[Ed. note: There will be no blog on Monday as our offices will be closed in observance of Martin Luther King day. We’ll return Tuesday.]
Death and taxes used to be the only certainties. These days, we can add “wild political oscillations” to that list. Yesterday, Politico reported (a nod to Emily Sacks-Wilner at Fenwick for the heads up here):
“Gov. Gavin Newsom left out funding in today’s budget proposal for the state’s biggest new climate law, SB 253, which requires big companies to disclose their greenhouse gas footprints. (He also left out funding for SB 261, which requires them to report on their climate-related financial risks.) Newsom said the $38 billion deficit (not $68 billion, as legislative analysts had projected) justified holding back funding to implement new laws across the board.”
State Senator Scott Weiner, the sponsor of SB 253, published a response, countering that:
“The fiscal impact of implementing the laws is miniscule in a state budget that totaled $310 billion last year. The California Air Resources Board (CARB), an air regulator that reports directly to the Governor, estimated $9 million is needed in this year’s budget — approximately three ten-thousandths of one percent of the budget — if the agency is to meet the phased implementation deadlines enshrined in the law.”
The chaos and deeper climate disclosure uncertainty goes beyond just California: SEC Chair Gary Gensler has mentioned the interrelationship between the state’s new laws and SEC’s still-proposed climate disclosure rule:
“[The California climate disclosure laws] may change the baseline [cost estimates for the SEC’s climate proposal]. If those companies were reporting to California, then it would be in essence less costly because they’d already be producing that information.”
What’s next is anyone’s guess. Without funding for the California laws, the SEC may revisit assumptions and expectations they’ve had since last September – possibly extending the timing for a final release even further into 2024. From a practical perspective, however, it would not be prudent for companies to halt activities related to developing their greenhouse gas inventories. The amount of time and effort involved are significant, and the processes/results can’t really be stopped and restarted to match the pace of political winds.
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