The SEC Moves to Regulate the Future of Farming

By Rep. Dan Newhouse (WA-04) and Rep. Mike Flood (NE-01)

This piece was originally published in the Washington Examiner.

America’s farmers and ranchers work best when the government lets them do their jobs without unnecessary interference. Unfortunately, over the years, federal agencies have seized on new opportunities to regulate them.

Since President Joe Biden has been in office, these agencies have been weaponized by environmentalists who are imposing job-crushing regulations in pursuit of an extreme agenda to remake America’s economy. In three short years, we’ve already had to battle against a dramatic expansion of the Waters of the United States rule, presidential executive orders, and a new Climate Corps. 

But that’s just the beginning. The Biden administration has more in the works for 2024.

Last month, the Securities and Exchange Commission released a new climate disclosure rule that would impose unprecedented reporting requirements on job creators in the U.S. The rule is the latest example of extreme climate activists pushing their agenda through the rulemaking process. If allowed to stand, this new regulation would not only stifle investment in America, but it would also threaten economic prosperity and punish the middle class.

The SEC’s almost 900-page rule requires extensive disclosures on carbon dioxide emissions and other theoretical climate risks. This includes emissions directly generated by a company, known as Scope 1, and indirect emissions produced because of purchasing energy, known as Scope 2.

As bad as this sounds, the original plan, which could come back at any time, was even worse. The SEC originally proposed to require disclosure for Scope 3 emissions. These are emissions not directly attributed to a company but are part of their value chain. Thankfully, grassroots advocacy and Republican members of Congress pushed back, preventing an even more egregious rulemaking from being finalized.

Nevertheless, the SEC’s decision to require disclosures for Scope 1 and 2 emissions will have devastating consequences. The unnecessary red tape imposed by the rule will likely serve as a gift to activist lawyers looking for reasons to declare open season on industries they oppose. We expect that agriculture will be top of mind for them as an industry that environmentalists have long sought to reshape. Beyond agriculture, litigious actions drive up costs for employers, which will be passed along to consumers, creating more hardship for those who are already struggling to pay their bills and stay afloat during periods of high inflation. 

At the end of the day, rules such as this one will curtail investment in the future of America’s energy sector as they seek a forced transition to less reliable and more expensive green energy sources that will destabilize our country’s energy security. 

While the environment, social, and governance movement and its related policymaking are unpopular in America, the SEC is circumventing the public by implementing its agenda without seeking congressional support. This rule is a breathtaking expansion of regulatory power by an unelected agency — power that was not delegated to it by Congress. The SEC knows the only way it can pressure companies into participating in the expensive and anti-growth ESG movement is through regulations issued by bureaucrats. 

This fight isn’t over — we can win this battle, but it’s going to take all hands on deck. 

The SEC should stick to its core mission of regulating financial markets and get out of its newfound hobby of dabbling in climate alarmism. As members of the Congressional Western Caucus, a group of more than 100 representatives dedicated to preserving the rural and Western way of life, we oppose the SEC’s climate disclosure rule. The unnecessary burden this rule places on producers will have negative trickle-down effects on rural communities and threaten their prosperity. 

We aren’t giving up the fight, and we will be working together with our colleagues to overturn this rule to protect our agricultural producers and our way of life.

Dan Newhouse is a U.S. representative for Washington and serves as the chairman of the Congressional Western Caucus.

Mike Flood is a U.S. representative for Nebraska and is a member of the House Financial Services Committee and the Congressional Western Caucus.

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