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The Supreme Court v. sustainable innovation
61 Plays3 months ago
At the end of their most recent term, the US Supreme Court issued four major decisions that will impact the future of regulation in America. Mike and Anthony break down these cases - including Loper Bright Enterprises v. Raimondo, which overturned Chevron deference - and unpack their impact on the scale-up of sustainable innovation in America.
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Transcript
Introduction to Innovation Matters Podcast
00:00:10
Speaker
Hello and welcome to Innovation Matters. It is the podcast about sustainable innovation brought to you by Lux Research. I'm your host, Anthony Schiavo, and I'm joined here by my co-host, Mike Holman. Innovation Matters, the podcast, so nice. We recorded it twice.
Supreme Court's Role in Technology Innovation
00:00:26
Speaker
ah Because this is our our you know little peek behind the curtain. This is our second pass at doing an episode on this particular topic. And that topic is, of course, the Supreme Court, the four recent Supreme Court cases and their impact on innovation and the rollout of of sustainable technologies generally. But before we get into that, Mike, how are you?
00:00:50
Speaker
I'm doing great. I'm coming to you live from the, uh, the great city of Atlanta, Georgia. Oh, wow. I didn't realize you were in Atlanta. I am in Atlanta. Yes. ourring welcome We are taking the kids to space camp, which is in, uh, Huntsville, Alabama. And we've, we've done it before in the past. We flew into Nashville, which is the the closest sort of major city. to Huntsville, but this time we decided to do Atlanta instead. It's a little bit further drive, but I haven't really spent much time here, so I'm kind of looking forward to the chance to do that. I've been here for work a bunch of times, conferences and stuff like that, but I've never really actually hung out in the city, so looking forward to it. I don't think we have time to get into all my traumatic experiences with
00:01:39
Speaker
Space Camp on this podcast. But let's just say that when I went to Air Force Camp, which is co-located with Space Camp, I flew as an unaccompanied minor. My parents did not come with me.
Deregulation and Technology Policies
00:01:50
Speaker
That was ah just by myself. but um yeah so Speaking of traumatic events, let's dig into this let's dig into these recent Supreme Court cases. but Before we get started, we're going to try not to editorialize too much here. Before we get started, ah there's a couple of things I think we wanted to get out of the way right up front. First of all, Mike, like why are we talking about Supreme Court cases on our and technology innovation podcast? Can you just talk about why this is important for a second?
00:02:19
Speaker
Well, I mean, because the Supreme Court cases are going to affect technology innovation, right? These ones. um And, you know, I think a big theme of the Innovation Matters podcast and of our work with client at Lux Research in general with our clients and other folks in the sort of innovation ecosystem has been the the big role that policy plays and and particularly recently has been playing in rolling out a lot of climate tech and other other innovation areas with stuff like the Inflation Reduction Act. And so as we've spent a lot of time on on that. And um these cases that we're going to be discussing are are definitely going to impact probably some of the rollout of the IRA itself and definitely the
00:03:07
Speaker
um the outlook for future future IRAs or future policy and you know in in the US, obviously, we will will we it's going to be yeah going to be US focused. yearre uscon it's um yeah It is it is just is significant for um for the rollout of a lot of these innovations that we like to talk about. Yeah. And I think you know the other thing I'll say about this is I think it's important that we are talking about this. ah The law you know is not the exclusive domain of lawyers. I think anyone can have an opinion on it. I think anyone can comment on it. Certainly we're all going to be affected by it here in the United States. And so it's totally legit you know for us to
00:03:50
Speaker
two chemistry types to be popping off about the Supreme Court here. It's totally cool. Don't worry about it. all right um so and Just to set the stage a little bit, I would say over the last eight or so years, there's been a pretty deregulatory bent to the Supreme Court. right We have this relatively conservative Supreme Court now, especially since Trump. We had three justices appointed. But even before that, there was a fairly deregulatory bent. You had West Virginia versus EPA, which was introduced the major questions doctrine.
00:04:25
Speaker
you have things like SACA2, which sort of reduced the scope of the EPA's um sort of ability under the Clean Water Act to to do certain regulations. So the four cases we're talking about, you know, they didn't just come out of nowhere. They're part of ah a sort of a broader deregulatory ah push by the Supreme Court.
