Regulatory Pushback: SEC Climate Risk Disclosure Rule and the EPA GHG Reporting Program
Court of Appeals Pauses SEC Climate Disclosure Rule Litigation
The Eighth Circuit Court of Appeals reaffirmed the abeyance (pause) on the Securities and Exchange Commission (SEC) climate risk disclosure rule “to promote judicial economy.” The pause will remain in effect until the SEC “reconsiders the challenged Final Rules by notice-and-comment rulemaking or renews its defense of the Final rules.”
Background: The SEC had stepped away from defending the climate rule in the court case led by Iowa and other petitioners back in March. Democratic state attorneys general stepped in to defend the rule and asked the court to pause litigation.
“The SEC should do its job”: In its decision the Eighth Circuit stated, “it is the agency’s responsibility to determine whether its Final Rules will be rescinded, repealed, modified, or defended in litigation.” These remarks echo criticism from SEC Commissioner Caroline Crenshaw when the SEC Commission announced it was stepping away from defending the rule in court.
What this means: If the SEC decides to voluntarily stay the rules and to not engage in any new rulemaking or defend the Final rules in court, the rule will be able to become active again under a future administration.
EPA Proposes Rule Ending Corporate GHG Reporting Requirements
The Environmental Protection Agency (EPA) released a proposed rule on Friday to drop its Greenhouse Gas Reporting Program which collects carbon emissions data from facilities across industries.
Background: The Greenhouse Gas Reporting Program was created after Congress instructed the EPA to create a rule to capture greenhouse gas (GHG) emissions data from “all sectors of the economy.” Today, the program covers 47 source categories at over 8,000 facilities across the U.S.
Cost cuts: In a statement, EPA Administrator Lee Zeldin stated that the “program is nothing more than bureaucratic red tape that does nothing to improve air quality.” The EPA sees no requirement under the Clean Air Act to collect GHG emission information from businesses and believes this costly function is outside of the agency’s scope of responsibility.
Why it matters: Private companies often rely on the program's data to demonstrate to investors that their efforts to cut greenhouse gases are working.