On June 28, the Supreme Court made a big decision to end the Chevron Deference rule. This rule has allowed federal agencies, since 1984, to have a lot of freedom in interpreting laws, especially in areas like environmental regulations and energy policies such as EPA rules for power plants.
This decision marks a pivotal shift, redirecting the responsibility for interpreting laws from agencies to the judiciary, potentially influencing future regulatory oversight.
The Supreme Court’s decision was met with varied reactions. Daniel Bresette from the Environmental and Energy Study Institute criticized the ruling, arguing that it removes technical and scientific expertise from the regulatory process, placing more power in the hands of judges.
This change diminishes agencies like the EPA’s ability to enforce stringent emissions reductions on heavy-emission industries, impacting initiatives like the power plant rule, which mandates significant emission cuts.
Supreme Court Ends Chevron Deference, Alters Federal Agency Role in Environmental Law
Ian Fein of the NRDC expressed concerns that the decision could lead to increased legal challenges against agency actions, potentially stalling or overturning environmental regulations. The Court’s specific instruction to reconsider a case involving FERC’s approval of a solar facility in Montana highlights the immediate ramifications of this shift away from Chevron Deference.
Industry groups, however, welcomed the decision, viewing it as a reinforcement of checks and balances in regulatory processes. Leaders like Eric Hoplin of the National Association of Wholesaler-Distributors and Rob Nichols of the American Bankers Association praised the ruling for curbing what they see as regulatory overreach that stifles economic growth and innovation.
Despite these changes in regulatory oversight, corporate sustainability efforts, including commitments to achieve net-zero emissions, remain largely unaffected. According to Holly Carr, formerly of the SEC, while regulatory obligations may shift, corporate responsibilities to meet sustainability expectations set by stakeholders and investors are unlikely to change fundamentally.
This distinction underscores the ongoing corporate efforts to exceed minimum regulatory requirements in pursuit of sustainable practices.
The Supreme Court’s decision to end Chevron’s Deference marks a pivotal moment in regulatory law, reshaping how federal agencies interpret and enforce environmental regulations.
While it shifts power dynamics from agencies to courts, the broader impact on corporate sustainability commitments and regulatory stability remains nuanced, with ongoing implications for future environmental policy and economic development.
