A Conservative Supreme Court Handicaps the EPA in its Fight Against Climate Change

Environmental Policy Brief #145 | By: Jacob Morton | August 1, 2022

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Policy Summary

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On June 30th, the US Supreme Court, in a 6-3 vote, issued a ruling on the case West Virginia v. EPA, to limit the authority of the Environmental Protection Agency (EPA) to regulate greenhouse gas emissions released by power plants that burn fossil fuels. The major coal producing state, West Virginia, along with a group of Republican-led states, various coal companies, and coal-friendly industry groups challenged the EPA’s authority to impose blanket regulations across an entire industry, asking the Supreme Court to limit the EPA’s ability to regulate greenhouse gas emissions from existing power plants. The court’s six conservative justices were in the majority in the ruling, with the three liberal justices dissenting.

The ruling does not eliminate the EPA’s authority to regulate greenhouse gas emissions, but it does considerably limit the scope by which the agency can do that. During the Obama administration, the EPA was given authority to reduce power plant carbon emissions through “a holistic or system-wide approach to reducing greenhouse gas emissions under the Clean Power Plan.” This plan allowed existing power plants to use so-called “outside-the-fence” measures, such as shifting some operations from coal to natural gas and renewable energy sources, or offsetting carbon emissions at one plant by reducing them at another to meet overall compliance standards. The plan, however, was revoked by the Trump Administration. Additionally, the Obama administration set state-by-state carbon limits and encouraged states to rely less on coal and more on alternative energy sources.

This program was ultimately blocked by the courts, but regardless, still met its targets 11 years ahead of schedule because coal became too expensive compared to other energy sources. The issue debated by the court in June’s West Virginia v. EPA case focused on how the EPA is allowed to regulate coal-fired power plants, which in this country are the single largest source of carbon emissions contributing to climate change.

The court’s decision allows the EPA to continue to regulate greenhouse gasses under the Clean Air Act, an authority that was confirmed by the Supreme Court in a 2007 decision, Massachusetts v. EPA, but with this new ruling, now asserts that such broad regulations that target not just a single power plant and the technology it uses, but rather a whole system of power plants, “comprised too significant an intervention in the U.S. economy to be justified under the authority of the EPA alone, without specific guidance from Congress.”

With this ruling, the Supreme Court severely limits the EPA’s ability to initiate any systemic approach to combating climate change. The majority opinion in this ruling based its argument on what the court has called “the major questions doctrine.” The court said that “neither the EPA nor any other agency may adopt rules that are transformational to the economy–unless Congress has specifically authorized such a rule to address a specific problem, like climate change.” In delivering the ruling, Chief Justice John Roberts pronounced that “The agency instead must point to ‘clear congressional authorization’ for the power it claims.”

Policy Analysis

Harvard law professor Richard Lazarus, an expert on environmental law, says, “That’s a very big deal because they’re not going to get it from Congress because Congress is essentially dysfunctional. This could not have come at a worse time … the consequences of climate change are increasingly dire and we’re running out of time to address it.” While this ruling handicaps the EPA’s ability to reduce carbon emissions fast enough to meet the Biden Administration’s 2030 greenhouse gas emissions goals, the agency could still potentially require coal- and gas-fueled energy producers to use carbon capture and storage processes when generating electricity, as an additional means for limiting emissions.

There are other federal actions that can be taken to reduce greenhouse gas emissions as well, such as revising fuel efficiency standards, appliance standards and tax credits to reduce emissions. State policies and corporate commitments to emissions reductions are also still in place. This Supreme Court decision, however, sets the stage for limitations on other federal agencies and their power to impose regulations as well and raises new legal questions about any big decisions made by federal agencies.

According to Case Western Reserve professor, Jonathan Adler, “The Court is definitely sending a signal to regulatory agencies more broadly that they only have the power that Congress delegated to them, and that agencies need to think twice before they try to pour new wine out of old bottles.” As Adler explains, an agency “can’t simply retrofit an old statute to create new tools or new mechanisms” to address a problem, even when that problem is within the agency’s jurisdiction. For instance, a new interim rule adopted by the Federal Energy Regulatory Commission “aimed at treating greenhouse gas emissions and their contribution to climate change the same as all other environmental impacts [the Commission] considers” may be threatened by this new ruling.

Professor Lazarus believes the ruling will have an immediate impact on the United States’ ability to fight climate change. Lazarus told NPR in an interview, “Remember when Joe Biden was elected, he said we’re going to use a whole big government approach to climate change, not just EPA regulation. Well, that whole government approach may now find itself under a cloud of this court’s opinion.” This ruling indicates that our current Supreme Court, and its conservative majority, will be a major obstacle to federal agencies seeking to implement broad policies of national importance.

