Kenneth J. Markowitz Stacey H. Mitchell David H. Quigley Christopher A. Treanor January 16 2023 Achieving climate objectives through executive orders and agency rulemaking Akin Gump Strauss Hauer & Feld LLP | Environment & Climate Change - USA Kenneth J. Markowitz, Stacey H. Mitchell, David H. Quigley, Christopher A. Treanor Environment & Climate Change IntroductionPermitting reformSEC climate risk disclosure ruleMethane ruleESG programmesCircular economyRFS reformIntroductionWith republicans controlling the agenda in the House of Representatives, the Biden-Harris administration will seek to achieve its climate objectives through executive orders and agency rulemaking, rather than through legislation.The administration will continue to focus on the implementation of the Inflation Reduction Act and the Infrastructure Investment and Jobs Act. Republican-controlled House committees will bring a new level of scrutiny to the administration's activities through vigorous oversight hearings and investigations.Permitting reform Comprehensive permitting reform remains one of the few opportunities for democrats and republicans to find a compromise on legislation. Republicans are expected to focus part of their early 2023 agenda on energy legislation, which may provide an avenue for bipartisan negotiations like those undertaken ahead of the passage of the Bipartisan Infrastructure Law.SEC climate risk disclosure ruleThe Securities and Exchange Commission (SEC) will publish its climate risk disclosure rule. Republicans, who have uniformly opposed the SEC's proposed new rules, will look to beat back the agency's efforts to require additional climate-related reporting, while democrats will seek to boost support for the rule. Requirements will be scrutinised for disclosing scope three emissions, upstream and downstream, associated with the supply chain and product emissions, respectively.Methane rule Signalling at its earliest opportunity post-election that this administration intends to stay the course on regulatory action to combat climate change, the Environmental Protection Agency has issued a supplemental proposal seeking to expand the scope of its long-anticipated methane rule to limit emissions of the potent greenhouse gas, which republicans are likely to oppose. Relatedly, the Inflation Reduction Act included a new methane fee that will take effect on 1 January 2024.ESG programmes As corporations pursue environmental, social and governance (ESG) programmes, congressional republicans will plan to pursue further actions to limit the influence of ESG frameworks in business decisions. Republicans, including key House Financial Services Committee members, have proposed a package of bills that they hope will roll back the influence of ESG in financial decision-making. Proposed reforms include:a bill by Senator Dan Sullivan requiring managers of passive investment funds to vote proxies based on the wishes of individual investors;a proposal by Senator Marco Rubio that would allow stakeholders with large shares in a company to sue that company for prioritising ESG guidelines; andRepresentative Andy Barr's legislation that would require retirement plan providers to prioritise financial returns over sustainability concerns.Circular economyRepublicans and democrats have expressed interest in working within the circular economy and moving legislation pertinent to the plastics industry. However, as the two sides are widely divided on the right solution, it is unlikely they can overcome that partisan divide.RFS reformThere is bipartisan interest in reforming the Renewable Fuel Standard (RFS) programme. While there might be a collaborative push to expand the programme, this has proved challenging in the past as it requires opening up the Clean Air Act, and the politics around the RFS are highly charged. That said, the RFS is an area ripe for reform, as the technology-forcing nature of the RFS mandate has failed to deliver on either the climate benefits or energy independence goals at the scale envisioned by Congress over 15 years ago.For further information on this topic please contact Kenneth J Markowitz, Stacey H Mitchell, David H Quigley or Christopher A Treanor at Akin Gump Strauss Hauer & Feld LLP by telephone (+1 202 887 4000) or email ([email protected], [email protected], [email protected] or [email protected]). The Akin Gump Strauss Hauer & Feld LLP website can be accessed at www.akingump.com.Ryan Thompson, senior advisor, and Leila Fleming, public policy specialist, assisted with the preparation of this article.