Supreme Court hamstrings federal efforts to clean up US power sector

The Supreme Court has sharply limited the Environmental Protection Agency’s authority to mandate greenhouse gas emissions reductions from the country’s power generation sector. The move could curb future actions from the Biden administration to combat a core driver of climate change.

It’s unclear how Thursday’s decision, which was supported by the court’s six conservative justices and opposed by its three liberal justices, might immediately affect federal agency efforts to regulate greenhouse gas emissions. White House spokesperson Abdullah Hasan said Thursday that the Biden administration’s lawyers ​“will study the ruling carefully, and we will find ways to move forward under federal law.”

But the ruling threatens to constrain federal climate action at a time when it should be aggressively ramping up. Though the U.S. power sector is gradually getting cleaner, that transition needs to accelerate dramatically to meet the Biden administration’s climate goals, and federal regulation is seen as a critical part of making that happen.

The case in question, West Virginia v. EPA, was brought by Republican state attorneys general and coal industry groups, which challenged the Obama-era Clean Power Plan, an emissions-reduction scheme that never went into effect because the Supreme Court stayed it in 2016.

The Clean Power Plan would have set targets for states to cut greenhouse gas emissions from their power sectors. It was designed to grant states maximum flexibility — not just in setting limits for emissions from individual power plants, but also in allowing states to shift generation from coal-fired power plants to fossil-gas-fired plants or renewable power, and to use energy efficiency, to meet their targets.

But Thursday’s opinion, written by Chief Justice John Roberts, could restrain the EPA from using its authority under the 1970 Clean Air Act to devise rules that go beyond regulating emissions from individual power plants. Roberts’ opinion states that the Clean Power Plan would have permitted EPA ​“a transformative expansion of its regulatory authority” to ​“adopt a regulatory program that Congress had conspicuously declined to enact itself,” meaning a carbon cap-and-trade system, which has failed to advance over the past decade.

Many energy experts say that this kind of regulator flexibility is critical to achieving rapid and cost-effective reductions in greenhouse gas emissions that threaten to cause catastrophic harm to the planet, and are already causing heat waves, floods and other extreme weather events.

From wind and solar power to electric vehicles and batteries, ​“our options for cost-effectively generating and distributing clean electricity to power homes, businesses, and transportation have grown far beyond sole reliance on fossil-fuel power plants,” said Jeff Dennis, general counsel for the Advanced Energy Economy trade group, in a Thursday email. ​“This Supreme Court decision denies EPA authority to take commonsense steps to consider how they could be used to reduce greenhouse gas emissions.”

Heather Zichal, president of the American Clean Power Association trade group, agreed in a statement that Thursday’s decision ​“prevents EPA from using what has long been recognized as the easiest, cheapest, and best way to reduce pollution in the power sector: switching from higher-emitting plants to affordable, reliable clean power.”

That view was echoed in the dissent from the court’s three liberal justices, written by Justice Elena Kagan. ​“The enacting Congress told EPA to pick the ​‘best system of emission reduction’ (taking into account various factors),” Kagan writes. ​“In selecting those words, Congress understood — it had to — that the ​‘best system’ would change over time.”

By undermining the ability of the EPA to adapt to changing environmental conditions and technology developments, Thursday’s ruling strips the agency of ​“the power Congress gave it to respond to ​‘the most pressing environmental challenge of our time,’” Kagan writes, citing language from the 2007 Supreme Court ruling in Massachusetts v. EPA, which established EPA’s authority to regulate greenhouse gases under the 1970 Clean Air Act.

The plaintiffs that brought the case against the EPA did not ask the Supreme Court to overturn this 2007 precedent, and Thursday’s decision leaves that authority intact.

That means that ​“EPA still has authority under this decision, and in fact a legal obligation, to regulate greenhouse gas emissions,” said Max Sarinsky, a senior attorney at the Institute for Policy Integrity at the New York University School of Law.

At the same time, Thursday’s decision could open the door for polluting industries to mount much broader attacks challenging how federal agencies interpret laws designed to protect the public from the harms those industries cause, he said.

The broader implications of the Supreme Court’s ruling 

The decision’s potential role in undermining federal agencies’ authority stems from the rationale the Supreme Court’s conservatives pointed to when they decided to hear the case in the first place, as well as the legal concept they enlisted to bolster their final decision, legal experts say.

Many experts have questioned the court’s decision to hear a case challenging a federal regulation that never went into effect. The Trump administration had sought to replace the Clean Power Plan with its own much weaker rule, dubbed the Affordable Clean Energy Rule. But that proposed rule was struck down in early 2021 by the U.S. Court of Appeals for the Washington, D.C. Circuit, which left the Biden administration with the freedom to craft a new rule.

