The Major Questions Doctrine Raises Major Questions for the SEC’s Proposed Climate Rule

A few weeks ago, the Supreme Court issued its opinion in West Virginia v. Environmental Protection Agency, striking down the Environmental Protection Agency’s “Clean Power Plan Rule.” That rule sought to reduce carbon dioxide emissions using a new “generation shifting” approach that moved existing power plants “from higher-emitting to lower-emitting producers of electricity.” The Court, in analyzing the statutory grant under which the EPA claimed authority, concluded that the rule exceeded the EPA’s power, as it presented a “major question” of economic and national importance that required a clearer statement from Congress to confer such authority.But the “major questions” doctrine, as it is known, also has implications for other federal agencies—who together issue an estimated three thousand to five thousand final rules per year. For instance, the SEC’s proposed Enhancement and Standardization of Climate-Related Disclosures for Investors Rule (“Climate Rule”), which seeks to impose extensive disclosure requirements on U.S. public companies and foreign private issuers relating to climate change and climate-related risks, raises may of the same issues posed in West Virginia. Following the Supreme Court’s decision, if the SEC finalizes the Climate Rule in substantively similar form, it will likely trigger challenges under the major questions doctrine and, with…