Guzzle no moreOur federal court win endsfree ride for biggest SUVs.

See page 2

A force for goodNew book callsEnvironmental

Defense “a model of socialinnovation.” See page 7

Vol. 39, No. 1 January 2008

The nations of the world gathered inBali recently to negotiate a new

global warming treaty to follow Kyoto,but all eyes remained on the UnitedStates. America is closer than ever tojoining the fight against global warmingat last, with a bipartisan climate bill mov-ing through the Senate. EnvironmentalDefense played a key role in buildingsupport for and strengthening that bill,America’s Climate Security Act.

Opponents like Senator JamesInhofe (R-OK), having lost the scientificargument, now argue that addressingglobal warming will wreck the economy.Anticipating this attack, we undertookthe broadest economic assessment todate of global warming policy and cameup with a finding that startled even us:

The cost of capping greenhouse gasesover the next two decades will have almost noimpact on U.S. economic growth.

Our findings were announced just asthe Senate took up the bill, adding mo-mentum to the discussion. California’slargest electric utility, PG&E, testified insupport of the bill, asdid our president FredKrupp and other envi-ronmental leaders.Introduced by SenatorsJoe Lieberman (I-CT)and John Warner (R-VA), the measure estab-lishes a cap-and-tradesystem and energy effi-ciency requirements. Itwould cut greenhousegas emissions about 19%(from 2005 levels) by2020 and 63% by 2050.

“This bill will putAmerica on track to

Fate of global warming actionrests with the SenateOUR STUDY PROVES LEGISLATION WON’T HARM THE ECONOMY

avoid the worst consequences of warm-ing,” says our national climate campaigndirector Steve Cochran. With our part-ners, we secured greater short-termreductions than in an earlier version ofthe bill and won provisions that allowthe 63% long-term goal to be strength-ened. We want 80% reductions by 2050,the level scientists say is needed.

Our groundbreaking economic an-alysis reveals that the costs of such actionare affordable. Economist Dr. NathanielKeohane synthesized for the first timethe findings of state-of-the-art economicmodels and found that the cost of a cap-and-trade policy like the Lieberman-Warner bill will be almost immeasura-ble—less than 1% of U.S. GDP by 2030.Even household electricity bills—wherethe impact would be greatest—willincrease by less than $10 a month.

“Nothing in the numbers supportsthe doomsayers,” notes Keohane. “Wecan afford to cut greenhouse gas emis-sions. Doing nothing would be the mostexpensive choice.”

Refuge for a rare turtle

Governorsto Congress:‘Your turn’

A year ofvictories forthe planet

Missouriwetlandssaved

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2 Environmental Defense Solutions

Editor: Peter Klebnikov

Environmental Defense, 257 Park Avenue South,New York, NY 10010. Main number 212-505-2100.

Membership questions: Call 800-684-3322 oremail members@environmentaldefense.org

Mailbag: Mail to address above, call 800-927-6464 oremail editor@environmentaldefense.org

©2008 Environmental Defense. Publishedbimonthly at New York, NY. ASSN 0163-2566

New York • Austin • Boston • Boulder • Los AngelesRaleigh • San Francisco • Sacramento • Washington

Project offices: Beijing, China • Bentonville, AR

Online at www.environmentaldefense.org

Environmental Defense, the court alsoordered the Department of Transpor-tation to develop new mileage standards“as expeditiously as possible” that takeinto account the benefits of reducingglobal warming pollution.

It was the third federal court rulingin recent months ordering regulators to

take climate changeinto account. Wewere party to allthree suits.

The latest casewas argued jointly byCalifornia deputyattorney generalSusan Fiering andour counsel SeanDonahue on behalfof 11 states and fourenvironmentalgroups that had filedsuit. Technical com-ments submitted byour experts were

cited by the court more than 30 times.The decision comes at a pivotal

time, with Congress taking up discus-sion of climate change. Said our attor-ney Vickie Patton: “Science has demon-strated a compelling case for action onglobal warming. Now the law is finallycatching up.”

A federal appeals court on November 15struck down the Bush administration’sproposed fuel-economy standards for lighttrucks and SUVs. The court ruled that the23 mpg average standards for 2008-2011are overly lax and improperly exemptedlarge vehicles like the Hummer H2.

