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‘Power grab’: As California closes in on a sweeping emissions law, Biden’s SEC could roll out its own version

by

Daily Caller News Foundation

  • California is set to enact a corporate emissions disclosure policy for large businesses in the state, ahead of the Biden administration’s anticipated finalization of similar federal standards that energy and policy experts described as potentially harmful to business.
  • If it becomes law, the legislation would force sufficiently large corporations doing business in the state to publicly disclose how much carbon dioxide their activities generate by 2026, as well as publicly disclose the emissions caused by their supply chains and customers by 2027, according to its text. 
  • “If I’m a California businessperson, I’m going to look to close up like I own a gun store in downtown Los Angeles,” Dan Kish, senior fellow for the Institute for Energy Research, told the DCNF.

California is poised to enact a sweeping corporate emissions disclosure law, which could harm business in the state, ahead of the federal government’s anticipated finalization of similar standards, energy and policy experts told the Daily Caller News Foundation.

State legislators passed the Climate Corporate Data Accountability Act on Monday, and it would require companies with annual revenues greater than $1 billion to publicly disclose the emissions generated by their operations, their supply chains and their consumers under rules devised by the California Air Resources Board (CARB). The Biden administration’s Securities and Exchange Commission (SEC) is under pressure from environmentalists and numerous Democrats to finalize and impose similar emissions disclosure guidelines on the federal level, an outcome which could harm and further politicize American business, energy and policy experts told the DCNF.

“If I’m a California businessperson, I’m going to look to close up like I own a gun store in downtown Los Angeles,” Dan Kish, senior fellow for the Institute for Energy Research, told the DCNF. “Plus, it will be great for the trial lawyers, since this policy will lead to so much litigation, making them rich and enabling them further as leading contributors to Democrats who control the one party state of California.”

The bill is now on Democratic California Gov. Gavin Newsom’s desk, and he will have until Oct. 14 to decide whether he will sign it into law, according to Reuters.

“Climate change also poses a significant risk to companies’ long-term economic success and disrupts the value chains on which they rely,” the bill states. “Managing these risks requires investments in decarbonization strategies that unlock emissions reductions and provide economic benefits for Californians and the state economy.”

If it becomes law, the legislation would force sufficiently large corporations doing business in the state to publicly disclose how much carbon dioxide their activities generate by 2026, as well as publicly disclose the emissions caused by their supply chains and customers by 2027, according to its text.

The California Chamber of Commerce has slammed the bill, saying that it “will burden California’s businesses by imposing onerous and unnecessary climate-related reporting requirements” and that it “is problematic because reporting emissions associated with a company’s entire supply chain will necessarily require that large businesses stop doing business with small and medium-sized businesses,” according to its website.

However, some major companies, like Ikea, Microsoft and Apple, have supported the legislation, according to Reuters.

The Biden administration is pushing a similar set of climate disclosure policies via the SEC, Will Hild, executive director of Consumers’ Research, told the DCNF. However, the California bill may be more stringent than the SEC proposal.

“What California is doing appears to go even further than what the SEC has proposed,” Jason Isaac, executive director of the American Energy Institute, told the DCNF. “As a result, more companies will leave California, and more Americans getting crushed by higher energy prices.”

The SEC is under pressure from many Democratic lawmakers and dozens of environmental groups to quickly finalize the policies after the delays.

“Biden’s SEC is pushing harmful so called ‘Scope 1, 2, and 3’ disclosures that not only will increase costs for no benefit, but Scope 2 and 3 give the SEC powers over non-publicly traded companies and incentivize companies to track the emissions of individual consumers,” Hild told the DCNF. “It’s a totalitarian power grab by an agency that is supposed to have a narrow focus on publicly traded companies solely on financial matters.”

A group of 80 House Democrats signed an August letter urging SEC chairman Gary Gensler to finalize and implement climate-related risk disclosure standards as soon as possible. The SEC unveiled its proposed rules in 2022, but the finalization of those rules, expected to have occurred earlier in 2023, has been delayed several times amid pushback from industry stakeholders, according to The Verge.

Like the California law, it is unclear what exact form finalized SEC emissions disclosure requirements may take. However, the SEC’s proposal shares several structural similarities with the California bill, including requirements for covered companies to detail how climate-related risks may impact their business, disclose carbon emissions generated by a company’s supply chains and divulge the amount of emissions created by consumers using a company’s product.

“The people pushing them are dead set on turning the U.S. economy into a political weapon for the extreme left,” Hild continued. “The disclosures will do nothing to aid investors into making wiser decisions, in fact, by mandating the publication of made-up numbers it will confuse investors and cost companies massive fees to the outside consultants they now have to hire to produce immaterial reports.”

California has pursued aggressive climate policies to reach its 2045 net-zero carbon dioxide emissions goal, such as committing to ban new diesel-powered trucks by 2036, clamping down on fossil fuel-powered appliances and an electric vehicle mandate for new car sales after 2035.

The White House, SEC, CARB and Newsom’s office did not respond immediately to requests for comment.

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Republished with permission from Daily Caller News Foundation

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