This week’s Supreme The court’s decision to curtail the Environmental Protection Agency’s ability to regulate greenhouse gas emissions may not have been unexpected, but it was still a bomb. Not only has it hurt the prospect of prompt executive action on the matter, it may have cut off some regulatory solutions.
The EPA had tried to curb carbon emissions first through the Obama-era Clean Power Plan, which had been shelved after court losses, and then through regulations from the Biden administration. The two democratic governments relied on part of the Clean Air Act which authorized the EPA administrator to use their judgment to compile a list of stationary sources of pollution “that could reasonably be expected to endanger public health or well-being.”
Carbon emissions certainly deserve to be on the list, with climate change expected to cause nearly 5 million additional deaths annually by 2100.
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Now, if anything needs to be done about the case, the court said Congress must explicitly approve it. Given the current state of Congress, climate legislation is not impossible, but also not very likely.
Until that happens, the US will become increasingly dependent on the private sector to provide climate-focused solutions that will not only limit carbon pollution, but also give the country a chance to remain competitive in a world that is rapidly moving away from fossil fuels.
“This is a race we can’t afford to lose, but the Supreme Court has just put weights to our feet.” Peter Davidson, CEO, Aligned Climate Capital
The good news is that the climate technology sector has become a hotbed of activity in recent years, attracting tens of billions in investment. Despite a lack of government action in the US, investors remained optimistic, partly because of the huge potential of the sector. By 2025, climate technology could generate up to $2 trillion in annual investment by 2025, according to McKinsey†
Of course, the Supreme Court’s ruling threatens to take cold water on this. While it may have dampened some enthusiasm in the short term, three climate technology investors remain optimistic that opportunities still exist and that the private sector can deliver results.