The decision by the Supreme Court’s conservatives to take up the case against the defunct Clean Power Plan triggered worries from climate advocates that the court intended to preemptively restrict EPA’s ability to craft regulatory solutions to climate change.

In their dissent, the court’s three liberal justices called the majority’s decision an improper ​“advisory opinion” that seeks to restrict EPA’s future rulemaking. The Supreme Court has traditionally shied away from preemptively stepping into such matters. ​“But this Court could not wait — even to see what the new rule says — to constrain EPA’s efforts to address climate change,” the dissenting justices write.

Roberts’ majority opinion casts aside this objection, citing the potential that future EPA rulemaking could lead to the same ​“allegedly wrongful behavior” that the Clean Power Plan’s opponents have cited.

Other legal experts are concerned that Thursday’s decision cites as a core rationale what’s known as the ​“major questions doctrine,” a conservative legal theory. It holds that courts have expansive power to strip federal agencies of their authority to interpret how they’re allowed to implement laws passed by Congress if such implementations raise ​“major questions” about the law’s intent.

Jay Duffy, an attorney with the Clean Air Task Force trade group who represented the American Lung Association and other respondents in the case, said in a statement that Thursday’s opinion ​“does portend a shift to limiting agency power to address evolving problems pursuant to general directions from Congress. Unless Congress is hyper-specific, this Court seems bent on limiting agencies’ discretion when they take measures to protect public health, safety, and the environment.”

What options are left for federal action to combat carbon emissions?

Climate and clean-energy groups reacted to Thursday’s court decision by calling on Congress to pass legislation that could bolster federal efforts to achieve net-zero carbon emissions by 2035, in keeping with the Biden administration’s stated target.

It’s not clear how the Supreme Court’s decision might change Congress’ ambitions for climate and energy legislation, however. Last year, Democrats in Congress proposed the Clean Electricity Performance Program, which would have required the country’s electricity utilities to reduce their carbon emissions on an annual basis, but it was opposed by Senator Joe Manchin, the West Virginia Democrat whose vote is vital in an evenly divided U.S. Senate, so the proposed measure is now dead.

Weaker climate legislation is currently being debated in Congress, but odds of its passage are growing increasingly slim, again in large part because of lack of support from Manchin. That’s put pressure on the Biden administration to seek out ways to use executive actions to move ahead on its broader climate goals, including its target of cutting electricity-sector emissions to zero by 2035.

While Thursday’s decision could restrict the Biden administration’s efforts to combat climate change, it doesn’t completely undermine them, said conservative lawyer Jeff Holmstead, a partner with law firm Bracewell LLP and former deputy administrator for the EPA under the George W. Bush administration.

“This decision can be enormously important in terms of administrative law in general,” Holmstead said in a Tuesday interview. ​“But I don’t know that it will have a big impact on the future trajectory of greenhouse gas emissions.”

To support that view, Holmstead noted that the Clean Power Plan’s emission-cut target for 2030 had already been achieved by the U.S. power generation sector by 2019. That achievement was due not to EPA regulation, but rather to a combination of federal tax credit incentives and state-level policies supporting clean energy, growing demand for clean energy from large corporate buyers, voluntary efforts by utilities to shift to cleaner resource mixes, and the broader economic factors of cheap solar, wind and (until recently) natural gas that have driven record-high coal power plant closures over the past half-decade.

To be clear, numerous analyses have found that the U.S. power sector will need much stronger regulatory drivers and much more investment to decarbonize enough to hit the Biden administration’s climate goals. But Holmstead pointed out that some key barriers to achieving this increased pace of clean energy deployment, such as power grid capacity and solar and wind interconnection bottlenecks, already fell outside EPA’s power to regulate.

Meanwhile, ​“EPA clearly has all the authority it needs to regulate the transportation sector,” which has become the top source of carbon emissions as power generation has grown cleaner, he said, as well as the authority to regulate methane emissions, a significant source of global warming, from oil and gas producers, agricultural operations and landfills.

But Sarinsky of NYU noted that the ​“major questions” rationale used to support Thursday’s decision on EPA’s authority over power-sector emissions is already being cited by opponents of federal agency regulatory power in other arenas. Those opponents have in their sights regulatory actions including EPA’s authority to limit vehicle tailpipe emissions, the Securities and Exchange Commission’s plan to require climate risk disclosures from publicly traded companies, and the Federal Energy Regulatory Commission’s plan to consider the climate-change impacts of new fossil gas pipelines, he said.

Thursday’s decision ​“certainly does not decide any of these cases,” Sarinsky said. But it does ​“broadly apply this ​‘major questions doctrine’ to suggest that courts should look skeptically at any time an agency seeks to apply its authority more broadly or innovatively.”