"A huge federal step backward"

Following Thursday's bombshell 6-3 ruling from the U.S. Supreme Court against the EPA's Clean Power Plan in West Virginia v. EPA, Axios spoke with investors across the industry for their initial reactions to the news.

Why it matters: The private sector has remained a key player in the advancement of climate technology to date, and may assume a larger role in the absence of aggressive federal policy.

What they’re saying: Investors focused on several themes.

• The direct impact of the decision will likely remain fairly contained given the EPA's somewhat limited role in decarbonization to date, especially as it relates to the national electric grid.
• Many investors and entrepreneurs are committed to sticking with investing in climate technology. Several investors noted that, if anything, the activity and interest will only increase in urgency following the decision.
• There is still a role for the administration to play, but it makes sense for the public and private sectors to work together if the country is to stay in accordance with the 1.5° C Paris Agreement target.
• "Meaningful policy efforts to attempt to close this gap and reach these goals will now increasingly depend on a divided Congress," S&P analysts Roman Kramarchuk and Matt Williams note about the country's ongoing climate commitments.

Plenty of anger: "This is a huge federal step backward on our collective work to address climate, but on brand for a political agenda aimed to support business as usual for O&G interests," Powerhouse Ventures founder Emily Kirsch tells Axios.

• The Engine CEO Katie Rae wrote with a single word: "Absurd."
• "Regardless of the politics and posturing, it's a step backward for climate and the country — and the big corporate polluters know it," Sozo Ventures managing director Spencer Foust says.
• "I'm horrified by the ruling itself, as I'd be horrified by anything that puts up unnecessary barriers to dealing with the climate crisis. Although it could have been a lot worse, in my understanding. The court didn't try to strip the EPA of all its power to regulate carbon emissions completely, so that's a relief," Launch investor Molly Wood says.

👀 Where it hurts: If you’re a startup developing emissions monitoring tech, this wasn’t the ruling you wanted.

• The EPA has been developing “Source Performance” regulations that were expected to implement strict methane monitoring requirements. The ruling yesterday now calls those plans into question.
• But private-sector appetite for the technology remains strong: “Sure, increased regulation would mean increased upside in terms of faster adoption and other tailwinds, but natural gas price movements from companies needing to meet 'Net Zero By 20xx' commitments and the coming wave of ‘certified clean’ gas will dwarf any impact from the EPA,” Zachary Bogue, co-founder and managing partner of DCVC, tells Axios.

No slowdown in deal flow: It’s still the “busiest year on record” for the deals lawyers at McDermott Will & Emery, says Carl Fleming, who focuses on renewable energy transactions.

• “A lot of this momentum started during the Trump administration when renewables were not front and center on the agenda. That momentum continued with Biden taking office. And that momentum will continue as the cost of renewables rapidly decreases.”

Climate-tech startups will be OK: "Venture capital 101 says you shouldn't rely on regulation to make your investment thesis work," FifthWall's Greg Smithies tells Megan.

• Ryan Dings, of Greentown Labs, agrees: “I don't see the Supreme Court's decision having any impact on the climate-tech entrepreneurs and the investors funding them,” he tells Alan.