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Az use of lawsuit settlement for climate initiative draws fire

Critic: Not fair for neighborhoods

PHOENIX – Arizona wants to use $1 million from an environmental protection lawsuit settlement with a major manufacturer to help fund a regional initiative on climate change. State officials say the idea has big environmental benefits but it’s not without controversy.

A community leader has gone to court, saying the funding plan shortchanges inner-city neighborhoods. That’s after an elected state official questioned the propriety of the planned payment to the Western Climate Initiative.

At issue is the proposed settlement of a 2004 lawsuit in which state regulators accused Honeywell International Inc. of water quality, waste disposal and other environmental violations at a Phoenix facility where it makes aircraft engines on a site next to Sky Harbor International Airport.

The settlement calls for Honeywell, a conglomerate based in Morris Township, N.J., to pay a $5 million civil penalty plus provide $1 million to the Western Climate Initiative, a partnership of Western governors from U.S. states and Canadian provinces.

Administered by the Western Governors Association for the participating governors, the climate initiative’s work includes developing a cap-and-trade program to limit greenhouse gas emissions.

According to figures provided by WGA, the climate initiative so far has awarded contracts totaling more than $1 million for technical analysis and other work, with the money coming from $2.1 million raised from member states and private sources.

The money already received includes $580,000 from a settlement between New Mexico and DCP Midstream, a Denver-based natural gas company, over air quality violations at gas processing plants.

Both the money from the New Mexico settlement and the $1 million from Honeywell in the Arizona settlement involved so-called “supplemental environmental projects,” or SEPs.

Frequently included in settlements of federal and state environmental lawsuits, SEPs are typically intended to provide an environmental gain aside from a settlement’s penalties or required remedial steps.

While SEPs are voluntary and Honeywell has said it agreed to include the climate change provision in the settlement, others have criticized it.

Arizona Corporation Commission member Gary Pierce said the SEP appears to be an attempt to skirt the Legislature’s authority to appropriate state money.

Pierce also said “environmental justice principles” dictate that the $1 million benefit the residents of the area of Phoenix where the Honeywell facility is located.

“They also require that every Arizonan should bear an equal burden for funding the WCI,” said Pierce, a Republican former legislator.

Similar criticism of the proposed funding for the climate initiative is being voiced by the Rev. Jarrett Maupin, a Phoenix community leader and school board member.

“I’m just as concerned about greenhouse gases . . . but it doesn’t have a damn thing to do with groundwater,” Maupin said referring to Honeywell storage and disposal practices involving fuel, solvents and wastes.

“Where is the compensation for the community? Where is the repair for the community?” Maupin asked.

He has asked a judge to let him intervene in the pending court case to challenge the SEP. His request is pending.

Asked about the settlement, Democratic Gov. Janet Napolitano defended the SEP as both legal and effective. She referred further questions to Department of Environmental Quality Director Steve Owens.

Owens did not respond to a request for an interview but defended the settlement’s inclusion in the SEP in a letter to Pierce.

Though his department’s announcement of the settlement cited just the airport facility, Owens said the settlement also covers other Honeywell facilities in Arizona and that the SEP’s environmental benefits can be broad.

“Given the enormous environmental, health and other impacts of climate change on the people of Arizona, it is indisputable that the SEP provides significant benefits for public health, pollution prevention, pollution reduction and environmental protection,” Owens said.

In a statement provided to The Associated Press, Honeywell said the settlement confirms the company’s “commitment to protect the environment and comply with all environmental regulations.”

Owens’ letter said the SEP “grew out of Honeywell’s own interest in addressing climate change” and that the company told state officials how it had helped pay for a major study on reducing greenhouse gases.

However, a Honeywell spokesman said the $1 million provision for the climate initiative “was suggested by the state.”

The Honeywell spokesman, Bill Reavis, declined to comment further on the SEP, including whether state officials insisted on including the $1 million provision or whether the company had any reservations about it.

A University of California Hastings College of the Law researcher, who has studied how states handle SEPs, said Arizona is among many states whose SEP guidelines track federal ones while still giving the state a lot of wiggle room on what they can include in the agreements.

Steven Bonorris, who reviewed documents on the Honeywell SEP, said the $1 million SEP could be seen as a “workaround” to pay for the climate initiative. On the other hand, Pierce’s objection “is a stretch as well” because of the discretion that states have in crating terms of SEPs, he said.

It’s relevant that the Honeywell violations allegedly included an air-quality element, the burning of waste, Bonorris said. “At that point you have some closer – it’s still not ironclad – connection to greenhouse gases and climate change,” he said.

Added Bonorris: “I’ve seen far worse.”

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