Loper-Brite and Regulatory Agency Power
00:04:43
Speaker
So the four cases we're going to talk talk about are Loper-Brite versus Raimondo. This is the big one. This is the one we're probably going to spend the most time on. We're also going to talk about Corner Post, Inc. versus Board of Governors of the Federal Reserve. And then we'll briefly touch on two other important cases, SEC versus Darkazy and the Ohio versus EPA case.
00:05:03
Speaker
So the EPA, it's only named in one of these cases, but I think each one of them has a pretty significant impact for the apa EPA in particular. And that's where a lot of the innovation impacts are going to emerge from. Starting off with Loperbrite. This is a ah baseline case. you know The facts of the case are about basically fishery rules. There are rules in place to prevent overfishing. One of the ways they do that is they have an observer on the fishing boats. You have to pay for the observer under certain situations and contexts. And there was a lawsuit from a couple of small fisheries that was brought and ultimately challenged this sort of capability. Right. um So these these facts are kind of ah huge implications for aquaculture. Right. I mean, though I was talking about it. Right. I think that's one of the things it's worth. It's interesting or worth calling out is that, you know, these facts are not super impactful, but the decision was hugely impactful. Right.
00:06:01
Speaker
So the principles, the legal doctrine. And the legal principle in question in this case is a principle called Chevron deference. It gets that name from a court case, Chevron versus EPA. That's a guideline for judges, basically. It is a rule of statutory interpretation. And when basically it states the idea is that When judges are interpreting law, they should first, you know, follow the the normal rules of interpretation, right? If the law is clear, if the law is plain, you should do what the law says, right? But then within the law, there is often ambiguity, right? And this ambiguity could be unintentional, but it's quite often intentional as well.
00:06:41
Speaker
where the Congress will have these ambiguous laws and essentially delegate power to the executive branches, right? The agencies to interpret the law and to actually turn the text of that law into regulation and practice and executive action and practice. And Chevron deference, the idea is that in these cases where the law is ambiguous and there are multiple possible interpretations that are all valid, judges should defer to the expertise of the agencies in setting these rules and making these interpretations so long as those interpretations are reasonable, right? If Congress says you need to make a carbon tax, not that they ever would, but hopefully, you know, you can't interpret that and say, oh, well, like actually a
00:07:36
Speaker
sending in the National Guard on coal plants is actually a better way to you know to to curb emissions. right It has to be reasonable. And so when people bring suit, right when people sue agencies, this comes up. right They ask them to rule on these laws. And a lot of the times, um you know the agency wins, about 70% of the time. So, still a third of the time, you know, they're getting sort of overruled under this Chevron deference approach. It's worth noting that the original case, Chevron VEPA, or excuse me, it's not Chevron VEPA, it is... NRDC. NRDC, National Resources Defense Council. Thank you. So, Chevron versus NRDC. An environmental guardian.
00:08:17
Speaker
That's an environmental organization. NRDC was trying to get the EPA to enforce its rules more tightly. um This was the Reagan EPA in the 80s and they were basically, the Clean Air Act had been passed and they were saying they were creating rules under the Clean Air Act and they were intentionally writing rules that were very loose, right? um Because it was the policy of the Reagan administration that there should be less regulation, the regulations should be looser, right? And so this ruling was, you know, the creation of Chevron deference was viewed as a a win for conservatives because at that time
00:08:57
Speaker
Reagan was in the White House and it was deer or and deferential to the to the White House. Now it's become to be viewed more as a you know a progressive thing and certainly the you know the relatively conservative Supreme Court ultimately overruled it. But it just kind of shows that these these things change a lot over time. So as we've been sort of mentioning, the case loper bright overturns chevron deference it throws out chevron deference i don't want to get too much into the legal arguments i think they're pretty wishy-washy but fundamentally this is very consequential chevron is cited i think like thousands of times a year in various court cases. This is like a very commonly used part of the law, right? What it does is it really, you know, in practice, I think limits, you know, it opens up agencies to suits, right? It opens up agencies to lawsuits, and it limits the scope of the rules that they can create. It really limits the amount of authority that Congress can implicitly designate to these agencies.
