US Environmental Regulation

The agency’s rulemaking to implement the AIM Act will offer stakeholders opportunities to shape a new market-based mechanism to reduce HFCs.

By Jean-Philippe Brisson, Stacey VanBelleghem, and Zaheer Tajani

Tucked inside the US$900 billion COVID-19 relief package signed into law on December 27, 2020, is a regulatory opportunity for the climate-focused Biden Administration: the American Innovation and Manufacturing Act of 2020 (the AIM Act). The AIM Act requires the US Environmental Protection Agency (EPA) to develop an allowance trading system to aggressively phase down the production and consumption of certain chemical refrigerants, called hydrofluorocarbons (HFCs), throughout the United States.

EPA provides more detailed guidance on aftermarket safe zones while continuing to drive forward enforcement initiatives.

By Arthur F. Foerster

In 2019, the US Environmental Protection Agency (EPA) released its “National Compliance Initiatives” (NCIs) for years 2020-2023. EPA sets NCIs for what the agency believes are “the most serious environmental violations.”[1] One of those NCIs is to eradicate aftermarket defeat devices on emissions control systems for vehicles and engines. In the last few years, EPA has dedicated increased enforcement resources to pursue those who violate the defeat device and tampering prohibitions found in Section 203(a)(3) of the Clean Air Act (CAA).[2] Even with the pandemic, EPA has resolved more than twenty aftermarket “defeat device” and tampering enforcement cases.[3] EPA personnel recently released a report that estimates emissions controls have been removed from more than 550,000 diesel pickup trucks in the last decade, resulting in more than a half-million excess tons of oxides of nitrogen (NOx).[4] EPA’s enforcement efforts are expected to continue.

As Chairman Clayton reaches the end of his tenure, Commissioners Lee and Crenshaw continue to push for SEC action on climate change.

By Paul A. Davies, Paul M. Dudek, Ryan J. Maierson, and Kristina S. Wyatt

Background

In recent years, the market has witnessed a sharp divide both within the US Securities and Exchange Commission (SEC or Commission) itself and between the investor community and the SEC over the regulation of environmental, social, and governance (ESG) disclosures, as discussed in this blog post. The Commission, under the direction of Chairman Jay Clayton, has declined to entertain the regulation of ESG disclosures outside of human capital issues, even upon the adoption of amendments in August 2020 to the provisions of Regulation S-K governing the companies’ business description, risk factors, and legal proceedings. Last week, the Commission adopted amendments to the provisions of Regulation S-K governing Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) and, in line with its previous actions, declined to include any provisions related to ESG disclosures.

By Joel Beauvais, Claudia O’Brien, Bridget R. Reineking and Andrew Westgate.

Since assuming office in January, President Donald Trump – with the support of Congress – has stated his intention to roll back “burdensome” U.S. environmental regulations. The White House and Congress aim to reverse several of President Obama’s regulations on air and water pollution, land use, and greenhouse gases emissions.  But the new President may face challenges to reversing certain existing U.S. climate, environmental, and energy-related regulations.