ESG perspective: The great regulatory rollback

MARK PATTON, CONTRIBUTING EDITOR 

One of the biggest stories in ESG today is the landmark decision by the Environmental Protection Agency (EPA) to rescind the Greenhouse Gas Endangerment Finding, which was the foundation for regulating vehicle emissions and Greenhouse Gases (GHG). This happened on Feb. 12, 2026.  

The absolute panic amongst environmentalist and mainstream media is interesting. The framing of most coverage on this topic relates to the Trump administration denying the science or referring to the original finding as a “bedrock finding.” I found this amusing, because I followed this very closely and how the “Social Cost of Carbon” played out under the Obama administration and the scientific gymnastics they went through to get to the “bedrock decision.”  

The return of Global Warming. It’s interesting, as the focus has gone back on how we are at a tipping point on global warming and waiting for a global catastrophe. But no mention of how warming has slowed or how the previous predictions have failed. Florida is supposed to be under water by now. No one talks about Dr. Judith Curry, a climatologist who left Georgia Institute of Technology, after she realized her data were flawed in her climate research showing a global warming problem. Yet, she was pressured to not change the findings, when she realized the real impact was much less.  

I thought we had got over the doom predictions of global warming, but one regulatory change, and it’s back in the news again. Let’s just be honest; there is gradual warming, and the planet has been historically hotter and had higher CO₂ before the industrial age. Let’s quit manipulating data to serve our purposes and call it science. 

Social cost of carbon background. To establish a foundation to allow for the regulation of CO₂, a group of handpicked experts used four climate models to evaluate the impact of CO₂. Now, it has already been established by many that these models overstate the impact of CO₂ as it relates to global warming. Apocalypse Never, by Michael Shellenberger, is a great book on some of the background of this overemphasis. 

Things like solar cycles and solar maximums are not even considered and as a result, these models always predict an outcome that never materializes. What we learn from Shellenberger’s book and Alex Epstein’s The Social Case for Fossil Fuels is that science is for sale. Climate models that express CO₂ as the big bad get funded, while more realistic models get ignored. 

So, when it comes to the “Social Cost of Carbon,” the models originally ignored Carbon Fertilization. Essentially, CO₂ is a plant food, and the more that CO₂ presents itself, the more plants grow, and the more food they produce. And the more the plants grow, the more they absorb CO₂. This is contrary to what most people were saying: that increasing CO₂ is going to increase temperatures and kill off our food supply, not increase our food supply. 

It has already been acknowledged that we are seeing a greening effect from CO₂. If considered in these four models, the result would have been that CO₂ is not worth regulating. Instead, only one of the four models included Carbon Fertilization, but even that one caused a problem. They significantly reduced the impact of Carbon Fertilization in the one model that used it. Let that sink in, they only considered Carbon Fertilization in one of four models and then significantly discounted the reported impact of Carbon Fertilization. Does that sound like good science? Does it sound like a bedrock scientific finding? 

There are other general concerns I have, like CO₂ solubility in water and how it changes with temperature. You see, if you ever had a cold carbonated drink, you know that when it warms, the bubbles go away. Water can hold some CO₂ when it’s cold and less when it warms. We live on a planet covered with water that is a significant sink for CO₂. But, when temperatures increase, water releases CO₂. So, people see this correlation between CO₂ and temperature, but the CO₂ is increasing because of the temperature change, and its not temperature increasing because of the CO₂ increasing.  

Don’t get me wrong, CO₂, methane NO_X and water vapor are all greenhouse gases, and all impact temperature. The relationship is much more complex than represented by most of these climate models, partly because the outcome was predetermined. I have to show that CO₂ is bad. How else can they fund their research, not to consider the fierce solar and wind lobby that wanted this, as well. 

What happens to the carbon markets? Well, before we get concerned, there will be legal challenges, and states have already started their saber-rattling. So, I expect we will see this play out in court. But the 45Q program, for example, which is a tax credit for reducing CO₂, won’t be impacted. In fact, it was just increased under the Trump administration. The 45Q program was established in 2008, and the whole Social Cost of Carbon program was fabricated in 2009/2010. So, the tax incentive remains in play, but this will likely slow down the general carbon market. The general market had a voluntary aspect and a compliance-driven aspect. The compliance-driven aspect will likely be reduced, if the challenges that will come are not successful. 

In the EU and Canada, however, the carbon markets will continue. Because of importation requirements for petroleum hydrocarbons in the EU and other places, we will continue to see methane and CO₂ being controlled and reduced. 

Conclusion. I don’t think we are seeing the end of Carbon Zero. This will still be a goal for many reasons and, as I mentioned, there is a tax incentive that supports these actions. What we really need is an open dialogue focused on real data and facts and not the pressure campaign and cancel culture every time someone has an opposing view. I think emissions should be regulated, and I think the 45Q tax credit should go beyond CO₂ and include all GHGs. 

Unfortunately, we have seen the politization of our academic institutions and science, in general, and we need to get back to real science and discovery, not manipulated science. Facts should matter and with that, a return to logic and common sense. I can say one thing—the next couple of years are going to be interesting.