Relying heavily on analysis by

the fastest route to the reductions sci-entists say are necessary in a way thatmakes sense for the economy. Thebill’s declining cap, with strong earlytargets, will unleash the entrepreneur-ial spirit we need to develop the bestlow-carbon technologies.

Twenty-seven Fortune 500 compa-nies, from DuPont to General Motors,

have joined us in calling for strong cli-mate legislation. These hard-nosedbusiness people have concluded that anationwide carbon cap will be anengine for economic growth.

By acting now, the United Stateswill have the moral credibility to askother major emitters, like China, to

move quickly to control theirgreenhouse gas pollution. Until wetake the lead, no one seriouslybelieves these nations will feelpressure to act.

The worst thing Congress cando is delay. If we delay by just twoyears, we would have to reduceemissions 4% a year instead of2%—twice as fast—to achieve thesame reduction by 2020.

By January 2030, U.S. grossdomestic product is projected todouble to $26 trillion. UnderAmerica’s Climate Security Act, thecountry will reach that benchmark afew months later, according to aconservative forecast. A few monthsto avoid catastrophe is a small priceto pay. Let’s move now!

On my recent visitto Capitol Hill, asenator button-holed me: “Whydo we need tostart cutting glob-al warming emis-sions so aggres-sively today?” he

asked. First, I said, if we don’t actfast, we will have to make steeper,more costly reductions later.Second, the sooner we start, thesooner China will act to control itscarbon emissions. And third, send-ing a strong signal to the businesscommunity will put new, low carboninnovations on the fast track.

The Lieberman-Warner climatebill now under debate in the Senaterecognizes the urgency. As I testifiedin a recent Senate hearing, Ameri-ca’s Climate Security Act provides

Why we support America’s Climate Security Act

WHERE WE STAND By Fred Krupp, President

–––––If we wait, we’ll have to cut

emissions twice as fast

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Gas-guzzling SUVs and light trucks comprise about half of theU.S. auto market.

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Court to government: Close SUV mileage loophole

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American International Group (AIG)will be paying farmers in two of

China’s poorest provinces to combatglobal warming by storing carbon,thanks to a project by EnvironmentalDefense.

Two years ago, our economists Dr.Dan Dudek and Dr. Zach Willey beganworking in Xinjiang and Sichuanprovinces to promote climate-friendlyagricultural production.

The various practices also reducewater use, provide biogas from agricul-tural and human wastes for cooking andlighting, and stop the spread of desertifi-cation by planting native trees.

The projects, a glimpse into thefuture, will keep 310,000 metric tons ofcarbon dioxide out of the atmosphereover the next three years—roughly halfthe total emissions attributable toAIG’s global operations.

As part of a plan to reduce its cli-mate impact, the company will retirethe credits it earns for the reductions inChina, keeping that carbon permanent-ly out of the atmosphere.

“This agreement reduces pollutionand brings badly needed income toChina’s rural farmers,” says Dudek. “Italso demonstrates the power of a car-bon market.”

3www.environmentaldefense.org

“In state after state we’re taking action. Now it’s time forCongress to act.” Three governors: conservative RepublicanJon Huntsman, Jr., of Utah, Republican ArnoldSchwarzenegger of California and Democrat BrianSchweitzer of Montana have come together to deliver thismessage in an ad campaign by Environmental Defense tobe aired on TV sets across the nation.

It’s the first time such a political-ly diverse group of governors hasappeared in an ad sponsored by anenvironmental group to call on Con-gress to act. Initially the ad will run in11 states and the District of Columbia.It is part of our hard-hitting campaignto counter a handful of industry groupsspending millions to stop Congressfrom passing climate legislation.

To increase pressure on the federalgovernment, Environmental Defense hasworked with the states to demonstratethat cutting greenhouse gases is achiev-able and doesn’t harm the economy. Wecosponsored legislation in California thatcaps greenhouse gas pollution and inFlorida recommended ambitious initia-tives, adopted by Governor CharlieCrist, to curb global warming pollution.

