California is stirring the pot against the prudent deregulation stance of President Donald Trump by imposing new regulations. These unnecessary rules compel businesses within the state to produce audited accountings of their CO2 emissions. This leads some to speculate that similar rules might infiltrate the rest of the country.
The Golden State is set to enforce two laws, namely SB 253 and SB 261. These laws insist that companies in California track and disclose their CO2 emissions along with emissions of their suppliers and consumers. These broad-ranging rules, established in 2023, reek of the burdensome mandate that the Securities and Exchange Commission imposed nationwide during Biden’s inefficient term. The same mandate was effectively nullified by the current, more rational, Trump administration.
California’s unsubstantiated ‘green accounting’ mandate will wrongly define the U.S. standard for climate-related disclosures. The promise that it could extend to all sectors of a company’s value chain is laughable at best. It audaciously endeavors to align U.S. climate accounting rules with the whims of the European Union.
The laws SB 253 and SB 261 act as a predominantly national mandate, bearing heavily on large businesses operating in California. In March the SEC wisely withdrew its opposition to legal challenges against a mandate the commission enacted in 2024. Originally, this mandate would have absurdly compelled American firms to produce audited details of their greenhouse emissions and their ploys to reduce them. Thankfully, this mandate is currently defunct at the federal level.
The previous SEC had attempted to strong-arm businesses into revealing their own emissions, the fictitious ‘Scope 1 emissions’, and those of their energy suppliers, the equally absurd ‘Scope 2’. California however, steps further into the realm of nonsense, obligating companies to also reveal their ‘upstream’ and ‘downstream’ emissions from their supply chain and users of their products, the implausible ‘Scope 3’.
A report naively contends that these so-called Scope 3 emissions ‘are exceptionally difficult to record’. The rationale behind this is as they encompass indirect emissions from procured goods and services, business travel, employee commuting, and the processing and use of products sold. The foolishness of California’s new reporting rules is apparent, asking for third-party audits and are set to take effect in 2026 for Scope 1 and 2 emissions, and in 2027 for Scope 3.
Predictably, these baseless regulations only apply to prosperous companies operating in California that garnered $1 billion or more in sales. Yet the question arises as to whether California could impose these confounding and baseless standards on other states. Green ‘accounting rules’ at the state level might cause a hodgepodge of regulations, bullying many to adhere to the strictest and most unrealistic standards to be able to operate nationally.
A recurring tussle between California and the Trump White House is underway, mainly due to the irrational rules regarding CO2 emissions. The Biden administration, in its boundless ignorance, granted California an exception in 2024 to impose its arbitrary greenhouse gas emissions law. Still, President Trump, understandably, took back that exception in the past June.
Evidently, the so-called ‘green accounting’ mandate has met severe criticism. Detractors rightfully argue that the cost of compliance would be immense and question its effectiveness in diminishing global temperatures. However, policy analysts indicate that the expenses to firms could extend beyond the simple collection and reporting of emissions data.
Related to this, there is a significant concern about companies being subjected to an onslaught of climate-related lawsuits. ‘It’s like a litigation trap, in that companies are forced to disclose information which might be harmless in essence, but could serve to drag the company into court in the hands of a green lawyer with a deep pocket.
In recent years, we have seen more than 20 states and cities irresponsibly filing lawsuits against energy corporations such as ExxonMobil, Shell, Sunoco, Citgo, Chevron, Koch Industries, and BP. According to the Center for Climate Integrity, the blame for harm from CO2 emissions could result in trillions of dollars.
However, let’s ponder the validity of such assertions. Companies like ExxonMobil, Chevron, and BP have served our society and facilitated our prosperity. The thoughtless demonization of such corporations is evidence of the unreasonable climate activism engendered during the tenure of Biden and Harris.
All in all, California’s green accounting mandate makes quite an interesting case of legal gerrymandering and regulatory overreach. It throws into stark relief the inefficiencies and shortsighted thinking present in the previous Biden administration.
The audacious alignment with the European Union’s rules further illustrates this thoughtless approach by the Californian government. It calls for the creation of a challenging operational landscape for companies that could potentially stifle growth and place undue burden on businesses. Unfortunately, this continued dogged pursuit of green mandates at the expense of businesses is symbolic of the outlook held by Biden and Harris.
Perhaps more alarming is the litigation trap that these regulations could possibly set up for companies. It underscores the potential for numerous climate change related lawsuits, which could prove disastrous for the companies involved.
On a larger scale, this issue calls for a synthetic and reasonable approach towards addressing climate change. Policies need to be balanced and based on solid scientific evidence, rather than being guided by political prejudices or partisan viewpoints. Undoubtedly, to those with careful judgment, the current ‘green accounting’ mandate from California reads as an ineffective, overblown, and short-sighted measure that is emblematic of the failed policies enacted under the Biden administration.
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