On June 30, the U.S. Supreme Court ruled that the EPA does not have authority, under the Clean Air Act, to set up an emissions trading program to lower power plant carbon emissions. Given that the power sector creates almost a third of U.S. energy-related CO2 emissions the court’s ruling in West Virginia v. EPA will impact efforts to combat climate change.

The decision was criticized by President Biden, U.S. Speaker of the House of Representatives Nancy Pelosi, and activists like Bill McKibben and the Sunrise Movement.

To help us better understand the ruling I reached out to the following legal experts:

  • Craig N. Oren, Professor Emeritus of Law, Rutgers Law School
  • Dena Adler, Research Scholar at Institute for Policy Integrity at NYU School of Law
  • Michael B. Gerrard, Director, Sabin Center for Climate Change Law, Columbia Law School

Collectively, this group has over thirty-five years of experience teaching at law schools, clerking for state Supreme Court justices, leading advocacy efforts, working for the Energy and Commerce Committee of the U.S. House of Representatives, and litigating environmental law cases.

Major questions pain

The Court’s 6-3 decision striking down the Obama-era Clean Power Plan (CPP) said that if the agency wants to implement such a program, Congress must pass or amend legislation authorizing it.  Their decision was based on the so-called “Major Questions” doctrine, which says federal agencies cannot implement major policies without express permission from Congress.  The Court has never used this doctrine to invalidate EPA regulations before.

The panelists disagreed with the court’s decision and worried about how it will impact the EPA’s ability to cut carbon emissions.  In their view, a program like CPP would have accelerated greenhouse gas emissions (GHG) reductions in the power sector. Losing this tool was a setback for climate efforts.

In addition, to disagreeing with the substance of the ruling, Professor Oren argued the Court should not have heard the case in the first place. In his view, the court was reviewing the D.C. Circuit’s decision to set aside the Trump Administration’s rewrite/withdrawal of the CPP.  But the Biden administration was not going to implement that rewrite, and the invalidation of the Trump Administration rewrite would not have revived CPP.   Thus, as Justice Kagan noted, the decision amounts to an advisory opinion, something the Supreme Court has always stressed that it does not give.

Some thought it could have been worse.  Given the Court’s ruling on abortion, Professor Gerrard worried the Court would take a drastic step and overrule Massachusetts v. EPA, the 2007 decision which says the Clean Air Act requires EPA to regulate greenhouse gases if it finds GHGs endanger human health or public welfare (which EPA did find in 2009). Such a ruling would have further crippled efforts to combat climate change.

However, the majority did not touch the landmark 2007 ruling, which he said, “leaves standing the ability of EPA and other federal agencies to act on climate change, provided they do not adopt novel approaches that may be seen to go beyond an agency’s usual role.”

In Gerrard’s view, at the federal level, this is critical for the transportation sector.  As he stated, “The Supreme Court decision does not affect the government’s ability to control the largest source of greenhouse gases in the U.S. today, motor vehicles. EPA and the Department of Transportation are moving forward with requiring cleaner, more fuel-efficient cars and trucks.”

Tough times ahead?

One potential consequence, that each panelist feared could happen, would be more rulings based on the Major Questions doctrine. This would be a big change for the Court.  On this point, Dena Adler from NYU stated, “Until recently, this interpretive framework was little-used, and it remains poorly defined.”

In a polarized political environment, like America faces now, if this doctrine were used to strike down more agency action it could hamstring the government’s ability to address a host of big problems facing the country.

One irony, Professor Oren noted, was that the ruling may increase regulatory burdens on electricity generators. In his view, the only other effective large-scale means of controlling carbon dioxide emissions from existing power plants is carbon capture and sequestration (CCS).  A regulation based on imposing CCS would not necessarily be ruled out by the Court’s decision.

Oren’s argument is that if you wanted to hit the goals of the CPP by mandating CCS on existing plants it would likely cost companies more than the plan because CPP gives utilities the ability to decide how to cut emissions.

The case also likely forces climate advocates to shift focus.  Oren highlighted this point when he said, “Advocates of environmental protection have looked largely to courts and agencies to help accomplish their agenda. The Supreme Court’s conservatism limits the effectiveness of that strategy.” In reaction to this change, Oren suggested environmentalists look to legislative and electoral victories to advance their goals.

Game on

Despite the ruling, we should not lose sight of the fact that the energy transition continues in the power sector.  As Adler pointed out, “market trends have already driven the power sector to surpass the CPP’s goals and continue to drive the power sector away from coal.”

She also noted that the federal government has other levers to cut power sector emissions. The EPA can still regulate climate pollution from new and existing power plants, other stationary sources, and high-emitting sectors, such as transportation. In addition, the case did not touch on local and state governments’ ability to act on climate.

Professor Gerrard underscored Adler’s point when he said, “Most federal environmental standards are a floor, not a ceiling; and states can be more stringent.  A state controls the generating sources within its borders and can also require out-of-state generators that sell power into the state to meet the same emission standards as in-state generators. Anything a state could have done with the CPP, it can still do.”

So, while advocates of action on climate change lost in the Supreme Court, Adler could be right when she told me, “It is by no means game over.”