The order instructs the Attorney General to curb state and local climate initiatives and prepare a report within 60 days detailing those efforts.
On April 8, 2025, President Trump issued an executive order titled “Protecting American Energy From State Overreach” (the Order). The Order asserts that certain state and local laws undermine American energy dominance and, by extension, national security.
For a high-level overview of the Order, see this blog post.
Below, we further describe targeted regulations and responses to the Order from California and other states.
Which State Regulations Are Targeted
The Order targets “all State and local laws, regulations, causes of action, policies, and practices burdening the identification, development, siting, production, or use of domestic energy resources that are or may be unconstitutional, preempted by Federal law, or otherwise unenforceable” (collectively, State Policies).
The Order calls out specific regulations, including the climate superfund laws adopted in New York and Vermont, the California cap-and-trade program that caps greenhouse gas (GHG) emissions, and lawsuits from state attorneys general against energy companies alleging harm under nuisance and other tort regimes.1
There are open questions as to whether California’s Low Carbon Fuel Standard, Washington’s cap-and-trade program, the Regional Greenhouse Gas Initiative, various state renewable portfolio standards, or California’s GHG disclosure laws fall within the scope of the Order because the Order does not expressly reference these programs.
The Order Directs the Attorney General to Stop the Enforcement of These State Regulations
The Order does not create new causes of action that can be used to challenge these state climate programs. Instead, it directs the Attorney General to:
- identify all State Policies burdening domestic energy resources, prioritizing regulations that address climate change, environmental, social, and governance (ESG) initiatives, environmental justice, GHG emissions, and funds to collect carbon penalties or carbon taxes;
- take appropriate actions to stop the enforcement of regulations such identified; and
- prepare a report within 60 days regarding the actions taken in accordance with these directives, and recommend additional executive or legislative action necessary to stop the enforcement of regulations such identified.
The Order says that these State Policies “regulate energy beyond their constitutional or statutory authorities” when they “discriminate against out-of-State energy producers,” and that they “try to dictate interstate and international disputes over air, water, and natural resources,” which implies that the Attorney General could invoke constitutional provisions in its actions to stop enforcement.
Responses From State Governments
New York Governor Kathy Hochul and New Mexico Governor Michelle Lujan Grisham, co-chairs of the US Climate Alliance, a coalition of 24 governors, issued a statement in which they said “[th]e federal government cannot unilaterally strip states’ independent constitutional authority. We are a nation of states — and laws — and we will not be deterred.”
California Governor Gavin Newsom and leaders of the state legislature announced in a press release that they are “doubling down” on the state’s cap-and-trade program and will work together to seek an extension of the program this year.
Impacts on States
The Order has had an immediate impact on certain state policies. For example, prices for carbon allowances in the California and Washington cap-and-trade programs decreased following issuance of the Order. Similarly, proposals for climate liability legislation in California did not survive key votes in the state legislature following issuance of the Order.
Looking Ahead to Implementation of the Order
As the Department of Justice implements the Order’s directive to “stop enforcement” of the targeted state regulations, litigation may ensue. Some of these climate regulations have already prevailed in litigation, including against constitutional challenge. However, other regulations that have not faced such legal scrutiny may be more vulnerable. Litigation could stretch out over a number of years, so it could be some time before these matters are resolved.
Latham & Watkins will continue to follow and assess implementation of this Order, including in potential litigation.
