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SR-09-08-2015-3J City Council Report City Council Regular Meeting: September 8, 2015 Agenda Item: 3.J 1 of 6 To: Mayor and City Council From: Dean Kubani, Sustainability Manager, Office of Sustainability and the Environment Subject: Reject Fuel Pump Labelling Requirement Recommended Action Staff recommends that City Council receive and file this report to not require labelling of commercial fuel pumps with a climate change message. Executive Summary Following Council direction staff evaluated the feasibility of requiring the labelling of retail petroleum fuel pumps with a message explaining the connection between fossil fuel consumption and climate change in an effort to reduce fuel use by consumers. Staff determined that the requirement would require ongoing staff and funding resources to implement, would be subject to legal risk, and would likely have very limited impact at influencing desired behavior changes. Staff does not recommend that Council consider adoption of an ordinance requiring labelling of commercial fuel pumps with a climate change message. Staff will return to Council early 2016 with a proposal for a comprehensive mid-range and long-range Climate Action Plan that will present an integrated approach to achieving community - wide reductions in greenhouse gas emissions, including those related to automobile fuel use, to achieve Council-adopted emission reduction goals. Background On November 25, 2014 Council directed staff to explore an ordinance requiring the labelling of retail petroleum fuel pumps with a message explaining the connection between fossil fuel consumption and climate change, and return to Council with recommendations and an evaluation of legal risk. Similar Actions by Other Cities On March 11, 2014 the Berkeley, CA City Council referred a Council-member’s proposal for a draft ordinance requiring “climate-conscious warning labels be posted on gas pumps” to the City Manager and advisory commissions for evaluation. In response 2 of 6 to the proposed ordinance the City of Berkeley received a letter from the Western States Petroleum Association (WSPA) dated June 11, 2014 expressing the opinion that such an ordinance, if adopted, would “compel speech in violation of the First Amendment of the United States Constitution.” A copy of the WSPA letter is included as Attachment B. On November 18, 2014 following review of the proposal by Berkeley’s Community Environmental Advisory Commission and the Berkeley Energy Commission the Berkeley City Council directed the City Manager to prepare an ordinance requiring the labelling of fuel pumps. By making a specific link between the consumption of f ossil fuel and climate change at the point of sale, the Berkeley City Council intended to promote behavior changes “to reduce motorized vehicle use, thus contributing to helping to accomplish the Berkeley Climate Action Plan (CAP) goals and helping to miti gate impacts on climate.” A draft ordinance was approved by the Berkeley Energy Commission on January 28, 2015 and by the Community Environmental Advisory Commission on February 12, 2015 and referred to the Berkeley City Council for adoption. The Berkeley City Council has taken no further action to date regarding the proposed ordinance. On November 25, 2014 the San Francisco Commission on the Environment discussed a proposal for a similar fuel pump labelling ordinance and directed staff to draft a letter of support for “the intent of the ordinance” to the San Francisco Board of Supervisors. The City of San Francisco Board of Supervisors has taken no further action to date regarding the proposed ordinance. Discussion The impetus for the fuel pump labelling ordinance proposals in Berkeley and San Francisco came from 350BayArea.org, a grassroots organization based in Oakland, CA advocating for deep cuts in greenhouse gas emissions. Their “Beyond the Pump” labelling ordinance proposal would require gas stations to install warning labels on gasoline nozzles to remind consumers when fueling their vehicles that the use of petroleum fuels contributes to climate change. 350BayArea.org believes that this 3 of 6 approach would be effective at changing consumer behavior and reducing fuel use. The City of Santa Monica has attempted point-of-sale messaging focused on consumer behavior change in the past and found it to be expensive, staff intensive , and minimally effective in changing consumer behavior. To raise consumer awareness about the environmental and economic impacts of using products containing hazardous ingredients, and to encourage consumers to choose less hazardous alternatives, City Council approved the Toxic and Hazardous Household Products Labelling Ordinance in 1994. The ordinance required retailers to place signs on store shelves containing toxic or hazardous substances for sale, including automotive products, paint products, garden products and pool or spa maintenance chemicals. The adoption of this ordinance was met with significant resistance by the California Grocers Association and local retail store owners, and required substantial effort on the part of City staff to launch and implement. Staff conducted a telephone survey and series of focus groups in 