Demise of the Biden Climate Rule
History is littered with grand designs that never came to pass. Think of Stanley Kubrick assembling index cards chronicling every day of Napoleon’s life for a movie that never got made. Or the 14 miles of tunnels that were dug for a giant particle accelerator in Texas, only for Congress to pull the plug.
The Trump administration is about to consign a less glamorous plan to the list. This one was only a financial regulation, but few projects can have sucked up more time and energy—or come closer to reality.
The Securities and Exchange Commission last week proposed overturning a Biden-era rule requiring companies to disclose emissions data and detail climate-related business risks, from regulations to extreme weather. For many, its 2024 approval came after years of campaigning.
“It’s more like a 20-year journey,” said Mindy Lubber, head of the sustainability nonprofit Ceres. Lubber, an early advocate of climate-related risk disclosures, has been working to rally investors behind the idea since the mid-2000s.
This was always controversial. Some, including current SEC chief Paul Atkins, long argued for a looser view of what counts as material for investors, warning that extra disclosures deter companies from going public. But Lubber’s view gained ground.
In 2010, the SEC suggested companies disclose how they could be affected by climate change. Regulators in other countries went further, while voluntary climate-related disclosures took off. In 2021, the Biden SEC decided to beef up its guidance—starting a procedural brawl for the ages.
Its call for comment elicited 600 letters. That was nothing. The SEC’s 2022 draft rule (it listed 52 staffers who contributed) drew 4,500 responses, not counting copy-pasted letters.
People sweated over those documents. The U.S. Chamber of Commerce spent 141 pages arguing that the proposal was too onerous. A computer glitch meant some respondents had to resubmit.
By the time the SEC had plowed through everything, its rule ran to 300,000 words—that’s the equivalent of “Moby-Dick” plus “The Sun Also Rises”—with well over 3,000 footnotes.
Lawsuits quickly piled up. Most were from Republican states, oil companies and others who said the rule went too far—but some were from greens who said it didn’t go far enough. The Sierra Club, for example, wanted companies to estimate not only their own emissions but those from their supply chains.
The rules never took effect. Under Biden, the SEC stayed enforcement pending an appeals court’s review. Then, after President Trump’s election, the SEC said it wouldn’t defend the rule. Now it is moving to terminate it.
Hard to kill
A resurrection looks improbable. Trump’s deregulatory drive, combined with Supreme Court rulings from the past few years, isn’t just taking aim at individual regulations but curtailing agencies’ power to make rules.
Still, it’s hard to definitively kill a rule that’s on the books. First must come a 60-day comment period. After that? Expect more legal challenges.
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