Federal Appeals Court Strikes Down Biden’s Carbon Emissions Disclosure Rule

A federal appeals court halted financial guidelines announced by the Securities and Exchange Commission (SEC) that would require private corporations to publicly disclose their carbon emissions and the dangers that climate change poses to their operations.

In a brief decision announced Friday, the United States Court of Appeals for the Fifth Circuit halted the SEC’s climate disclosure regulation but declined to explain why.

The verdict, however, was in response to requests for review filed by energy corporations Liberty Energy and Nomad Proppant Services, the states of Louisiana, Mississippi, and Texas, as well as industry groups Chamber of Commerce, Texas Alliance of Energy Producers, and Domestic Energy Producers Alliance.

“For two years now, the U.S. Chamber of Commerce has raised significant concerns about the scope, breadth, and legality of the SEC’s climate disclosure efforts,” said Tom Quaadman, executive vice president of the Chamber’s Center for Capital Markets Competitiveness, in response to the SEC’s disclosure rules.

“The Chamber will continue to use all the tools at our disposal, including litigation if necessary, to prevent government overreach and preserve a competitive capital market system,” he said.

After nearly two years of heated debate, the SEC approved the climate disclosure regulations on March 6 in a 3-2 vote, led by Chairman Gary Gensler, whom President Biden selected to the position.

The SEC stated that the guidelines reflect “investors’ demand for more consistent, comparable, and reliable information about the financial effects of climate-related risks.” Gensler also stated that they will ensure that corporations “produce more useful information than what investors see today.”

However, industry organizations and Republican politicians slammed the measures, claiming they would harm Americans and were an attempt to advance the Biden administration’s climate ambitions.

“In the two years since the climate disclosure rule was proposed, we have witnessed an unprecedented assault on our capital markets,” House Financial Services Chairman Bill Huizenga, R-Mich., stated during a hearing Monday.

“Despite the lack of unambiguous congressional authorization, the Commission finalized the climate rule. Although Chair Gensler has consistently stated that he is not a ‘climate regulator,’ under his leadership, the SEC has deviated from its obvious statutory role.”

“Investors should know that the SEC’s overreach will significantly hurt our economy while serving as a boon for special interest groups and far-left activists,” Huizenga said in a statement. “Unless he radically alters this approach to our capital markets, Gary Gensler’s legacy will be of an overzealous bureaucrat who was repeatedly reined in by the courts.”

The Michigan Republican also commented on the Fifth Circuit decision, stating that it “signals the SEC’s authority to develop, finalize, and implement a climate disclosure rule is in jeopardy.”

In addition, more than a dozen states have filed federal lawsuits challenging the SEC’s disclosure standards, and environmental groups have also sued, claiming the rules are insufficient.

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