Our campaign also includesgrassroots efforts in key states. SenatorMax Baucus (D-MT) signed on to thebill after we organized support fromthe Montana Grain Growers Associa-tion. Hard political data helped con-vince others: A survey we commis-sioned by Republican pollster WhitAyres shows that 57% of independentvoters want greenhouse gas regulations.

The governors were not paid fortheir appearance in the ad, whichreflects their impatience at the lack offederal leadership. As GovernorSchweitzer told The New York Times:“Here’s a novel concept for Congress:Do something. Anything. Move!”

View the ads and learn about our cam-paign at environmentaldefense.org.

Governors to Congress:

DO SOMETHING ON CLIMATE

Governor Arnold Schwarzenegger ofCalifornia (R)

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In rural China, a carbon storage and tradingproject is a model for the future.

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Environmental Defense Solutions4

A green deal as big as Texas

Private equity firms Texas Pacific Group and KohlbergKravis Roberts decided not to proceed with their $45 bil-lion bid to acquire TXU, Texas’s largest electricity produc-er, until reaching an agreement with us on environmentalimprovements.

Last year TXUannounced plans tobuild 11 old-fash-ioned dirty coalplants. We sued thecompany and chal-lenged its plans inthe state legislatureand on Wall Street.Investors took noticeand the company’sstock fell.

The buyers met with us to hammer out the historicdeal. At our insistence, they agreed to cancel plans foreight coal-fired power plants and adopt an unprecedentedset of environmental initiatives.

Wal-Mart sees the light

From our newoffice in Benton-ville, Arkansas—Wal-Mart’shome—we’re help-ing the world’s

largest company reduce its environmentalfootprint. We’re working with the retailgiant to reduce packaging, cut per-storeenergy use and boost Wal-Mart’s sales ofcompact fluorescent light bulbs to 100 mil-lion annually. By turning off engines whiletrucks are being loaded, Wal-Mart isreducing emissions by an amount equal totaking 20,000 cars off the road for a year.

Novel plan revives embattled fish species

Gulf of Mexico red snapper are com-ing back after a fishery managementapproach we advocated was adopted.Catch shares allow profitable fishingyear-round while capping the totalcatch and assigning each fisherman apercentage share. We helped designand build support for the program,which replaces old rules that restricted

fishing to certain days and forced crews to throw back tons ofdying fish. With the new rules, snapper prices are up by one-thirdand bycatch, the unintentional killing of fish, has dropped 80%.

–––––The TXU victory is “this year’s huge

environmental coup.”

—U.S. News & World Report, November 19, 2007

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THE YEAR IN R2007

Defending the environment by reforming the Army Corps

The U.S. Army Corps of Engineers hasmismanaged many projects, few moreconspicuously than the Mississippi RiverGulf Outlet (Mr. Go), a little-used ship-ping channel. By destroying cypressswamps that had provided a buffer againststorms, Mr. Go funneled Katrina’s stormsurge into New Orleans.

This fall, after we assembled the evi-dence and pressed for action inWashington, Congress passed major waterlegislation that shuts down Mr. Go and calls on the Corps to submit controversialprojects to independent review. “We’re pressing for the Corps to start workingwith nature, not against it,” said our general counsel Jim Tripp.

A year of Supreme Court victories

In a historic decision, the U.S. Supreme Court decreed that EPAcannot sidestep its authorityto regulate greenhouse gasemissions. The decision willhasten progress against globalwarming. A second ruling, inEnvironmental Defense et al.v. Duke Energy, upheld a keyprovision of the Clean AirAct that requires old powerplants to install modern pollution controls when they expand.That immediately emboldened local communities to demandpollution reductions and affected dozens of plants in the Southand Midwest where lawsuits are pending.

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Protecting an underwater wilderness

We helped design and win approval for the first interstatesystem of marine parks, stretching from North Carolinato the Florida Keys. The 500,000-acre network compriseseight tracts of stunning deep-water corals that serve ascritical habitat for 73 species of grouper, snapper and tile-fish. These fish have been overfished for a century. Thenew network complements reserves we helped establish

earlier, protecting shallow reef habitat in areas such as Florida’s Dry Tortugas.

–––––“Environmental Defense has been a critical

partner and resource in our efforts to make

New York a truly sustainable 21st century city.”

