Navigating Climate Change Law: Challenges in the Absence of Regulation

In the absence of a comprehensive federal statute on climate change, corporations and their legal advisors in the United States face uncertainty. This gap in regulation presents a unique challenge for businesses looking to address climate issues effectively, particularly under the current administration.

With decades of experience in environmental law, professionals have navigated the implementation and evolution of significant acts like the Clean Air Act, Clean Water Act, and Endangered Species Act. These laws provide a clear regulatory framework, unlike the current scenario surrounding climate change, where such guidance is notably absent.

While traditional environmental laws mandate compliance, the societal approach to climate change lacks the same regulatory structure. This absence raises critical questions: How should companies act without clear regulations? How can legal advisors guide their clients without established precedents?

Despite this, numerous peripheral initiatives related to climate change exist. The Commodity Futures Trading Commission oversees derivatives linked to carbon credits, and the Securities and Exchange Commission manages certain disclosures. Additionally, litigation around climate damage and claims of carbon neutrality is ongoing, alongside shareholder actions and an array of public discourse.

Nonetheless, a central federal climate statute remains elusive, especially following the reduction in interpretative authority due to the overturning of Chevron deference. This leaves many legal and corporate entities grappling with decision-making in a regulatory vacuum.

Globally, achieving net zero emissions by 2050 is essential to limiting global temperature rise to under 2 degrees Centigrade. Companies recognize this imperative, necessitating a thorough evaluation of Scope 1, 2, and 3 emissions, calculating carbon footprints, and formulating reduction strategies.

The complexity intensifies when considering whether Scope 3 emissions are included, the role of carbon capture and storage, the legitimacy of carbon credit offsets, and the rights of landowners selling carbon credits from their land.

These challenges will persist, prompting different approaches. Some suggest creating pseudo-regulations through consensus, though this might hinder the innovation needed. Alternatively, emphasizing transparency and engaging stakeholders in decision-making could foster creativity and adaptability.

As environmental laws continue to evolve, so too must the strategies of lawyers and their clients, adapting to the shifting landscape or risk being left behind.