Sustainability Archives - Dawda PLC

Is Legislative Support for Sustainability Initiatives on the Decline?

Editor — Wed, 30 Dec 2020 13:12:43 +0000

For the past 10 years Michigan has created a number of laws that were “sustainability oriented” – intended to promote the development of renewable energy and energy efficiency. Recently, however, there has been a reduction in the number of such bills being proposed. Is this due to economic factors, budgetary constraints, a lack of interest on the part of our legislators, the public’s mood in general, or a combination of all the above?

History

The push to promote renewable energy in Michigan began in earnest in 2002 when Michigan created a tax exemption for businesses with alternative energy property (generally defined as: alternative energy system, alternative energy vehicles and the personal property of an alternative energy technology business). The exemption applied to taxes levied after December 31, 2002 and before January 1, 2013.
In 2008 a spate of legislation was passed that was designed to promote renewable energy, including Act 270 which amended the Michigan Business Tax Act and provided a tax credit to any photovoltaic manufacturing business that entered into an agreement with the Michigan Economic Growth Authority to construct a new manufacturing plant.
One of the larger pieces of “sustainable/green” legislation enacted in 2008 – Public Act 295 – included a modest renewable portfolio standard that was designed to increase the use of renewable energy in Michigan by requiring electrical utilities to source 10% of their electrical production from renewable energy systems such as wind or solar.
In 2010 Michigan revised its construction code to adopt ASHRAE Standard 90.1-2007, which sets forth more energy efficiency requirements than the prior ASHRAE Standard that Michigan relied upon for years.

Recent Developments
Since 2010, the push for sustainability based legislation appears to have tapered off – in fact, it seems to have been put in reverse. For example, two bills introduced in 2011 that initially received a lot of press, have fallen off the radar screen: House Bills (HB) 4286 and 4049.

HB 4286 would have provided a taxpayer with a tax credit equal to 50% of the cost of constructing a “green building”. Similarly, HB 4049 proposed a tax credit for builders of energy efficient homes. However, neither bill made it out of the Committee on Tax Policy.

Moreover, HB 5447, proposed by State House Representative Franz in February, 2012, would repeal Michigan’s 10% renewable energy standard. The bill, however, is opposed by a wide variety of groups so its fate is unclear.

Are these actions (or inactions as the case may be) due to economic factors (we just went through one of the biggest recessions/depressions since 1929)? A shift in concern? Or is it something deeper – such as a growing public distrust along the lines of Arizona SB 1507 which would ban any state sustainability initiatives whatsoever? (An interesting video of the AZ Senate Judiciary Committee hearing on this bill can be viewed here.)

If there is a shift away from sustainability initiatives, it’s most likely due to a variety of factors. Nonetheless, at least one study, performed in Canada, shows that our neighbors to the north are becoming less concerned with environmental issues. If the same thing is occurring in the U.S. and Michigan, it could explain the recent legislative activity that appears to be shifting away from publically funded sustainability measures. Given the impact such a trend could have on “green” and “sustainable” businesses in Michigan, we will continue to monitor it and provide updates.

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Revisions to the Federal Trade Commission “green Guides”

Editor — Wed, 30 Dec 2020 07:19:50 +0000

The Federal Trade Commission (FTC) on October 1, 2012 released the revised “Green Guides“, which is designed to help marketers with describing the environmental attributes of their products, so that advertising is truthful and non-deceptive within the meaning of the law.

Revising the Green Guides has taken many years. FTC employed a national effort to obtain public input and collect industry comments regarding the proposed revisions.

In conjunction with FTC’s Green Guides, the FTC has taken on the issue of defining carbon offsets, the use of green certification and seals, defining of renewable energy and renewable material claims.

FTC Chairman Jon Leibowitz has stated that “the introduction of environmentally friendly products in the marketplace is a win for consumers who want to purchase greener products and producers who want to sell them. But this win-win can only occur if marketers’ claims are truthful and substantiated. The FTC’s changes to the Green Guides will level the playing field for honest business people, and it is one reason why we had such broad support”.

It is interesting to note that these revised Green Guides fail to take on some of the more thorny issues. The FTC failed to provide guidance on the use of the terms “sustainable”, “natural”, and “organic”. The FTC has suggested that the term organic has already been sufficiently defined by the U.S. Department of Agriculture.