00:09:59
Speaker
and it really pushes the judiciary as the branch that should be interpreting law. not just in the case of you know legal arguments, but also kind of in the case of setting policy as well.
Court Power and Regulatory Consequences
00:10:12
Speaker
As a lot of this legal interpretation is really a function of policies, I think. you know The Reagan administration's policy was for looser regulations. you know In the Obama era, there were a lot of Chevron defense, or Chevron deference arguments in favor of tighter regulations. So fundamentally, we're gonna see more and more of the legal system get involved in setting policy.
00:10:34
Speaker
So that's where I'll sort of pause. Mike, I'm curious what you think or if there's anything you would flag up about lower right. We're going to go through all four cases before we really get into the big picture implications, but you know what's what's your opinion on on Chevron deference here? Well, I mean, it it gives the courts a lot more power to, I mean, as you described, right? The upshot of that is that that the courts are going to have a lot more flexibility and ability to to overturn particular regulations or actions that were taken by by regulatory agencies. And I think, you know, we'll get into the the discussion around this, you know, how how dramatically that will be applied is going to be. I mean, as you said right now, the regulatory agencies, when these things come into dispute, they tend to win about 70 percent of the time.
00:11:26
Speaker
Is this even under Chevron deference? Is this a matter of them going from a 70% win rate to a 60% win rate or a 70% win rate to a 20% win rate? it's a you know That's kind of the the big question as far as how ah consequential this
Case Studies: Corner Post, Inc. and SEC vs Darkazy
00:11:42
Speaker
is going to be. But I do think it's going to to definitely encourage um you know in the near term, especially as we're you know this is kind of the newly this issue has been newly reopened, a lot more regulatory challenges to a whole variety of of of of regulations, but I think you know very relevantly, a lot of the ones that are you know kind of impactful for climate tech or some of the other um you know sustainability or climate-related innovations we've been you know that we that we tend to discuss here.
00:12:16
Speaker
Okay, so let's go through the next three court cases a little bit more quickly. The first one is Corner Post, Corner Post, Inc. versus Board of Governors of the Federal Reserve. one of the So this case basically is centered around the statute of limitations on lawsuits about administrative rulings. So in the past, when a body like the EPA, or in this case, the Federal Reserve, creates an administrative ruling, creates a new regulation. There was a six-year statute of limitations. Basically, you had six years to file a lawsuit if you felt that the rule was created in a way that was inappropriate. The process, like a process issue with the law. It's worth pointing out, not if you thought the law was unconstitutional, right? You could challenge the constitutionality at any time. This is for process claims, primarily.
00:13:07
Speaker
corner post, this decision states that the statute of limitations starts from when the harm is inflicted on the company by the rule that was created in a way that was may not have been appropriate. right So what this means is essentially that the statute of limitations is now from the time of maybe the companies found it. So that could be whenever, right? So it really dramatically opens up the ability of corporations to sue the government and overturn rules on these procedural grounds, right? um Essentially in the dissent, Justice Kentucky Brown Jackson states like
00:13:48
Speaker
legally you could just make a company and make it subject to these rules and then on that basis sue the government, right? So part of what um the low for bright decision is that it's not retroactive. It doesn't overturn every single rule that was made using Chevron deference that would be everything would be a huge number of laws. But over the overturn of Chevron deference combined with the corner post decision means that a huge swath of administrative law that was previously settled or mostly settled is now kind of up for
00:14:29
Speaker
you know, re-up for litigation. Now there are, there have been lawsuits in the past on a lot of these laws, you know, just because the statute of limitations and you can sue, just because you can sue doesn't mean you win, but it really opens up a lot of legal grounds for lawsuits. And it also means that I think it's harder for there to be certainty because the statute of limitations is kind of constantly refreshing. It's not like it's more difficult to get to a point of something being truly settled law, especially with these admin rulings.
