EDITORIAL: Lawsuits against SEC climate risk disclosure rules provide a snapshot of the political divide in US
Quantum Commodity Intelligence – Without wanting to repeat some of the coverage in this issue of Carbon Insights, there is little surprise that the US Securities and Exchange Commission's (SEC's) rules on climate disclosure have been hit with a raft of lawsuits.
Most of the lawsuits were probably written long before the rules came out earlier this month, with a few tweaks in the wording here and there.
They also mark the first time, I am led to believe, that SEC has faced multiple lawsuits from two different sides on an issue – one side against the rules completely and the other arguing that the regulations do not go far enough.
While not surprising, it's quite scary, given the mounting climate crisis, to hear some of the arguments in the filing that has caused a temporary pause in the implementation of the rules.
A filing brought by two oil companies, Liberty Energy and Nomad Proppant Services, and which also included the states of Texas, Louisiana, and Mississippi, as well as the US Chamber of Commerce in the list of petitioners.
"No authority"
"There is no clear authority for the SEC to regulate the controversial issue of climate change effectively," the two oilfield services firms wrote in their petition to the United States Court of Appeals for the Fifth Circuit.
The two companies also said the SEC rules are "arbitrary and capricious", adding that the requirements breach the First Amendment, which protects free speech, by "effectively mandating discussions about climate change".
To be honest, much of those words leave me speechless. How do you respond to that? The first rule of the climate fight club is 'we don't talk about the climate fight club'. But joking apart, because this is obviously serious, to cite free speech to stop talking about something that is so clearly changing this planet on a daily basis: the mind boggles (which may not translate beyond England).
Whatever the outcome of the litigation, it is likely that the regulations as they stand will change, one way or another. And what the lawsuits also show is a snapshot of US climate policy thinking, split pretty much along Democratic and Republican party lines.
With US presidential election polls showing Donald Trump neck and neck with incumbent President Joe Biden, and given the way the US electoral college works in the executive election, the spectre of another Trump presidency is looming.
Analysis by NGO Carbon Brief earlier this month projected that a second Trump presidency would result in an additional 4 billion tonnes of carbon dioxide equivalent (tCO2e) emitted in the atmosphere by 2030, leading to global climate damage of more than $900 billion.
Forget 1.5 degrees C
Even if we take those projections at the far end of expectations, a conservative appraisal still sees billions of extra tCO2 emitted. Carbon Brief admit it may over-state what could happen, but it also noted the projections could also understate what is likely to occur.
"Regardless of the precise impact, a second Trump term that successfully dismantles Biden's climate legacy would likely end any global hopes of keeping global warming below 1.5C," Carbon Brief said.
This would mean that whatever is agreed (or not agreed) at UN climate change talks in the next couple of years is virtually meaningless. I don't think anyone is going to come up with a breakthrough removals technology in the next few years to mitigate those impacts.
But would another Republican president be that much different than Trump? US climate politics, at least when viewed through the lens of the UN climate talks, have always been split over party lines, The likes of former California governor Arnold Schwarzenegger, a distant memory in Republican party environmental politics, has always been the exception than the rule.