In June, at the end of its 2021-2022 Term, the United States Supreme Court issued a ruling with far reaching implications for the ability of the Environmental Protection Agency (“EPA”) to regulate Greenhouse Gas (“GHG”) emissions and any attempt to limit the impacts of climate change. In a ruling by the conservative majority of the Court in West Virginia v. Environmental Protection Agency, the Court held that an EPA regulation attempting to regulate GHG emissions exceeded the authority of the EPA. The decision is unusual as the rule was never fully implemented. While the rule, known as the Clean Power Plan, adopted in 2015, was intended to implement what the EPA found was the “best system of emission reduction” or ” the BSER, for the kind of existing source at issue”, the rule was stayed by the Court in 2016.
The rule was based on an analysis undertaken by the EPA.
“Having decided that the BSER was one that would reduce carbon pollution mostly by moving production to cleaner sources, EPA then set about determining ‘the degree of emission limitation achievable through the application’ of that system. … The Agency recognized that, in translating the BSER into an operational emissions limit, it could choose whether to require anything from a little generation shifting to a great deal. It settled on what it regarded as a ‘reasonable’ amount of shift, which it based on modeling how much more electricity both natural gas and renewable sources could supply without causing undue cost increases or reducing the overall power supply. … The Agency ultimately projected, for instance, that it would be feasible to have coal provide 27% of national electricity generation by 2030, down from 38% in 2014.”
Thereafter, the rule was repealed by the Trump administration on the grounds that the rule reflected a shift in the energy generation mix at the grid level, rather than setting energy generation levels at individual facilities, which had previously been the practice. The Trump administration interpreted the statutory authority of the EPA as being limited to regulation at the facility level and thereafter promulgated what it called the Affordable Clean Energy (“ACE”) Rule which addressed equipment upgrades and operating practices at the facility level. This was followed by cases brought in the DC Circuit by a number of states challenging the action of the EPA repealing the Clean Power Plan and implementing ACE.
“ The Court of Appeals consolidated the cases and held that EPA’s ‘repeal of the Clean Power Plan rested critically on a mistaken reading of the Clean Air Act’—namely, that generation shifting cannot be a ‘system of emission reduction’ under Section 111. 985 F. 3d 914, 995. The court vacated the Agency’s repeal of the Clean Power Plan and remanded to the Agency for further consideration. It also vacated and remanded the ACE rule for the same reason. The court’s decision was followed by another change in Presidential administrations, and EPA moved the court to partially stay its mandate as to the Clean Power Plan while the Agency considered whether to promulgate a new Section 111(d) rule. No party opposed the motion, and the Court of Appeals agreed to stay its vacatur of the Agency’s repeal of the Clean Power Plan.”
The Supreme Court took up the appeal. The EPA argued that the states lacked standing but the Court determined that they were injured because the rules in the Clean Power Plan required them to “..more stringently regulate power plant emissions…”. Likewise, the Court reject the EPA argument that the issues were moot because the EPA had determined not to enforce the Clean Power Plan, as it was planning on promulgating a new rule. The Court rejected that argument stating that it was not absolutely clear the alleged behavior would not recur.
The Court found this to be a “major question” case, meaning it involved an issue so broad in its economic and political significance that it provided “a reason to hesitate” that Congress intended to confer authority to implement the rule. “Under this body of law, known as the major questions doctrine, given both separation of powers principles and a practical understanding of legislative intent, the agency must point to “clear congressional authorization” for the authority it claims.…”
Thus the Court held:
“Capping carbon dioxide emissions at a level that will force a nationwide transition away from the use of coal to generate electricity may be a sensible “solution to the crisis of the day.” New York v. United States, 505 U. S. 144, 187 (1992). But it is not plausible that Congress gave EPA the authority to adopt on its own such a regulatory scheme in Section 111(d). A decision of such magnitude and consequence rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body. The judgment of the Court of Appeals for the District of Columbia Circuit is reversed, and the cases are remanded for further proceedings consistent with this opinion.”
In her dissent, Justice Kagan strongly disagrees with the majority’s interpretation of the authority of the EPA, noting in part:
“The subject matter of the regulation here makes the Court’s intervention all the more troubling. Whatever else this Court may know about, it does not have a clue about how to address climate change. And let’s say the obvious:The stakes here are high. Yet the Court today prevents congressionally authorized agency action to curb power plants’ carbon dioxide emissions. The Court appoints itself—instead of Congress or the expert agency—the decisionmaker on climate policy. I cannot think of many things more frightening.”