00:15:03
Speaker
So similarly, lots more lawsuits because of this, right? Great if you're a lawyer. All good, good stuff. This is this is all good news for lawyers. this is yeah That's certainly true. So yeah, more lawsuits and more uncertainty, right? There's there's more, ah you know, kind of, well, I mean, I guess with this with the Chevron piece, like that's a little bit in dispute, but more lawsuits, more uncertainty. The last two cases we'll probably go through even more quickly. First one is SEC versus Darkazy. I believe I'm pronouncing that right. It's a little bit of a lower profile case. um It basically has to do with a hedge fund manager, Darkazy, was issued some fines by the SEC. When the SEC does this, they use their own specialized administrative courts to do this. This is a common practice ah in government.
00:15:52
Speaker
the EPA uses these administrative courts to issue their own fines. And, you know, it's because it's kind of a specialized thing. They don't just want to go to a regular court. They have a a sort of specialized system for doing these types of these types of actions. The Jarkazi ruling states that in Some, a lot, who knows? A certain number of situations. There's a lot of ambiguity here. it kind of this This decision goes back to common law. like ah Something the Supreme Court's been doing a lot is going back to like English common law. We're going to skip over my opinion on that. um But you know basically, they will do you have the right to a jury trial. And so in a lot of cases, these admin hearings or these admin rulings from these administrative courts really need to be
00:16:37
Speaker
jury trials or the defendant has a right to a jury trial. This is going to basically slow down the enforcement and it'll also impact the behavior. you know It's just going to make enforcing these things like fines under the Clean Air Act a lot more difficult. right And then the last case is Ohio versus EPA.
Impact of Ohio vs EPA on Administrative Rules
00:16:53
Speaker
Within the clean ah power the Clean Air Act, there is the good neighbor rule. The idea is that if you are upwind of a state, you have a responsibility and extra responsibility to solve your air pollution challenges because our air pollution is going to go downwind to all those other states. So states like ohio mur yeah the states like Ohio that are upwind need to have a sort of have a higher burden on them. um Again, this is a highly procedural ruling. The actual issue at
00:17:27
Speaker
The issue here is that a lawsuit had been filed for a stay of this Good Neighbor rule on the basis that the comments that the EPA received during the rulemaking process were not adequately addressed. And the Supreme Court actually upheld this stay on the rule. Um, this is like a serious technicality. I know we're not trying to editorialize too much, but like the EBA received something like 11,000 comments. And on the basis of not having answered one of these comments thoroughly enough, the Supreme Court upheld the stay of this entire rule. So pretty minor infraction. All things are, all things considered as far as I'm concerned. Um,
00:18:14
Speaker
You know, I think on a high level, it just heightens court scrutiny and again, more lawsuits, right? It's sort of the theme of of this particular episode. You know, this really heightens the scrutiny that the judicial system is putting on the administrative state and creates more avenues for these rules to be over. Yeah. And just as this is a a little callback to an earlier Innovation Matter episode when we were talking about the 45V tax credits for hydrogen production. um which have not yet been set by the Department of Treasury, part of the reason they have not been set, or I think most of the reason they haven't been set yet, is because they are still reviewing the many, many thousands of comments that they got on yeah the draft proposal for that. And so this kind of ruling is going to mean that that process is is probably going to take even longer because they now will reasonably feel they have to be even more thorough in their
00:19:07
Speaker
review of and response to all these all these public comments before they finalize the regulation. Yeah, and there's no requirement that the comments be made, you know, in good faith. Anyone can make a comment, right? So you can get a lot of trolly type comments or just comments that are designed to be difficult to answer, right? And so there's a lot of, you know, it just creates a lot of like gunk in the machinery of of running the government. So those are the four court cases, Loper-Wright, Corner Post, Ohio versus EPA, and SEC versus
Supreme Court's Influence on US Regulation
00:19:37
Speaker
Star Casey. We did it. We've hit on some of the themes, but Mike, I'll open it up to you first. um Big picture. What does this mean for government regulation policy, you know either clean tech policy or general policy? What does this mean for government of the United States of America, are our beloved country?
