Under the current administration, the U.S. Environmental Protection Agency has said that its goal is to drive investment into America. But a recent policy proposal by the EPA would undermine that goal so much that it has many of America’s largest business groups across the economy urging the EPA to backtrack.
The proposal is to massively curtail the EPA’s Greenhouse Gas Reporting Program, a policy that for more than 15 years has required large facilities across many industries to track and report their pollution that impacts climate change. As the only standardized, facility-level data set in the U.S., the GHGRP makes it easier understand and track American greenhouse gas pollution over time. Researchers and policymakers depend on it.
And so does the market.
Modern investors expect companies to disclose their climate pollution, allowing them to identify the financial and economic risks related to a warming climate while targeting capital to innovative clean solutions that are in growing global demand. Removing this information will make U.S. businesses less attractive, reducing capital flowing into American industries. That in turn could force companies to raise prices that would ripple throughout an economy already struggling against affordability challenges.
Patchwork of state and local reporting rules
Without federal guidance, companies will face a patchwork of state and local reporting rules, adding costs and administrative burdens. And with overseas markets seeking cleaner materials and technologies, failure to report on emissions could also put the U.S. on poor footing across the global economy. For example, major U.S. industrial products like steel and liquified natural gas could face trade barriers if information about U.S. emissions is no longer available.
Even for companies still disclosing their own emissions directly to investors, the GHGRP also informs supply chain management, operational efficiency, and emissions beyond a single facility. Losing standardized, comparable data undercuts competitiveness.
The stakes go beyond mature industries. Emerging technologies like carbon capture and direct air capture are eligible for tax credits based on their effectiveness in reducing carbon pollution. But that eligibility depends on the emissions data the EPA is trying to hide. Without the data, the financial outlook for this technology becomes much more complicated – costing the U.S. a projected 200,000 jobs and forcing the U.S. to cede its lead in a key new global market to overseas competitors.
Widespread private sector concern
This is all cause for private sector concern, not celebration. And if you review the comments the EPA received during the public comment period that wrapped up earlier this month, you’ll see that concern is widespread.
Industry groups like the U.S. Chamber of Commerce, the American Petroleum Institute, and the National Association of Manufacturers — whose members this policy change is supposedly designed to benefit – are sounding the alarm, warning that it would complicate their ability to attract investment and disrupt market stability. The proposal has also received something so rare these days: bipartisan pushback from Congress.
Under the current administration, the EPA seems focused on reconsidering its policies in an effort to drive private sector activity. So, it should heed the advice of the private sector itself and recognize that investment goes where the data leads. The GHGRP is critical to ensuring that destination is America.