—Michael R. Bloomberg

Mayor of New York City

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N REVIEW

FOR ALLIES, A BIG YEAR AS WELL

Our allies recorded significant victories in 2007. Among the notable wins:

• Ruling for NRDC, a federal court ordered the U.S. Navynot to use sonar in the biologically rich waters off SouthernCalifornia until questions over likely harm to whales, dol-phins and other marine mammals can be resolved.

• With its The Heat is On campaign, the League ofConservation Voters has raised the profile of globalwarming in the presidential elections. It also set up anonline vote tracker to alert the public in real time onhow federal legislators vote on environmental issues.

• Grizzly bears in the Yellowstone region were removedfrom the endangered species list following extensiverestoration efforts led by the National WildlifeFederation.

• The Union of Concerned Scientists’ Scientific IntegrityProgram countered political interference in government-sponsored scientific research.

Greening the Big Apple

New York City Mayor Michael Bloombergannounced a plan we helped develop that puts NewYork on track to become the nation’s greenest city.The centerpiece of the 127-point “greenprint” is acongestion pricing proposal that would charge driversto enter the busiest part of the city during peaktimes. We helped pioneer the idea, which if approvedin Albany will make the air much healthier. We alsohelped lead a coalition of 120 health, business andcivic groups to support the plan.

Texas water law is a model for the West

As the West enters a recordeighth year of drought, cities,agriculture and industry arevying for scarce water, oftenleaving too little water inrivers to keep fish andwildlife healthy. Now Texashas become the first state tolegally protect natural riverflows. We worked with water users to craft a proposal for thelegislature and helped push it through—by just two votes. Thenew law establishes a method to set minimum flow require-ments for every river in the state, including the seasonal flood-ing and other natural processes that rivers, bays and estuaries—and their wildlife—need to thrive.

Leading corporations join

us on global warming

EnvironmentalDefense helpedlaunch the U.S.Climate ActionPartnership(USCAP), an alliance of major corpora-tions and nonprofit groups dedicated toCongressional passage of a national capon greenhouse gas emissions.

The powerful coalition resultedfrom initial discussions amongEnvironmental Defense, GeneralElectric and World Resources Institute.USCAP has grown to include 27 corpo-rate members from virtually every sectorof the economy and all 50 states.Together, we’re calling for a market-based cap to reduce emissions 60% to80% by 2050.

A few of the results made possible by your support

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With America’s nonprofitsundergoing rapid change, a

new book names EnvironmentalDefense as one of the country’smost successful. Forces for Good: TheSix Practices of High-ImpactNonprofits calls us a model of socialinnovation.

Authors Leslie Crutchfieldand Heather McLeod Grant firstset out to identify the key character-

istics that make organizations effective. They surveyed thou-sands of opinion leaders before selecting 12 groups that haveachieved high impact. The best, they say, are run by socialentrepreneurs who are “highly adaptive, innovative leaders.”

The authors identified six practices common to the 12exemplary organizations:• Work with government and advocate policy change • Harness market forces and see business as a partner • Convert supporters into evangelists for the cause • Build networks, treating other groups as allies • Adapt to the changing environment • Share leadership, empowering others to be forces for good

Environmental Defense is the only environmentalgroup in the dozen that includes Habitat for Humanity, TheHeritage Foundation and Teach for America. We were sin-

Environmental Defense Solutions6

In the vanguard of changeNEW BOOK HAS HIGH PRAISE FOR ENVIRONMENTAL DEFENSE

Our activists help save a Caribbean gemsupplies, destroyed coastal veg-etation and jeopardized thehome of more than 40 rarespecies, including the PuertoRican woodpecker and theWest Indian whistling duck.

Our policy analystRamon Cruz joined with part-ners to warn of the threatthrough our Action Network.Nearly 100,000 supporters sentmessages of concern. We alsopublished educational materialsto alert Puerto Rico’s residents.

With political forces in the PuertoRican Senate blocking this conservationinitiative, Governor Aníbal Acevedo Viláissued an executive order preserving thecorridor in October. Over the next eight

Subtropical rainforests, wetlands, beachesand coral reefs along the eastern cornerof Puerto Rico’s main island are finallygetting the protection they need, thanksto a coalition formed by EnvironmentalDefense and allies.