00:20:00
Speaker
Well, yeah, I mean, as I said, well we'll we'll try to focus on the implications for, I think, a particular climate attack and other, you know, sort of areas of innovation that that we cover. I mean, because you you could, yeah you know, there's all kinds of potential implications for all all sorts of fields and walks of life here. I think that the, you know, as we've said, it's it's going to introduce definitely a lot more uncertainty. um And I think that's, you know with the Chevron, I guess that's been a little bit disputed in some circles where they say like, oh, the fact that it's with the courts is actually better for clarity than it being with the you know with the the the bureaucrats or the executive department.
00:20:48
Speaker
um because you know many many folks in many industries don't don't feel like they get as that they're there're ah that those regulators are necessary as as responsive to their questions or ask for clarification. And while I'm sure that can be true, i'm i' I don't really see we're having it in the courts. Decreases uncertainty, I think, just given the variety of different courts and circuits and things around the, app you know it seems to me, pretty clearly to to kind of increase the um the yeah the uncertainty there, though i I want to acknowledge there's people who who who feel differently about that. I don't think it's impossible that having it in the courts could it is necessarily bad. I mean, you look at the Delaware like Chancery Court, right? This is a very specialized business court that deals with specific like you know mergers and acquisitions. The judges there are experts. The judges there hire clerks who are experts, right?
00:21:42
Speaker
Same thing with the patent law. There's a specific court that all the patent stuff goes through, and those guys are experts, right? They know what they're doing. And so one possible outcome or framework here And this would require an act of Congress. So it's kind of in the category of things Congress could do. But you can imagine a specialized court case that exists to do these admin law, regulatory law cases, right, and is designed to do them quickly. I mean, one of the big problems here, why I don't think this improves you know uncertainty, as you mentioned, is because these court cases tend to take decades. um You know, they take a really long time, they drag, there's always appeals. You can imagine a specialized
00:22:22
Speaker
court system that is, you know, staffed with experts that is designed to turn these things over in like a year or so. Right. And like that could be a totally fine system by which to do this. I would still have some maybe quibbles or issues with it, but it's not impossible to imagine a system where this type of approach is functional. Right. That's not the system we have right now, I should say, but it's not theoretically impossible. yeah Yeah, that's that's true. um and And I think you know beyond the uncertainty, I do think it yeah it tips the the balance in in favor of of companies who would like to um to push back or overturn regulations. right So it is, as you as you said in the intro, kind of a fundamentally deregulatory impulse here. And
00:23:15
Speaker
So I think from that perspective, you know, there's cases where, you know, if for for industry, you know, broadly speaking, may think of it as as a good thing. um And and many people in industries would on many and many issues. But I also think that, you know, ah you know for a climate attack in some of the areas that that that we're looking at where industry is, you know, we're we're doing more industrial policy, right, as we've been discussing, and industry is really looking for, um you know, some of these regulations to help create the framework that'll help to to to grow some of these areas. I think it it will be a drag on them. And I think, I mean, for for me, the real quick the kind of the ultimate question is is how
00:24:01
Speaker
what's the magnitude of of sort of the effect going to be, right? I think there's a lot of doom and gloom or a lot of very, um you know, ah some commentary that's very alarmed about this because ah you think that it will be used as an excuse for the courts to just sort of tear down any and all kinds of environmental regulations. um And and There's certainly people that would like to see that, right? There's there's there is definitely kind of a libertarian you know movement and perspective that um that would like to dismantle the administrative state, as as ah um as people would say.
Chevron Deference and Policy Changes
00:24:43
Speaker
um I'm a little skeptical it's going to be as about how dramatic it's going to be. I mean, taking the Chevron deference case, Liberbright as an example, right?