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In her dissenting opinion, Justice Elena Kagan, explained that the Court is making up new rules that contradict nearly a century of regulatory law. Kagan points to the text of the Clean Air Act, which “clearly anticipates that the EPA will have to deal with new problems and uses broad language to allow that.” The conservative Court majority, Kagan says, “does not have a clue about how to address climate change…yet it appoints itself, instead of congress or the expert agency…the decision-maker on climate policy. I cannot think of many things more frightening.”

Contrary to Justice Kagan’s opinion, Chief Justice Roberts wrote that while forcing a nationwide energy transition by capping carbon emissions might be sensible, “it is not plausible that Congress gave the EPA the authority to adopt on its own such a regulatory scheme.” However, Justice Kagan argues that Congress did give the EPA such authority. Kagan writes, “The limits the (Court’s) majority now puts on EPA’s authority fly in the face of the statute Congress wrote,” adding that the court “deprives the EPA of the power needed – and the power granted – to curb the emission of greenhouse gasses.” Further, Justice Kagan notes that the Court is attempting to derail President Biden’s climate agenda before his administration has even issued its rule.

According to West Virginia Attorney General, Patrick Morrisey, the ruling is a “huge victory against federal overreach and the excesses of the administrative state.” But as Justice Kagan emphatically asserts, the Court’s goal with this ruling is painfully clear: “Prevent agencies from doing important work, even though that is what Congress directed.”

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President Biden called the ruling “another devastating decision that aims to take our country backwards.” In a statement Biden said, “While this decision risks damaging our nation’s ability to keep our air clean and combat climate change, I will not relent in using my lawful authorities to protect public health and tackle the climate crisis.” The President said he has “directed his legal team to work with the Justice Department and affected agencies to review the ruling and find ways under federal law to protect against pollution including emissions that cause climate change.”

On the bright side, Amanda Shafer Berman with the law firm Crowell & Moring, and a former senior environmental attorney in Obama’s Justice Department, said the ruling was “about the best that EPA could have hoped for given the current composition of the court.” Berman said the EPA can now proceed to issue a new rule that regulates power plant carbon dioxide emissions “albeit in a more limited way than envisioned” under Obama’s plan.

The Supreme Court’s decision came on the final day of rulings for the Court’s current nine-month term, and unfortunately, seems to reject any holistic regulatory approach to dealing with climate change. However, the Biden administration is still committed to making the U.S. power sector decarbonized by 2035. Despite these obstacles imposed by the Supreme Court, the President and his administration understand that the United States, behind only China in greenhouse gas emissions, is a pivotal player in efforts to combat climate change on a global basis, and swift, bold action is essential to avoiding the most catastrophic impacts.

Even if Republican-led states and a conservative Supreme Court refuse to do what is necessary, Democratic-led states and major power companies including Consolidated Edison Inc (ED.N), Exelon Corp (EXC.O), PG&E Corp (PCG.N), and the Edison Electric Institute, an investor-owned utility trade group, have sided with the Biden administration’s position, acknowledging the need for a swift transition of the United States’ energy sector away from fossil fuels.

Engagement Resources​

Click or tap on resource URL to visit links where available 

The Nicholas Institute for Environmental Policy Solutions (duke.edu) – Meeting the energy needs of a growing population, while protecting the air and environment surrounding us, is the chief focus of the Climate and Energy Program at the Nicholas Institute for Environmental Policy Solutions. 

By utilizing the interdisciplinary resources available at Duke University, the Nicholas Institute’s Climate and Energy Program is assessing how policies can work together and weighing their tradeoffs through a number of projects at the state, federal, and international level.

The Natural Resources Defense Council (NRDC) – To learn more about the Clean Air Act, the background to this Supreme Court decision, the implications of the ruling, and how to take action, check out the NRDC and the important work being done to fight for climate-smart policy.

Writer’s Resources​

Hurley, L., & Volcovici, V. (2022, July 1). U.S. Supreme Court limits federal power to curb carbon emissions. Reuters. Retrieved August 1, 2022, from https://www.reuters.com/legal/government/us-supreme-court-limits-federal-power-curb-carbon-emissions-2022-06-30/

Khanna, S. (2022, July 1). Supreme Court ruling limits EPA’s authority to restrict greenhouse gases from energy production. Duke Today. Retrieved August 1, 2022, from https://today.duke.edu/2022/07/supreme-court-ruling-limits-epa%E2%80%99s-authority-restrict-greenhouse-gases-energy-production

Totenberg, N. (2022, June 30). Supreme Court restricts the EPA’s authority to mandate carbon emissions reductions. NPR. Retrieved August 1, 2022, from https://www.npr.org/2022/06/30/1103595898/supreme-court-epa-climate-change