A review of FTC’s enforcement history indicates that they have brought claims for deceptive use of the terms; recyclability, and biodegradable. FTC has raised questions regarding the environmental certification program. Given the introduction of these new Green Guides, it is a clear indication that the FTC will increase enforcement activity in this area.

I have written on this topic before and the potential legal pitfalls for companies making environmental representations regarding their products. Careful consideration is necessary when using what I refer to as “eco-logos” as proof of the “greenness” of your company’s products. Given the significance of these issues several blog entries will be posted in the future on various key provisions of the revised Green Guides.

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GSA Seeks Input on Green Building Certifications for Federal Buildings

Editor — Wed, 30 Dec 2020 05:45:18 +0000

Section 436 of the Energy Independence and Security Act of 2007 requires the GSA to review (every 5 years) green building certification systems to identify a system that will encourage certification of Federal green buildings. In 2006 the General Services Administration (GSA) recommended that the U.S. Green Building Council’s LEED rating system be used in the Federal sector for Federal buildings being built with “green standards.”

More recently the GSA issued a report of its evaluation of three different green building certification programs: LEED, Green Globes and the Living Building Challenge. The GSA concluded that while each program has certain relevant applications, none meets all of the Federal government’s needs. Throughout 2012, the GSA’s Discussion Group collected public comments on its evaluation which can be reviewed at the link above.

On February 5, 2013, the GSA published a notice in the Federal Register (78 Fed Reg. 8145), seeking additional comments on the following GSA findings:

Federal reliance on the private sector for the green building certification systems saves government resources.
Federal guidance should be developed that identifies the credits/points that all agencies should focus on. As part of this, the GSA determined that only one system should be relied upon at the agency level and use of multiple systems should be based on a finding that the agency’s structure supports it. The GSA also determined that the systems are flexible enough to develop applications to all building types if the Federal agencies have the right direction on how to use them.
The Federal sector should stay current with the evolution of green building certification systems. As part of this process, the GSA made the following additional findings: that the Federal sector should adopt a new version of a system within one year of its finalization; that the major Federal real property holders should periodically review green building certification systems, and the GSA should coordinate with the Department of Energy and Defense in its evaluation of these systems.
The Federal government should work with green building certification system owners to ensure better alignment with Federal needs.

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Green Guides – Is it Degradable or Compostable?

Editor — Tue, 29 Dec 2020 18:07:41 +0000

In a previous blog we discussed the Federal Trade Commission’s (FTC) updates to the “Guides for the Use Environmental Marketing Claims,” 16CFR260 (the Green Guides) in October 2012. One of the more problematic areas for manufacturers and advertisers that they believe their products are biodegradable or compostable is the confusion over what is the applicable standard to use before advertising this capability.

1. Degradable – Let’s take a brief look at what constitutes degradable according to the FTC’s Green Guides. The FTC takes the position that one needs to clarify in an advertisement whether the product and/or the package is degradable. Degradation can occur through the process of biodegradation, oxo-degradation, oxo-biodegradation, or photodegradation. In any case, it is up to the company that is marketing the product to have reliable scientific evidence that the item in its entirety will break down and return to nature and be degraded into elements found in nature.

To have this positive attribute, degradation of the product must occur within a reasonably short time after customary disposal. As a rule of thumb, items that do not completely decompose within one year after customary disposal should not be advertised as degradable without clarification. Furthermore, if the product does not degrade in a customary disposal (such as a typical landfill) setting, it would be deceptive to advertise this benefit.

Anything short of complete degradation within one year following disposal must be clarified and qualified in the advertisement. These qualifications or limitations on the representation that the product is degradable must be prominent and clearly understandable by the average consumer.

2. Compostable – An alternative to being degradable, are products that are advertised as compostable. Again, the marketer making the claim that the product is compostable must have competent and reliable scientific evidence that all the materials in the item will break down or otherwise become part of a usable compost (such as soil enhancement or mulch) in a safe and timely manner. This decomposition must be done at an appropriate composting facility or in a home compost unit.