00:24:53
Speaker
This is, as you said, a matter of statutory interpretation um and shifting officially from a ruling where courts must defer to the judgments of the experts of the regulatory agencies to a situation where, I think as it says, and Robert says and in in the opinion, the courts should take into account the judgment of the experts at these agencies, but they do not necessarily need to defer to them if they think that those, if those rulings are
00:25:26
Speaker
are in contradict you know their judgments or their their actions are are contradicted by the the plain legislative text. So on its face, it doesn't um necessarily um seem like it has to be that ah huge of a sea change. Maybe it goes more from a 70% to a 60% or 50%. you know, sort of win rate. um But it's going to depend a lot on the composition of the courts. Right. And, you know, it's it's sort of in the U.S. system. It's that's downstream of the presidency. Right. The president's report repoint both Supreme Court justices and and also judges all throughout the the federal system. So um depending on how many of the next you know four or five presidential terms are
00:26:15
Speaker
um go to Democrats versus Republicans will have a big difference in what the composition of all the judges who are deciding these cases 20 years from now. I'm more of a doomer on this. I'll be honest. There's two reasons. One is I think just looking at the win rate misses a little bit misses the point because the EPA and these other agencies are not writing rules in a vacuum. Right. They are writing rules with the understanding of the legal environment that they're operating in.
00:26:47
Speaker
and I think you see this in the Clean Power Plan right and the EPA's regulations on coal plants, where there has been nonstop legal action over these rules since you know the 2008 and eight in the Obama administration, right um when they were rolled out, like from day one. and so you know The EPA has taken a very narrow and limited scope with those rules um and and done a lot made a lot of changes from the original vision and the Clean Power Plan, all with the goal of trying to get them through the courts explicitly.
00:27:25
Speaker
um So, the awareness of the courts shapes the rules and shapes the policy. It's not just a question of, oh, we're going to do exactly the same policy, but we're going to do it now. It might just get overturned more frequently, right? It's going to limit the scope of what policy even gets proposed, right? um
00:27:47
Speaker
oh Yeah, I mean, I was i in fact, I was listening to another podcast about this with ah with, ah you know, one of the guests there who was a former EPA official, I think during the the the second George Bush administration. And he was he was very open about the fact that, yeah, yeah, we explicitly wrote these law, wrote some of these regulations with Chevron deference in mind, because we we expected that we would will we we receive that. So I think that's definitely the case. Yeah. So I think that's one of the challenges is is that we're just going to see far less ambitious laws um or far less ambitious regulations, I should say, not law. um Regulations, right? Yeah. That's the other point. We'll come to that. And I think the other thing is that
00:28:28
Speaker
to me, like you said, I think this does open up a lot of corporate influence here. right and Or just and sort of you know special interest, money interest. right um you know The Loper-Brite case was funded by the Koch brothers. right those fisheries Those two tiny fisheries did not have the money to run the court case up to the Supreme Court. right ah big guy The funding was all from a co-funded legal defense fund. so you know this is like these These money interests have these large ability a much larger ability to influence the courts than they do you know an admin directly like the EPA. um They can submit comments, but they don't have the same
00:29:08
Speaker
capability to bring lawsuits. And then also within that, you have a much higher you know dependence on like legal briefs. And this is something that Justice John Roberts actually wrote in the decision is he's like, we have amicus briefs, right? We have the relevant information about the issues because we have amicus briefs. But there's um kind of two issues with that. One is that the... So one issue is that not everyone can file an amicus brief, right? It definitely represents a higher bar.
00:29:44
Speaker
And then the only issue is that the judges are not experts. And, you know, I mean, the day after Loeberbright, they put this case out where they threw out the piece. The Supreme Court got the distinction between nitrous oxide and nitric oxide wrong throughout the entire piece. So, like, you know, having experts in charge, I think, is probably a problem ah good thing on some level. There are things that the courts, or um I should say, there are things that Congress can do, right? um Congress, first of all, we already mentioned you could create specialized courts, right, to to manage these types of issues.
00:30:20
Speaker
um Congress could also write laws with Chevron in mind. Either learned they could write more specific legislation that really gets into more of the policymaking part. um I think that's challenging. Part of why we do policy through the administrative state is that it's more flexible, right? It can respond more quickly to two events than than Congress can. um Or alternatively, they can put in some kind of Chevron clause, right? There's people say, okay, well you can say like, we're explicitly deferring power to this administrative body to decide
00:31:02
Speaker
what the scope of this regulation should be. You could even do that theoretically on the basis of an administrative law entirely to put Chevron deference into yeah that law as sort of a ah function of the law itself. So there's a lot that Congress could do. um We don't have any of that in place today. And I think it's going to be challenging to get any through any of that through Congress because it's such a partisan split right now. um But there are things we could do. I think the problem is that going forward, you know, a lot of these administrative rulings and regulations are kind of going to fall under the lowest common denominator. Right. The least friendly judge that someone can run a case up to will be the one setting the scope of the law.
