The Supreme Court overturns Chevron Doctrine: A new era for U.S. climate policy
The recent Supreme Court decision to overturn the Chevron Doctrine marks a pivotal moment in U.S. climate policy, fundamentally altering the dynamics between the executive, legislative, and judicial branches of government. This ruling has profound implications for federal agencies such as the Environmental Protection Agency (EPA) and the Securities and Exchange Commission (SEC), reshaping the landscape of environmental regulation and industry oversight.
Implications for climate policy and agency authority
Established in 1984, the Chevron Doctrine allowed courts to defer to federal agencies' interpretations of ambiguous statutory provisions, provided those interpretations were reasonable. This principle arose from a case where Chevron U.S.A. challenged the EPA’s interpretation of the Clean Air Act, setting a precedent for judicial deference to agencies' expertise. However, in June 2024, the Supreme Court, in a 6-3 decision along party lines, overturned this long-standing doctrine. This ruling shifts the balance of power from agencies to the judiciary, granting courts more authority to question and potentially overturn agency interpretations of laws.
The decision poses significant challenges for agencies like the EPA and SEC, which have relied on Chevron to craft regulations addressing complex issues such as climate change and corporate transparency. Historically, the EPA has used Chevron to justify its climate regulations, leveraging broad mandates under laws like the Clean Air Act to regulate greenhouse gases. Now, with Chevron deference removed, the EPA’s ability to enforce climate policies is weakened, potentially leading to regulatory rollbacks and increased legal battles over the scope of its authority.
The SEC is also affected as it is embroiled in a legal battle over its climate reporting rules, which require companies to disclose their greenhouse gas emissions and climate-related risks. Although the SEC argues it retains authority to mandate these disclosures under the 1933 Securities Act and the 1934 Securities Exchange Act, challengers assert that the SEC has overstepped its authority.
Broader implications across government and industry
The Supreme Court's ruling has shifted the dynamics between the three branches of government, altering the balance of power. With increased judicial oversight, courts now have more authority to interpret laws governing agency actions, moving power from domain-expert agencies to the judiciary. This shift could limit agencies' ability to enact and enforce regulations without explicit congressional authorization. As a result, weakened regulatory oversight might embolden high-emissions industries to challenge environmental rules, potentially stalling progress on reducing carbon emissions and affecting public health.
With courts taking a more active role in interpreting agency authority, Congress may be compelled to draft more explicit legislation to empower or restrict agency actions. This dynamic underscores the importance of legislative clarity in ensuring agencies have the tools to address complex issues like climate change. In response, bipartisan efforts to advance climate policies, such as carbon tariffs, could provide pathways for meaningful climate action, even in the face of judicial challenges.
As we move forward, agencies like the EPA and SEC must adapt to this new legal environment by building strong, evidence-based cases for regulatory action to defend their authority in court. Increased efforts from Congress and the administration will likely be necessary to reinforce climate progress through legislative and regulatory measures. The Supreme Court's decision underscores the complex interplay between government branches and highlights the need for strategic adaptation in the face of evolving legal and regulatory challenges.
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Sources:
1. Bloomberg, “SEC Climate Regulations Spared in Chevron Ruling, Agency Says.”https://news.bloomberglaw.com/esg/sec-climate-regulations-spared-in-chevron-ruling-agency-says
2. ESG Climate News, “ Chevron Doctrine Overturned: What's Next for Climate Rules?.” https://www.linkedin.com/pulse/chevron-doctrine-overturned-whats-next-climate-rules-tim-mohin-pymve/?trackingId=mnJ9Vla%2BS1ib2sQX2MXq4g%3D%3D
