diff --git a/cardano-api/ChangeLog.md b/cardano-api/ChangeLog.md
index 8341e8b8f19..f4313b0bc8c 100644
--- a/cardano-api/ChangeLog.md
+++ b/cardano-api/ChangeLog.md
@@ -16,6 +16,8 @@
 
 - **Breaking change** - `deserialiseFromRawBytes` method of the `SerialiseAsRawBytes` type class to return `Either` instead of `Maybe`.  Deprecate `eitherDeserialiseFromRawBytes`.  Use `deserialiseFromRawBytes` instead.
 
+- The `cardano-cli governance create-update-proposal` command to reject empty cost model.
+
 ### Bugs
 
 - Allow reading text envelopes from pipes ([PR 4384](https://github.com/input-output-hk/cardano-node/pull/4384))
diff --git a/cardano-cli/src/Cardano/CLI/Shelley/Run/Governance.hs b/cardano-cli/src/Cardano/CLI/Shelley/Run/Governance.hs
index d25e2ee903b..4d54e3e734d 100644
--- a/cardano-cli/src/Cardano/CLI/Shelley/Run/Governance.hs
+++ b/cardano-cli/src/Cardano/CLI/Shelley/Run/Governance.hs
@@ -10,6 +10,8 @@ import           Control.Monad.Trans.Except.Extra (firstExceptT, handleIOExceptT
                    onLeft)
 import           Data.Aeson (eitherDecode)
 import qualified Data.ByteString.Lazy as LB
+import           Data.Function ((&))
+import qualified Data.List as List
 import           Data.Text (Text)
 import qualified Data.Text as Text
 
@@ -21,9 +23,8 @@ import           Cardano.CLI.Shelley.Key (VerificationKeyOrHashOrFile,
 import           Cardano.CLI.Shelley.Parsers
 import           Cardano.CLI.Types
 
+import           Cardano.Ledger.Alonzo.Scripts (CostModels (..))
 import qualified Cardano.Ledger.Shelley.TxBody as Shelley
-import           Control.Monad.IO.Unlift (MonadIO (..))
-import           Data.Function ((&))
 
 
 data ShelleyGovernanceCmdError
@@ -39,6 +40,7 @@ data ShelleyGovernanceCmdError
       !Int
       -- ^ Number of reward amounts
   | ShelleyGovernanceCmdCostModelsJsonDecodeErr !FilePath !Text
+  | ShelleyGovernanceCmdEmptyCostModel !FilePath
   deriving Show
 
 renderShelleyGovernanceError :: ShelleyGovernanceCmdError -> Text
@@ -55,8 +57,10 @@ renderShelleyGovernanceError err =
        <> " The number of staking keys: " <> textShow numVKeys
        <> " and the number of reward amounts: " <> textShow numRwdAmts
        <> " are not equivalent."
-    ShelleyGovernanceCmdCostModelsJsonDecodeErr err' fp ->
-      "Error decoding cost model: " <> Text.pack err' <> " at: " <> fp
+    ShelleyGovernanceCmdCostModelsJsonDecodeErr fp err' ->
+      "Error decoding cost model: " <> err' <> " at: " <> Text.pack fp
+    ShelleyGovernanceCmdEmptyCostModel fp ->
+      "The decoded cost model was empty at: " <> Text.pack fp
     ShelleyGovernanceCmdCostModelReadError err' ->
       "Error reading the cost model: " <> Text.pack (displayError err')
 
@@ -163,6 +167,8 @@ runGovernanceUpdateProposal (OutputFile upFile) eNo genVerKeyFiles upPprams mCos
       cModels <- pure (eitherDecode costModelsBs)
         & onLeft (left . ShelleyGovernanceCmdCostModelsJsonDecodeErr fp . Text.pack)
 
+      when (List.null (unCostModels cModels)) $ left (ShelleyGovernanceCmdEmptyCostModel fp)
+
       return $ upPprams {protocolUpdateCostModels = fromAlonzoCostModels cModels}
 
   when (finalUpPprams == mempty) $ left ShelleyGovernanceCmdEmptyUpdateProposalError
diff --git a/update.proposal b/update.proposal
deleted file mode 100644
index 4fa8aa8319a..00000000000
--- a/update.proposal
+++ /dev/null
@@ -1,5 +0,0 @@
-{
-    "type": "UpdateProposalShelley",
-    "description": "",
-    "cborHex": "82a1581c5c5dbf04f506922566f737301c824847df1e2ceadb979e8ccb29070b981a818208008080808080808080808080808080808080a0808081821b00000004a817c8001a03b20b80808080801832"
-}