The Changing Landscape of Climate Regulation: What to Expect with the Incoming Administration: A Quick Brief

*As-of Dec. 3, 2024, information may be subject to change.

As we look ahead to the incoming second Trump Administration in the U.S., it's essential to understand the potential implications for climate regulation and environmental policies. Drawing parallels from the first Administration, anticipated potential budget cuts could impact relevant agencies, including the Environmental Protection Agency (EPA) and the Department of Energy (DOE). Prospective regulatory rollbacks also could be on the table. Notably, the first administration rolled back over 100 environmental rules, including climate regulations introduced during the Obama era, affecting power plants and vehicle emissions.

Topics expected to be addressed in the new administration include easing federal permitting processes, eliminating electric vehicle subsidies, and rolling back regulations such as the Greenhouse Gas Standards, vehicle fuel efficiency standards, and methane emissions regulations. These changes could have far-reaching effects on the environment and the economy.

SEC Climate Disclosure Rule

In March 2024, the Securities and Exchange Commission (SEC) introduced final rules mandating that registrants disclose specific climate-related information. However, shortly after these rules were adopted, the SEC voluntarily stayed the implementation while awaiting legal proceedings. As the incoming Administration begins its first 100 days on January 20th, 2025, this climate disclosure rule is likely to be one of the first targets for repeal.

It’s important to highlight that even if the rule is left to be adjudicated in the courts, it faces significant challenges. In 2024, the Supreme Court case Loper Bright vs. Raimondo overturned the Chevron doctrine, which previously required courts to defer to agency interpretations of their governing statutes. This shift means that agencies may struggle to implement rules and regulations without clear directives from Congress, potentially rendering rules that push legal boundaries unconstitutional, regardless of the administration in power.

The Rise of State Climate Disclosure Rules

While federal climate disclosure rules may not be a priority under the incoming Administration, states are likely to intensify their efforts to establish their own climate disclosure laws. In the absence of new federal rules, states have the authority to implement their own climate regulations, paving the way for localized solutions.

California is poised to lead the charge in this regard. The state's recently amended Climate Disclosure laws are expected to remain intact, regardless of the shift in federal administration. This sets a precedent for other states contemplating similar legislation to pursue their own climate regulations.

What’s Next

As the second Trump Administration takes shape, the landscape of climate regulation is poised for significant changes. While federal efforts may not take shape, state-level initiatives could emerge as drivers of climate policy. Stakeholders across the board will need to stay informed and engaged as this dynamic situation unfolds, as these changes could have a profound effect on the business landscape.

Stay tuned for more updates on these evolving topics, and visit our hub page for recurring updates.

*This quick brief was contributed in partnership with Schneider’s U.S. government affairs team.