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Implications Of West Virginia v. EPA On Proposed SEC Climate Rules – Climate Change



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The Supreme Court, in West Virginia 
v. EPA, effectively limited the ability of the EPA to
issue significant regulations designed to address climate change
absent further Congressional action.  And any Congressional
legislation on this issue has, to date, been stymied by resistance
from individuals within the razor-thin Democratic majority
(especially Senator Manchin (D-W.V.)).  This decision has
basically removed one of the key administrative and regulatory
tools that the Biden Administration was planning to use in
furtherance of its climate agenda. 

This development thus places a greater emphasis–and greater
burden–on the SEC’s proposed mandatory financial disclosures
regarding climate change, as that regulatory rule-making by the SEC
remains (for the moment) an available tool for the Biden
Administration to achieve its climate goals.  In effect, the
SEC’s proposed mandatory climate disclosures–which will have,
at best, an indirect impact on actions taken to combat climate
change–have now become one of the primary weapons in the Biden
Administration’s arsenal.  This suggests that the
SEC’s proposed rules will likely be framed in as robust a
manner as possible, in order to advance the Biden
Administration’s climate agenda to the maximum possible
extent.

However, the reasoning behind this decision by the Supreme Court
suggests, as many commenters have predicted, that the new
conservative super-majority will seize opportunities to limit the
role of the administrative state and regulatory agencies generally.
 And the SEC’s proposed mandatory climate disclosures are
yet another example of a far-reaching regulation apparently without
explicit Congressional authorization–the precise scenario to which
the Supreme Court’s current majority has expressed considerable
skepticism.  As has been amply demonstrated by the statements
and actions of various concerned parties–including Republican SEC
Commissioners–ever since the SEC announced that they would
consider issuing such a rule, the proposed mandatory climate
disclosures will confront a challenge to their very existence, and
the various legal critiques proffered may well find receptive ears
in the judiciary.  So, the SEC’s proposed mandatory
climate disclosures, which are now one of the Biden
Administration’s few remaining potent regulatory tools, may
themselves be vulnerable to legal challenge in the courts.  It
should be anticipated that a lawsuit challenging the legitimacy of
these climate disclosures will be filed as soon as the regulation
is issued, and only time will tell whether, and to what extent, the
climate disclosures will withstand judicial scrutiny and survive as
regulations.

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