The new 3,240-acre NortheastEcological Corridor will preserve one ofthe Caribbean’s last great wild areas andhelp protect the adjacent El Yunque rain-forest. The corridor features wetlands cru-cial for hurricane protection, a rare biolu-minescent lagoon and a key nesting areafor the endangered leatherback sea turtle.

The Four Seasons and Marriotthotel chains had sought to build mega-resorts with more than 3,000 units andfour golf courses on the site. The devel-opment would have compromised water

gled out for pioneering the use of market forces:“Although Environmental Defense has achieved enor-

mous legal victories on behalf of the environment, today it isbest known for introducing market-based strategies that helpchange corporate behavior. Environmental Defense’s cap-and-trade program was a key component of the Clean AirAct...and now serves as an important model in the fight toreverse climate change.”

By leveraging corporate partnerships, the authorswrite, “Environmental Defense has even greater impact. Itis strategic about partnering with high-profile corporationsthat can serve as early adopters of a new social innova-tion—which it can then replicate throughout an entireindustry, creating even more positive social change.”

Crutchfield and Grant say the 12 nonprofits theyprofiled are in the vanguard of social change and havetruly become forces for good.

FORCES FOR GOOD: The Six Practices of High-Impact Nonprofits; LeslieR. Crutchfield and Heather McLeod Grant; Copyright © 2008 by JohnWiley & Sons, Inc. All rights reserved. This material is used by permis-sion of John Wiley & Sons, Inc. For more information, visitwww.forcesforgood.net.

months, the government will develop amanagement plan, which may incorpo-rate small-scale ecotourism.

Cruz said the victory proves “you canreconcile conservation with responsibleand sustainable development.”

Endangered leatherback turtles give the new ecologi-cal reserve a five-star rating.

–––––Singled out as a

model of social innovation–––––

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reasoning” and for “manipulating models and changing defi-nitions when necessary to make the project seem compliantwith the Clean Water Act.” He ordered the Corps to cease

construction, tear down what’s beenbuilt and restore damaged wetlands.

Corps projects over the yearshave separated the Mississippi, origi-nally the largest wetland in NorthAmerica, from 90% of its floodplain.

But reform is at hand. Pressed byEnvironmental Defense and allies,Congress recently overrode a presiden-tial veto and passed the WaterResources Development Act, whichcalls for stronger oversight of Corpsprojects and restoration of wetlands incoastal Louisiana and Mississippi.

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Acting to protect migratory birds and fish, we scored a courtvictory that preserves Missouri’s last significant floodplain stillconnected to the Mississippi River. In September, a federalcourt halted a flawed Army Corps ofEngineers plan to wall off and drain80,000 acres of fish and wildlife habitat.

The St. John’s Bayou-New MadridFloodway Project, a $112 million leveeand pump, “would have drained morewetlands than all those drained by U.S.developers in an entire year,” said ourgeneral counsel Jim Tripp. It would nothave added any significant flood controlprotection.

Ruling on our suit, U.S. DistrictCourt Judge James Robertson berated theArmy Corps for “arbitrary and capricious

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Victory on the Mississippi

Back then, no one did;the modern environmen-tal movement was in itsinfancy. Educated atHarvard Law School,Graff learned quickly.Soon he was chalking upvictories and pioneeringwater-marketing dealsthat allowed farms andcities to meet their needswithout dammingCalifornia’s wild rivers.

Graff recentlyreceived the Jean AuerAward for his lifetimedevotion to restoring the Bay-Delta, buthis work is far from over. Years of record-high diversions of water to cities andfarms have contributed to severe declinesin the estuary’s fisheries, including thenear-extinction of Delta smelt, a key-stone species. Collapse of the Delta’slong-neglected levees could endanger theregion’s water supply.

As part of the solution, Environ-mental Defense favors alternatives to

new dams, such as water conservation,recycling and purchasing supplies on theopen market. “If a resource is scarce, weought to put a price on it that reflects itsvalue,” explains Graff.

As Graff sees it, the current crisisoffers California an opportunity to bettermanage its water. “We cannot repeat thewater wars of the past,” he says. “Wehave to find a way to work together, orwe will all lose.”