Corporate Influence and Legal System Dynamics
00:31:49
Speaker
What does all this mean for administration, or excuse me, what does all this mean for innovation? There's a couple of technologies that we flagged up that are going to be very impacted by this. Plastic waste is a big one. Plastic waste really is going to need a significant comprehensive national regulation if we want to increase recycling rates. Things like waste collection, the design of plastic packaging, definitions of recycling, all that stuff is really going to benefit from comprehensive regulation. And that's the kind of thing where, you know, you would really under the old system, you know, see Congress delegating authority to the EPA, right? That is going to make things a lot more challenging. um And it's going to create a lot more uncertainty around the issues of plastic waste.
00:32:34
Speaker
You mentioned the IRA, Mike, what particular elements of the IRA are you most worried about or most ah you know concerned about in terms of this ah these new sets of rulings? Well, I actually I mean, met came up in the context of the tax credit rules. And um I think ah a given ah the the Ohio versus EPA case, you know, these these sorts of things that are open for public comment will take longer. I think actually you know the IRA, is um you know as RA Von Berkel, our colleague who we've had on here a couple of times, as I said, it's it's much more it's much more carrots than sticks. right So I think those types of you know the various types of tax credits um under the IRA are probably less likely to be affected than um you know restrictions on plastic waste or things like that ah that might be that that
00:33:31
Speaker
that might potentially be passed. um those those Those types of tax credits and and subsidies are going to be, I think, less affected by the the the types of challenges regulatory challenges that we expect to see more of here. um And in some cases could even you know be more favorable in in some sense for the you know like the whole issue with the 45V tax credits, right, is that a lot of industry players want those rules to be ah in terms of qualifying for the tax credits to be less strict around the you know emissions associated with the green with the with the clean hydrogen you're you're making. um So effectively making the subsidy more generous. right was that's That's more of the the industry position there.
00:34:19
Speaker
And so you could have a situation where the there are more subsidies available for ah for clean hydrogen projects, albeit projects that are maybe less strictly clean than they would be under under another version of the rules. and I think that's worth saying. i mean this is um you know As you pointed out with the Chevron ah issue, you know as far as kind of left versus right or pro environmental versus pro business regulatory versus deregulatory, even these these rulings will cut both ways.
00:34:53
Speaker
To some degree. To some degree, I think it's fair number this fair to say. mean, mostly cutting one away, I think. It is a fair point. Like Chevron was considered a win for conservatives yes when it happened, right? And ultimately it ended up being overturned, right? And ended up being this fundamental piece of, you know, of legislation. And another thing is that, you know, we don't really know how the judges will respond. Like we're going to get a bunch of contradictory rulings. You're going to get a bunch of sort of wild, you know, or just like justices and judges in the lower courts being all out of step with each other. And the Supreme Court may have to come back in a couple of years and say, okay, look, this is actually this is how you do it. This is how we're going to either bring back Chevron deference or we're going to have these new ruleism new rules of statutory interpretation. yeah So it's really hard to say. like
00:35:44
Speaker
exactly what course a lot of this is
Industry's Role in Legislative Processes
00:35:46
Speaker
going to take. I think that is that is fair. But I am skeptical that this is really such a double-edged sword. Yeah. No, I mean, I agree. It's it's it's going to to tend, as we we said at the beginning, and in more of ah of a deregulatory ah direction, which you know in in the context of of a lot of these you know issues around plastic waste and some of these other climate tech-related issues is probably going to tend to slow down new innovations coming out or or or lengthen timelines, make it more challenging for some of these things like you know I think you mentioned in the show notes. yeah anything ah you know um for intent Anything with a long timeline, which is a lot of stuff, is going to really struggle with this because but particularly the statute of limitations being open for so long just means that you know even longstanding rules about emissions regulations or whatever can be overturned
00:36:44
Speaker
you know, years, decades after they've been passed and have been enforced for a long time, right? So I think that's a ah really big challenge, right? I also think it's going to be harder for, you know, we've we've been talking a lot about the sort of ability of the government to do industrial policy on a high level, right? You know, we had the CHIPS Act, we had the IRA, it's going to be more challenging to do the next version of the CHIPS Act of the IRA. Right? When we, I don't know, whatever the next strategic things becomes, is that plastic waste, is that who knows what, right? um Fusion power, AI, well, our AI is already, I think, I would, count that I would count that under the chips act. But, but yeah, whatever the next strategic thing is, critical minerals, you know, who knows, right?
