The Legal Challenges of

Carbon Capture Technology

The legal system’s role in mitigating climate change: courts crafting legal decisions that advance carbon capture technology; law firms helping launch carbon capture entrepreneurial ventures.

We are here today with Gary Nissenbaum, the managing attorney of the Nissenbaum Law Group. So Gary, can you tell us why the law firm is seeking to work with clients who are using carbon capture technology to address the climate change problem, and what are some of the legal issues raised by carbon capture and negative emissions technology?

Well, what we’re finding is that the typical model of a company getting involved in green technology—everything from electric cars to ways of disposing of solid waste that is environmentally friendly—all those things are excellent. They’re very, very helpful to the problem. But they’re not fixing it.

So the next phase of this has got to be to augment what those clients are doing with an aggressive initiative to pull the carbon out of the atmosphere, to literally capture it, render it into an inert state, and put it in a place where it will not become a greenhouse gas, such as burying it, so it will not decompose and become a greenhouse gas. The idea of that is terrific and it just may be the solution to do those two things at once.

The Legal Challenges of Carbon Capture Technology

The problem with it is legal. Because from a lawyer’s perspective, from what our firm is seeing in terms of this issue, it raises some very basic questions for which there’s no ready answer. Number one, if you’re burying these inert bricks that have greenhouse gases saturated within them, isn’t that creating (ironically) a toxic waste dump? In other words, aren’t there federal, state and local laws and regulations that would prevent that? And even if you could find a way of getting around that through some sort of waivers, nevertheless, these are technologies that are supposed to help the environment. Can we be sure that it’s not going to create a problem by burying all those inert bricks, in terms of the water table, in terms of them decomposing in the earth and so forth?

Is there a health risk in using carbon capture? And on a larger scale, are there insurance products that can mitigate the risk for entrepreneurs who are moving into this area? Are insurance companies keeping up with this technology? Are they creating the means of insuring companies that are engaging in a technology that is virtually unheard of among the public and for which the insurance companies simply may not have caught up?

Are there legal business models that might apply to market this technology?

Yes, there are. One would think that the publicly traded model would be the best one, that you would essentially have a public offering, have these companies traded on the stock exchange. They would largely be carbon capture companies exclusively, and that would be the model. It’s been the model in many new technologies. An example of companies utilizing new technology, rather than legacy technology, can be seen throughout Silicon Valley. But that doesn’t seem to be happening that way. Instead, what seems to be happening is that existing companies that are actually contributing to the carbon problem, the greenhouse gas problem, energy companies that utilize all sorts of carbon-producing technologies, seem to be the ones that are touting themselves as investing in carbon capture. And many of those companies are publicly traded already.

Law Firms Need to Help Carbon Capture Entrepreneurs Maximize Their Impact

What we’re not seeing are carbon capture companies that are engaged in this technology exclusively, at least not seeing such companies currently having public offerings, but it’s not clear that that will continue. It may be that that will change, but while we’re waiting for that to happen, I think that law firms need to step up and help entrepreneurs who are seeking to fund their companies through private means and are seeking to leverage this technology in a way that provides it to the consumer on a smaller scale.

Law firms need to find ways of maximizing that impact so that it can be more robust, and ultimately go across borders. Perhaps not just state borders, but international borders, as well, even without being publicly traded.

What do you anticipate will be the role of the courts?

Well, the first answer to that is, I don’t know if it’s going to be the courts moving this all along. It may be arbitration. It may be mediation. We don’t know. There are contracts that stipulate, that require, that the disputes be dealt with outside the court system by arbitrators. And the reason why I find that to be relevant to this discussion is that when you’re dealing with something as complicated as carbon capture, green technology, there aren’t a whole heck of a lot of people who have expertise. Even if we find such people, they may not be judges in the court system. It may be that the model people will be seeking to apply is to obtain specialists who are immersed in green technology, know it backwards and forwards, and have actually been part of the industry or at least have been part of the implementation of the applicable legal framework, or have written articles about it in scholarly works and that sort of thing, who can function as arbitrators if there are issues, if there are disputes. Or perhaps such people can function as mediators to seek to bring parties together, again if there are complicated disputes over some of this technology and the way it’s being implemented.

The Role of the Courts in Advancing Carbon Capture Technology

So that’s number one– that it might not be in the courts at all. Number two, is antitrust law. And I think that we have to name this, which is that traditionally in the beginning, cutting edge industries never have enough competition. It’s always a limited point where it begins, and then it blossoms. And between beginning and blossoming, there is a point at which some of the competitors dominate others. That can mean they dominate a market. And they may dominate a market in a way that might technically run afoul of the antitrust laws.

What I’m hopeful about is that both government regulators and the courts will see the need to promote these environmentally-friendly industries, these new technologies. I am hopeful they will understand that at least for a certain period of time, until the industry shakes out, there may be some close calls about anti-competitive or issues or some kind of relation between the way these things are being implemented state by state, that might conflict. The courts need to find a way and the regulators need to find a way of working with business, not against it, to make sure that this gets implemented properly.

How does the Nissenbaum Law Group approach this kind of representation?

Well, what we try to do is be collaborative with our clients. We’re serving our clients’ needs in the sense that if the client needs to get in touch with us, we want them to reach out to us. We are interested in moving as quickly as they need us to move. There may be instances where they don’t need us to do anything and we’re just on standby. There may be other instances where they have multiple emergencies.

That’s the nature of beginning an industry. That’s the nature of being involved in something that’s cutting edge. There aren’t clearly defined rules for how these businesses should be put together in terms of creating a market, in terms of their cash flow, in terms of their loan facilities. And what we try to do is let the client lead us wherever it needs us to go and then use creative solutions to help them.

You know, it doesn’t take a genius to say no. And I’ve always kept that in the back of my mind and our law firm generally has that approach, which is, we’re trying not to say no to things the client wants to do. We’re trying not to say no to these ideas they have to implement an untested technology. Instead, we try to find a way to yes. Obviously, we’re lawyers and so there are times we’re going to say no because something is just illegal, or something is legal but it’s so risky and it can create such liability that it’s not worth doing and you may hear that from us, but we also try to give alternate solutions. The third alternative. And we find that clients appreciate that.

Being Part of the Solution to Climate Change

Clients generally are not just looking for us to give them one-word answers. They really want to engage with us in a collaborative effort to work through the legal problems and find solutions that may not have been thought of before. That’s really what our firm tries to do, especially in this area.

And I guess the final thing that comes to mind is that our firm is really proud to be part of this. And we’re proud help people taking a risk by starting these companies, by engaging in this technology. There are no guarantees that they will succeed and yet they’re putting everything into it, and if we can be part of that, it’s something that would really be a privilege for us because it would be more than just practicing law. It would also be our firm engaging in activities that just might be part of the solution to climate change, generally.

Thank you so much, Gary. If people want to reach you, how can they do that?

The best way is by email. My email is gdn@gdnlaw.com. If you want to call us, the best number is 908-686-8000.

Thank you.

Legal disclaimer: The information contained in this interview does not constitute legal advice, nor a legal opinion. It should not be relied upon in any specific situation. The reader is urged to consult an attorney of their choosing with respect to any legal question they may have.

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Contact the Nissenbaum Law Group to schedule an appointment at 908-686-8000 or feel free to use the following form to e-mail us. Please include as much information as you can to ensure that we are able to handle your request as quickly as possible.

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