Environmental Due Diligence - Counting Carbon

09/15/2009

In winter 2006, Natural Resources & Environment published an article we wrote entitled “Transactional Environmental Due Diligence: What Diligence is Due?” Our basic thesis was that parties to transactions involving real estate should consider all pertinent environmental factors and not simply apply the Superfund “all appropriate inquiry” standard prescribed by the U. S. Environmental Protection Agency (EPA). 40 C.F.R. pt. 312. Since that time, more and more public attention has been focused on climate change and control of greenhouse gases (GHGs), and our society is becoming “carbon constrained.” With this public attention have come legal developments that make it especially appropriate to consider expanding the scope of environmental due diligence to address assets and liabilities created by carbon constraints.

This article provides background information on the concept of carbon constraints and available options to reduce carbon. It then discusses how carbon constraints create assets and liabilities and makes suggestions as to how to identify those assets and liabilities through due diligence.

Published in Natural Resources & Environment, Volume 24, Number 2, Fall 2009. © 2009 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.

To read the full article, click on the PDF below.

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