It is considered deceptive to not qualify the representation if adding the product to the compost pile will not be broken down in a safe or timely manner. It could also be deceptive if the claim suggests introducing this material into a landfill has environmental benefits.

As a general rule, a marketer cannot represent that its product is appropriate for compost if such a composting facility is not readily available to a substantial majority of consumers where the product is sold. The FTC suggests that such facilities should be available to at least 60% of the consumers.

It would be deceptive under the FTC’s Green Guides if in the process of introducing the materials into a composting facility, the product actually releases toxins or other chemicals which prevents the compost from being usable.

In either case, when a manufacturer would like to advertise that its product is biodegradable or compostable, this should only be done if there is competent and reliable scientific support for such a claim.

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What is the Value of an Environmental Logo?

Editor — Tue, 29 Dec 2020 17:59:11 +0000

When the Federal Trade Commission (FTC) updated the Green Guides in October 2012, it specifically set forth its objections to the misuse of environmental certifications and seals of approval (or logos). The FTC made it clear that from the consumer’s perspective, such certifications and seals of approval are often misunderstood. FTC believes consumers fail to understand the limitations such seals have on evaluating the environmental attributes of a product.

Unbiased, scientific support?

Manufacturers of products should take a closer look at the types of certifications and seals of approval it places on their products and packages. The FTC considers it deceptive to suggest that a product, package or service has been endorsed or certified by an independent third party unless there is nonbiased scientific data, that is accepted in the scientific community that supports that assertion. In addition, the manufacturer must be aware that obtaining third party certification does not relieve the manufacturer of its obligation to ensure that the advertisement of the product are supported by scientific evidence, and that the seal is consistent with the message being communicated by the certification.

Implied Environmental Benefits

If the seal of approval suggests that a product has an overall general environmental benefit without any clarification as to the basis for that certification, this is seen as suspect by the FTC. To avoid such a claim of deception, the manufacturer should, in a clear and prominent way, convey that the seal refers to a specific or limited environmental benefit and it is not an approval of a broad general benefit. This qualifying language must appear within the advertisement and it is not sufficient to refer the consumer to a website for additional details.

Trade Associations

The manufacturer may also need to clarify that the seal was obtained from an industry trade association. If the trade group uses an independent certifier that consents to established testing procedures with an independent auditor, then the use of an industry trade association’s certification may be proper. If the seal of approval refers to an industry association, it must be clear that the product has been certified by an industry certifier, and that certification was not awarded by an independent certifying association.

Industry organizations that control the certification process may be considered by the FTC as deceptive seals of approval. If there is a material connection between the company and the certifying organization it would be deceptive to not reveal this relationship to the consumer. There should be no material connection between the product and the company issuing the seal of approval, without revealing the connection.

Qualifying Statements

Another type of certification and seal of approval that can create confusion among consumers are those issued by membership only associations. The FTC suggests that the use of such seals could be deceptive and that a membership seal should be accompanied with a qualifying statement. An example of such qualifying language is; “our company is a member of the EcoFriendly Association, but it has not evaluated this product”.

So when in doubt, always have sufficient independent scientific data to support any advertisements, even when a product was awarded a seal of approval.

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Pitfalls When Blogging About Green Products

Editor — Tue, 29 Dec 2020 17:54:37 +0000

In previous blogs I commented on the importance of having scientific data to support advertisements for green products. Compliance with FTC’s Green Guides should also be considered when using social media to promote green products.

In October of 2009 the FTC updated the Guide Concerning the Use of Endorsements and Testimonials in Advertising. (16 CFR 255) It is FTC’s position that regardless of whether the endorsement is made by a consumer or an expert, there are still guidelines as to those communications. Just because a green product is promoted in an informal blog or on a Facebook page, the promoter of the product must still disclose any important connection, that exists between the company and the endorser. For example, if the company gave a blogger a free product in exchange for a review, the blogger must reveal that they received the product for free.

If someone blogs about their experience with a green product or service, the communication must include a clarification as to what the average consumer can expect. Merely stating that the blogger’s experience may not be typical, may not constitute a safe harbor from a claim of deceitful advertising by the FTC.

