have been lost given the recent events in Boston, Texas and elsewhere.  The environmental news continues to be a mixed bag – with reports of fewer Americans “caring” about the environment but perhaps more “acting” in a “green” way.

We have certainly come a long way from the challenges and problems that led to the first Earth Day -  a 1969 oil spill in Santa Barbara, California; the dead zone in Lake Erie; smog in Los Angeles and elsewhere and burning rivers in the Midwest.

The first Earth Day led to the creation of the US Environmental Protection Agency and the passage of the Clean Air, Clean Water, and Endangered Species Acts.  As the EPA and its state counterparts have continued to regulate, there has been a backlash of business and media outcry which certainly must weigh on the public’s views.

The challenges we face today are far more complicated and, to many, more daunting.  We still have oil spills, but now they are from larger ships and deeper wells.  Lake Erie and many other bodies of water are still challenged by more diffuse and “below the radar” sources of contamination.  While reducing the impacts of asbestos, lead and NOx from our daily lives, and healing the ozone hole, we now face questions regarding greenhouse gasses, impacts from and in China and the developing world, and the challenges and benefits posed by fracking.

As is often the case, once the “low hanging fruit” of black and white are picked, what we are left with is grey and grey isn’t as shocking or engaging as black and white.  The issues are just as important, and in many ways, very high profile, but it’s unlikely that our polarized country would agree on what changes would be best, if any.

A couple weeks ago, the state of Michigan approved Flint’s plan to join Genesee and neighboring counties in the Karegnondi Water Authority project.  That approval, however, was subject to a final offer from the Detroit Water and Sewerage Department (DWSD).  The final offer was delivered last week, but it appears that the proposal did not go far enough to lower costs in the Flint area and so Flint plans to join the pipeline project.  This means that Flint will ultimately separate from Detroit’s water system; an action that DWSD officials say will cause the department to lose about $22 million immediately and result in higher rates to residents throughout the region.  According to Genesee County officials, the rising costs and decreased reliability of Detroit’s system promoted the pipeline proposal.   

Once the Karegnondi Water Authority pipeline is complete, Flint will get 16 million gallons of water per day from Lake Huron and 2 million from the Flint River.  The water will be treated in Flint at existing plants (after modifications are made) and then sold to city customers. 

For more on the DWSD’s take, here is their press release from earlier this month.