Astark reality was brought home toCalifornians this year when a federal

court ruled that thirsty cities and farmsmust cut back on the water they take fromthe ailing San Francisco Bay-Delta. Themessage from the court: Protect the Delta’secology. “Our water system is broken,unreliable and in crisis,” declared GovernorArnold Schwarzenegger.

The ruling increased the pressure onall sides to meet water supply needs for thestate’s growing population without devas-tating the environment. The Schwarzen-egger administration tapped Environmen-tal Defense staff to serve on key expertpanels to protect the Delta ecosystem aswell as its communities and fragile levees.

Heading up our efforts is Californiaregional director Tom Graff. This is famil-iar territory for Graff. Water officials havecalled him “the brains behind the environ-mental movement.” Others, like CaliforniaLawyer, just call him “the Godfather.”

In 1971, Graff founded our firstCalifornia office on the third floor of aformer fraternity house in Berkeley. “Wereally didn’t have a plan,” he concedes.

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Tom Graff: ‘The Godfather’Bringing warring water factions together

EnvironmentalHERO

Graff has helped create a better future for California.

Our court win saved 80,000 acres of wetlands.

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257 Park Avenue SouthNew York, NY 10010

Address Service Requested

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Totally chlorine-free 100% recycled (75% post-consumer) paperEnvironmental Defense

In 2006 the averageAmerican consumed

4.4 pounds of shrimp,making the tasty crus-tacean our most popu-lar seafood. Thanks tonew standards wedeveloped with Weg-mans supermarketchain, this delicacy justgot safer. In OctoberWegmans began sell-ing only fresh farmedshrimp that meetsthese rigorous healthand environmental requirements.

About three fourths of shrimpconsumed in the U.S. are farmed, mostlyin Asia and Latin America, where stan-dards are often lax. According to TheNew York Times, the FDA inspects lessthan 2% of all imported seafood. Weg-mans sought our help because shrimpaquaculture operations can destroyecosystems and contaminate shrimp.

The standards we developed re-quire farmed shrimp producers to elimi-nate the use of antibiotics, pesticides andfungicides, avoid damaging sensitive wet-land habitats and treat waste water. An

auditing system will monitor progress.Wegmans, a family-owned chain, haslong been committed to sustainability.

By demonstrating the benefits ofstrong standards, we expect the policywill be a model for the industry. “We’veraised the bar for farmed shrimp produc-tion,” said Gwen Ruta, our director ofCorporate Partnerships. “Now it’s timefor other large seafood buyers to flextheir purchasing muscle and make theseimprovements in their supply chain.”

You can find eco-friendly farmedshrimp at all Wegmans markets. Visitwww.environmentaldefense.org/shrimp

Finally, safer farmed shrimpGreener catalogsbring happierholidays

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Wanted—a holiday from catalogs.

This holiday season, companies like Dell,L.L. Bean, Victoria’s Secret and Williams-Sonoma are using recycled paper in theircatalogs, reducing the energy, pollutionand number of trees cut down to make the19 billion catalogs that overfill Americans’mailboxes each year. EnvironmentalDefense helped spark the change in 2001when we convinced Norm ThompsonOutfitters to become the first mainstreamcataloger to use recycled paper.

That got others involved, and thefollowing year we and our allies unveileda common vision for transforming thepaper industry and protecting forests. Wealso developed the Paper Calculator(papercalculator.org), which quantifies thetrees and energy saved and has influencedcompanies from Staples to Harry Potterpublisher Scholastic to go recycled.

Now a new online service, catalog-choice.org, helps consumers slash catalogwaste. Developed by the Ecology Centerwith the National Wildlife Federationand NRDC, the free tool allows individu-als to decline catalogs from several com-panies at once with just a few clicks—nota bad holiday present for the planet.

Wild-caught shrimp are increasingly rare on American tables.

As an alternative to the traditional family foundation,consider the Environmental Defense Donor AdvisedFund. Here’s why:

It’s easy to use. We take care of the paperwork.It’s flexible. Give to any qualified charity.It’s tax-free. Give with no additional tax burdens.

And best of all, you’ll be contributing to a betterworld to pass on to your children. For more infor-mation, call us at 1-877-441-7975 or email donoradvisedfund@environmentaldefense.org.

SIMPLIFY YOUR GIVING

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