1996 to evaluate the effectiveness of the ordinance which indicated that it had little to no awareness in the community and/or impact in influencing purchasing decisions. Based on this information the point-of-sale messaging materials were redesigned, however subsequent evaluations indicated that the program was minimally effective at influencing the desired behavior change. Rigorous implementation and enforcement of the ordinance was discontinued in 2004. One common denominator of effective behavior change campaigns is that the campaign provide a clear and readily available alternative to the action that is being discouraged, and that the campaign be multi-faceted, with advertising in a variety of media and locations, opportunities for consumers to make personal commitments to modify their behavior, incorporation of social norming approaches, and incorporation of incentives and/or disincentives. While effective, these approaches require significant and ongoing staff and funding resources to implement. Requiring a label on a fuel pump discouraging the use of the fuel does not provide the person fueling their vehicle with an alternative action that they can easily take at that time. Also, because it would not include the numerous other components required of an effective behavior change effort staff believes that such an ordinance would likely have very limited impact at influencing 4 of 6 the desired behavior. Potential Legal Risk Any local law that requires private parties to place labels on their retail p etroleum fuel pumps with a message explaining the connection between fossil fuel consumption and climate change would certainly implicate rights protected by the First Amendment and could present legal risks. The United States Supreme Court has long concluded that commercial speech is entitled to First Amendment protections, albeit to a somewhat lesser degree than the protection afforded to noncommercial speech. U.S. v. United Foods, Inc., 533 US 405 (2001). When the government compels a private party to speak, courts apply differing standards of review depending upon the subject of the speech being compelled. Courts are much more likely to uphold governmental regulation compelling speech, if the regulation and the speech being compelled is aimed squarely at disclosing “factual and uncontroversial information” or combating false and deceptive advertisements. On the other hand, if the government compels private parties to carry the government’s “controversial opinions,” such as the government’s view on politics, nationalism, or religion, courts are likely to apply much greater scrutiny. For instance, the Ninth Circuit Court invalidated a California State law (AB 1179), which required each “violent video game” imported into or distributed in California t o “be labeled with a solid white '18' outlined in black,” which must appear on the front face of the game's package and be “no less than 2 inches by 2 inches” in size. The Court found this compelled speech requirement to violate the First Amendment, becau se it is not designed to convey purely factual information or combat consumer deception. Video Software Dealers Ass'n v. Schwarzenegger, 556 F.3d 950 (9th Cir. 2009). Additionally, the District of Columbia Circuit Court recently struck down FDA regulations which required cigarette makers to include color graphics on cigarette packages depicting the negative health effects of smoking, because the court found such graphics to not present purely factual and uncontroversial information and because there was no 5 of 6 evidence that the graphics would directly and significantly lead to a reduction in smoking. R.J. Reynolds Tobacco Co. v. Food and Drug Admin., 696 F.3d 1205 (D.C. Cir. 2012). Legal staff is not aware of a published federal appellate decision addressin g greenhouse gas labelling. Due to the complexities of First Amendment jurisprudence, it is always difficult to predict with certainty how a court would rule in any given case. However, given the strong inclination of many courts to protect First Amendment rights, even in the commercial speech context, any ordinance that compels a private business to engage in speech activities would be subject to legal risk. For the reasons noted above regarding the likely limited efficacy of the proposed ordinance and the potential legal risk, staff does not recommend that Council consider adoption of an ordinance requiring labelling of commercial fuel pumps with a climate change message. Staff plan to return to Council in early 2016 with a final report on the 15x15 Climate Action Plan achievements and a proposal for a comprehensive mid- range and long-range Climate Action Plan that will present an integrated approach to achieving community-wide reductions in greenhouse gas emissions, including those related to automobile fuel use, to achieve Council-adopted emission reduction goals. 6 of 6 Financial Impacts and Budget Actions There is no immediate financial impact or budget action necessary as a result of the recommended action. Prepared By: Dean Kubani, Sustainability Manager Approved Forwarded to Council Attachments: A. November 25, 2014 City Council Minutes (web link) B. Attachment B - WSPA Letter to Berkeley re Fuel Pump Labelling