00:37:27
Speaker
It's going to be more challenging yeah to do that. You're going to have to have Congress, you know, Congress is going to have to like one thing that Congress could do, as I mentioned earlier, they would have to maybe just like get a lot more experts and write the law in a lot more detailed way. it Really substantive change to how they operate. um And even then, it's not clear that that would necessarily prevent all the challenges. Grab it up, put a bow on it for me.
00:37:52
Speaker
I think it's, I mean, I mentioned at the beginning, now we've been we've been talking about this because policy has been ah a big driver for for innovation in a lot of these areas with this push for new industrial policy and um concerns about climate impact and and all of that. And I think, you know in a sense, be by by increasing the uncertainty there, this is is making it it more important for for innovation leaders to be able to have a handle on policy, right? And it'll be not just ah the actions of the administrative agencies, but the actions ah oh you know or and of Congress, of course, but of the actions of the
Future of Supreme Court Reforms and Innovation
00:38:32
Speaker
courts. um So ah companies are going to have to to pay closer attention to this, maybe get more involved with um you know with lobbying and providing, like you said, if Congress is going to respond to this,
00:38:48
Speaker
ah this this shift by trying to write laws in a more explicit and more detailed way, then I think there's more of a scope and more of a need for for you know innovators who who care about these areas to be involved in providing their perspectives and expert input into into that legislative drafting process. maybe more so than they than they have in the past. So it's um ay it's going to require, I think from from industry, from innovators, innovation leaders at companies, you know, kind of more engagement with this um with this process to to understand how it's going to influence their their future opportunities.
00:39:32
Speaker
So now we're going to get into the last course case we want to discuss. ah Trump versus the other. Well, I mean, that was what ah I mean, one of the other things which you probably doesn't go into the podcast anyway. But, you know, the other future on certainty about this is what it means for the future of the courts. Right. We have seen it just in the last few weeks calls from President Biden to reform the Supreme Court. um Now, that was in response to a case about presidential immunity and whether Donald Trump could get prosecuted, for certain we won't get into that in any case. but
00:40:12
Speaker
um
00:40:15
Speaker
But um but you know that the a as there is frustration um from certain political corners with the way that the Supreme Court has been deciding some of these cases, it could create momentum for reforms to the Supreme Court, whether it's extra justices, term limits, what have you, um which again could could could affect you know more of that that outlook on how how some of these these decisions will will last and and and how they'll how they'll end up playing out in the in the legal arena.
00:40:50
Speaker
Well, if that happens, you may hear about it on the Innovation Matters podcast. No, not not a guarantee. But we will continue to cover the policy implications. And certainly as the election heats up, we are going to talk about, I think, Harris, Trump, the policy implications there.
Conclusion and Future Insights on Innovation Matters
00:41:09
Speaker
That's something you and I have talked about and written about already. And I think we will hear about that on a podcast in the future. Yes, bringing in some insights from our you know kind of consumer views, public opinion sort of insights from our ah our colleagues there as well, which I think is a really interesting angle to have on. Parris, good for the palm industry, question mark. um For all the context, you can like, subscribe, follow our podcast. We're on Apple Podcasts. We're on Spotify. Thanks so much for sticking with us. We really appreciate it, and we'll see you soon.
00:41:43
Speaker
Innovation Matters is a production of Lux Research, the leading sustainable innovation research and advisory front. You can follow this podcast on Apple Music, Spotify, or wherever you get your podcasts. If you want more, check out www.luxresearchinc dot.com slash blog for all of the latest news, opinions, and articles. so