The Supreme Court’s ruling in West Virginia v. US Environmental Protection Agency (EPA) last week reduced EPA’s authority to regulate emissions from power plants at the national level absent specific legislative directives. Resources for the Future scholars speak to some of the implications of this recent decision.
What are your overall thoughts on the case?
Aaron Bergman: Many onlookers will regard it as good news that the Supreme Court did not foreclose the regulation of carbon dioxide emissions under the Clean Air Act. On the other hand, this ruling will likely make future regulations more challenging and potentially more costly.
Nathan Richardson: Superficially, the case doesn’t change much. The Clean Power Plan it strikes down was already dead, and the outside-the-fence-line regulatory tools that the court rejected had been vulnerable since 2016. I doubt the Biden EPA had planned to rely significantly on those tools in their replacement rule. The decision does not go further than that with regard to Clean Air Act climate authority—it does not, for example, question the applicability of Section 111 to climate, much less the foundations of Clean Air Act climate authority in Massachusetts v. EPA. So, on the surface, the ruling is not a major blow to EPA’s climate regulatory agenda.
Nevertheless, I think that the superficial reading is too rosy. The Supreme Court is clearly skeptical of EPA climate regulation. Since Massachusetts v. EPA, the authority of EPA to regulate climate has been curtailed in every case that the Supreme Court has considered. Any future attempts by EPA to innovate will be met with similar skepticism.
What is the significance of applying the major questions doctrine in the context of Clean Air Act regulations?
Aaron Bergman: I am not a lawyer, but what is and is not a “major question” seems to be up to the justices. This lack of clarity introduces an additional layer of uncertainty in any future rulemaking—environmental or otherwise.
Nathan Richardson: The resurgent major questions doctrine gives the six justices in the majority, open opponents of administrative-agency power, a powerful and nearly unbounded tool to limit regulatory power—not just EPA action on climate, but any significant agency action on any issue is now subject to much greater judicial scrutiny. There has been much focus on whether the court would overrule the Chevron doctrine of deference to agency interpretations of law. That ship has long sailed—the court has not meaningfully deferred to agencies in years.
The major questions doctrine instead reverses that deference, licensing judges (including lower-court judges) to replace agency judgments, and even legislative text, with their own preferences. Every agency general counsel is now surely advising rulemakers to tread lightly and sweating over what already-implemented rules will be challenged next.
Congress can, in principle, override major questions by writing new laws with explicit delegations of authority. But Congress rarely has done so in the past, for practical and political reasons, and is especially unlikely to do so now, given partisan and structural deadlock. Even were Congress to miraculously do so, the nondelegation doctrine lurks in the background—and the court may reject clear legislation as too broad to be constitutionally permissible.
One of the main points of this case is whether the Clean Power Plan took a more expansive definition of reducing emissions than what was within its authority under the Clean Air Act’s Section 111(d). What does the narrower reading of the “best system of emission reduction” mean for future Clean Air Act policies?
Aaron Bergman: With respect to Section 111(d), while the court says it did not explicitly limit regulation to being based on measures that occur directly at the plant, it certainly implied that those measures would be the most likely to survive judicial review. This narrow reading will limit the options available to EPA as the agency tries to design a cost-effective regulation that still achieves substantial carbon emissions reductions.
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Nathan Richardson: EPA can still try to do a lot of different things. It may, for example, still be able to require some fuel-switching from coal to gas, and to allow a trading system after imposing standards based on inside-the-fence reductions. But again, innovation is likely to be met with skepticism by the Supreme Court. EPA probably should focus on aggressive but traditional regulation (like, for example, stringent particulate-matter and ozone standards), rather than innovative and flexible programs like the Clean Power Plan. That’s bad for climate, but also for industry and the economy, as those programs likely will be more expensive than flexible alternatives.
Dallas Burtraw: I think those points are well stated. I would add that, by preserving a role for addressing greenhouse gas emissions in the Clean Air Act, the court precludes progress on the nuisance cases that were emerging against power companies 15 years ago; for example, American Electric Power Company v. Connecticut. Opinions will vary about whether those cases were likely to be impactful, but the cases definitely were a concern to the companies. These nuisance cases cannot proceed as long as the regulatory authority of EPA remains intact.
What are some potential regulations that EPA could implement within the bounds of the ruling?
Aaron Bergman: Looking at technologies that can reduce emissions at an individual power plant, the options that come to mind are efficiency improvements, cofiring with natural gas or biomass, and carbon capture. Under Section 111(d) of the Clean Air Act, EPA could determine what level of emissions is achievable at fossil fuel generators using some or all of these technologies and set that as a maximum emissions rate. The states would then determine a plan as to how best to achieve those targets.
Nathan Richardson: Regulating more complex sectors, like agriculture—or those with fewer technological (rather than systemic) options for emissions reductions, like cement or refining—will be much more difficult, if not impossible. The implications for vehicle standards—the most successful EPA climate program—are unclear, though those programs should be on firmer ground.
What does all this mean for US climate goals?
Aaron Bergman: While this ruling does potentially reduce the amount of carbon emissions reductions that can be achieved through executive action, the long-term goals of a zero-carbon grid by 2035 and net-zero economy-wide emissions by 2050 were always going to require legislation—and that remains the case.