Individuals and companies that rely upon various social media platforms that have significant space restraints (such as Twitter), are also not relieved of their duty to reveal their relationship with the manufacturer and disclose any limitations regarding the product’s positive environmental benefits.

FTC makes it clear that regardless of the casual or informal nature of discussing products in social media, the same burdens of disclosure exists. Bloggers must reveal their relationships with the company and have the same supporting scientific data, as the manufacturer has to support its own advertisements. Blogging and the use of social media cannot be used to promote products in a manner inconsistent with FTC’s Green Guides. As a general rule, a blogger with corporate ties cannot promote a product, if that same communication would be considered deceitful if it appeared in the manufacturer’s own advertisement.

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The Latest Budget and Environmental Tax Credits

Editor — Tue, 01 Mar 2016 10:37:11 +0000

President Obama has several “last times” coming up. Among his most recent “last” was his final proposed budget for the 2017 fiscal year.

President Obama’s budget still has not been enacted. Many of the components of the budget may not survive the upcoming expected legislative wrangling, including the House-Senate conference procedures. But the budget does represent the President’s wish list.

Receiving extra emphasis this year are elements that encourage renewable energy projects. Perhaps most noteworthy is the extension of the renewable energy production tax credit, changing it from needing to be extended every year to be being a permanent tax credit. This would be a complement to the permanent status that Congress afforded the research and experimentation credit.

The production tax credit will affect the following renewable energy production facilities: wind, solar, hydroelectric, geothermal, hydroelectric as well as waste facilities that produce energy like municipal solid waste, landfill gas and biomass.

One caveat: in order to claim these tax credits, production of the facilities must begin by January 1, 2017 except for wind facilities, which must commence construction by January 1, 2020. The tax credit for wind facilities is being phased out, and will reduce each year between now and 2020. The tax credit for solar facilities will also decrease yearly beginning in 2020.

Additional tax credits are proposed for qualifying advanced energy projects, which are defined as products that make substantial changes to existing manufacturing facilities or construct new ones that do the following:

Produce energy from renewable resources
Creates components for use with electric or hybrid vehicles
Creation of electric grids that support renewable energy sources
Creation of blended fuel technology
It will be interesting to see which of these budgetary items will become law and which will end up on the cutting room floor.

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Cranberries: Their Potential Impact on the Environment

Editor — Mon, 01 Dec 2014 16:39:26 +0000

If you just sat down to a delicious Thanksgiving dinner replete with turkey and some sort of cranberry accompaniment, you might be feeling quite satisfied with your food choices.

Cranberries, native to the United States, are enjoying renewed popularity. Cranberries are known to be a good source of various vitamins and minerals. And for those on the antioxidant bandwagon, cranberries pack a nice wallop. In addition, cranberries are efficacious in preventing bladder infections, and at least anecdotally, in curing them, too.

But cranberries are difficult to cultivate and can have a deleterious impact on the environment. Cranberries regularly show up on the “dirty dozen” of organic lists, because they are typically laden with pesticides and other chemicals on their surfaces. The use of these chemicals is necessitated by the cranberry-growing conditions. Moist, wet cranberry bogs offer an ideal growing condition to incubate all sorts of unwanted flora and fauna, like invasive weeds and various bugs, including the cranberry weevil. These species are attracted to the cranberries and receive nourishment from either the cranberry or the surrounding bog.

The danger of the pesticides on cranberries would seem to be one of a personal nature; that is, if you don’t want to ingest the pesticides or other chemicals, then wash off the cranberries, being particularly careful to remove any residue of harmful chemicals. But these chemicals do not stay affixed to the cranberries. The cranberries are grown in bogs that are part of national and international waterway systems. The pesticides that are applied to the cranberries fill up the bog. After the cranberries are harvested, this mix of water and chemicals is then flushed onto the nearby land and connected waterways, becoming part of the effluvial pollutant flow.

Agricultural runoff has been a growing concern throughout the United States. This summer’s algae blooms in Lake Erie appear to be the result, not so much of industrial pollution, but rather the phosphorous runoff from farms that abut rivers flowing to Lake Erie, like the Maumee River.

Agricultural runoff from the cranberry farming is now affecting the waterways of states with high cranberry production, including New England states, as well as Wisconsin.

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