Climate on trial

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Mar 12, 2024 View in browser   By Jordan Wolman With help from Annie Snider THE BIG IDEA EPA is stepping into legal battles in its attempt to crack down on methane pollution. | AP CLIMATE’S COURT CROSSHAIRS — The Environmental Protection Agency's recently finalized rule to limit methane emissions is reigniting a debate with major implications for the government’s ability to fight climate change. Conservative challengers and EPA critics are angling to strike down the rule, which targets methane pollution from the oil and gas industries, and a novel legal weapon could be employed by red states and fossil fuel interests. The “major questions” doctrine might be called upon in efforts to rein in the EPA’s regulatory authority, as it was in 2022 to nullify a rule on power plant emissions. "It comes up in almost every case now," said Michael Burger, executive director at Columbia University’s Sabin Center for Climate Change Law. "It doesn't seem like there's a particularly strong argument for it, but that's not to say it won't curry favor with some judges." EPA is focusing particularly on methane because it has about 80 times the heat-trapping capacity of carbon dioxide over a 20-year period. The rule for the first time requires fossil fuel companies to upgrade equipment and install leak detection to tackle emissions. Texas Republican Attorney General Ken Paxton launched the first attack against the methane rule in the U.S. Court of Appeals for the District of Columbia Circuit. It’s unlikely he’ll be alone, Niina H. Farah and Lesley Clark report for POLITICO’s E&E News. Industry groups including the Western Energy Alliance, Independent Petroleum Association of America and the American Petroleum Institute are expressing disapproval, even as oil majors such as Shell, BP and Exxon Mobil have indicated support for methane regulation. Legal threats could target the rule’s green light for outside groups to certifiably monitor for “super-emitter” events, the costs and time-consuming nature of compliance, and the assumptions and other procedural questions that went into the rule. But challenges to the agency’s authority could underpin the case against it. The Clean Air Act "is intended to address and mitigate a real and significant threat to human health and the environment through regulation of domestic emissions," Texas officials warned in public comments before the rule was approved. "Agencies have only the authority granted to them by Congress and no such grant to address global climate change or transform international energy supply exists." WASHINGTON WATCH SEC CATCH-UP — Now that the Securities and Exchange Commission has finalized its long-awaited climate-risk disclosure rule, the equally long-threatened legal challenges have begun, Lesley reports for POLITICO’s E&E News. A group of Republican-led states sued the agency just hours after it approved the rule — and more could be on the way. Almost no side was pleased with the final rule, Eleanor Mueller reports. Republicans predictably blasted it. And there’s some tension among progressives about how they lost on Scope 3 and how much that omission matters, your host reports. Also: A Washington state bill that was originally crafted in the model of California’s nation-leading climate disclosure laws will not advance this year. The bill, which failed to clear the House, was significantly watered down earlier this year to simply study the disclosure issue and require a report on whether the SEC rule is “sufficient to track emissions.” Both Ceres and the U.S. Chamber — groups that find themselves on opposite sides of the climate risk disclosure issue — have both warned that legislation copying California's could do more harm than good. Proposals in New York and Illinois are still pending. CHAMBER UPS ITS PFAS GAME — The U.S. Chamber of Commerce has launched a campaign aimed at “increasing awareness” about the importance of PFAS for industries ranging from healthcare to defense to semiconductors. Marty Durbin, the chamber’s senior vice president for policy, said in a statement that the group supports cleanup of specific legacy "forever chemicals," but argued that “not all PFAS are the same, and the regulatory environment should reflect those differences.” Tom Flanigan, a spokesperson for the American Chemistry Council, said the organization commends the Chamber’s new initiative, which is independent of his group’s efforts. The campaign comes as EPA is looking to crack down on the human-made chemicals on multiple fronts, which are pervasive in the environment and human bodies and have been linked to adverse health conditions. The agency is seeking to strengthen review of new PFAS entering the market, close loopholes on existing PFAS, and finalize a first-ever limit on their presence in drinking water and a Superfund designation that would force cleanup of at least a handful of chemicals in the class. DATA DIVE PRICKLY PROXY SEASON — The chaotic and contradictory world of ESG isn’t sparing the 2024 proxy season. Companies should expect a “seemingly random assortment of shareholder proposals with unfamiliar — and sometimes conflicting — approaches to the same issue,” according to a new report shared with POLITICO by The Conference Board and data analytics firm ESGAUGE. But out of the minefield could come a new approach for companies navigating the pro- and anti-ESG pressures they face. “If investors and companies can tune out the noise, this proxy season could spark a new era of constructive dialogue that can generate long-term value,” said Merel Spierings, The Conference Board senior researcher who wrote the report. Early signs point to a continuing dip in support for shareholder proposals this year. The 17 resolutions voted on as of late last month have averaged just 15 percent support, compared with 23 percent at this point last year. Environmental and social resolutions are increasingly asking companies to take specific action rather than simply provide information, according to the report, which was completed in collaboration with the Rutgers Center for Corporate Law and Governance and Russell Reynolds Associates. That’s especially true as mandatory climate disclosure requirements take effect, making these types of requests potentially redundant. Instead of disclosure-related proposals, investors are filing more resolutions on environmental issues such as biodiversity, plastic pollution and deforestation. Another change is the increasing share of shareholder proposals coming from conservative groups. At S&P 500 companies, 16 percent of proposals have been filed by self-described conservative groups this year, compared with 13 percent last year, while those filed by progressive groups have remained relatively flat. Proxy proposals took a big hit last year. While about 100 more proposals were filed in 2023 compared with a year earlier, they generated about 23 percent average support — eight percentage points less than 2022. Support for environmental and social proposals dropped 14 points and five points in 2023, respectively. YOU TELL US GAME ON — Welcome to the Long Game, where we tell you about the latest on efforts to shape our future. Join us every Tuesday as we keep you in the loop on the world of sustainability. Team Sustainability is editor Greg Mott and reporters Jordan Wolman and Allison Prang. Reach us all at gmott@politico.com, jwolman@politico.com and aprang@politico.com. Sign up for the Long Game. It's free! WHAT WE'RE CLICKING — Scholars are increasingly challenging studies that sparked the rise of ESG investing, Bloomberg reports. — Mukhtar Babayev, the Azerbaijan official who will lead COP29, tells the Financial Times that “green growth is a priority” for the host nation. — The Washington Post takes a look at why Greenland’s northernmost town is turning from fossil fuel to renewables.   Follow us on Twitter Debra Kahn @debra_kahn Greg Mott @gwmott Jordan Wolman @jordanwolman Allison Prang @AllisonPrang   Follow us

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