The Securities and Exchange CommissiThe Securities and Exchange Commission (SEC) is in the process of finalizing its proposed “climate risk” disclosure rule for public companies. But the SEC has a huge amount of work to do, as the problems with the rule as proposed are legion, reflected by the voluminous economic, legal, scientific and policy- and sector-specific criticism that it has received.on (SEC) is in the process of finalizing its proposed “climate risk” disclosure rule for public companies. But the SEC has a huge amount of work to do, as the problems with the rule as proposed are legion, reflected by the voluminous economic, legal, scientific and policy- and sector-specific criticism that it has received.

© Provided by The HillWest Virginia v. EPA and the SEC climate risk disclosure rule

And that was before the Supreme Court issued its decision in West Virginia v. Environmental Protection Agency (EPA). The court ruled that the EPA lacks the legal authority under section 111(d) of the Clean Air Act to change the historical definition of “best system of emission reduction” (BSER) to force a state-by-state shift toward aggregate electricity generation systems – gas replacing coal, and wind and solar power replacing gas and coal – rather than emissions reductions from individual power plants. Before such a change in the definition of BSER is adopted, clear statutory authority must be enacted by Congress.

So, what does this decision have to do with the SEC’s proposed rule? A lot. To see this, it is useful to review Justice Roberts’s language on the “major questions doctrine” (precedent citations deleted).

Precedent teaches that there are ‘extraordinary cases’ in which the ‘history and the breadth of the authority that [the agency] has asserted,’ and the ‘economic and political significance’ of that assertion, provide a ‘reason to hesitate before concluding that Congress’ meant to confer such authority.