The Supreme Court’s stunning decision to review the scope of EPA’s authority to limit emissions from power plants puts a damper on the Biden administration’s effort this week to trumpet the United States’ return to the international stage as a climate leader.
The justices sent shock waves through the legal world when they agreed Friday to consider a consolidated challenge from Republican-led states and coal companies stemming from a federal court ruling that struck down a Trump-era regulation gutting EPA’s climate rule for power plants (E&E News PM, Oct. 29).
The Supreme Court’s order comes as President Biden arrives today for the opening days of the 26th Conference of Parties, or COP 26, in Glasgow, Scotland, where countries will hammer out agreements to address climate change across the globe.
“The U.S. has a lot of making up to do, and this is particularly problematic for the talks,” said Karen Sokol, a law professor at Loyola University, noting that global leaders have been watching as Biden’s climate ambitions have been watered down in Congress. “And now the court has sealed another route.”
When the justices reach their ruling in the case, which they are expected to do by next summer, the decision could provide the first indication of how the court’s new 6-3 conservative majority will approach questions of the federal government’s role in curbing global climate change.
White House national climate adviser Gina McCarthy said yesterday that the administration believes the high court will uphold EPA’s ability to regulate carbon emissions across the electricity sector.
"The courts have repeatedly upheld the EPA’s authority to regulate dangerous power plant pollution," she told reporters on a call. She noted that the appeals court had struck down the Trump-era rule that would have weakened power plant regulations.
McCarthy said the White House is confident that the Supreme Court will rule in a way that affirms that “EPA has not just the right but the authority and responsibility to keep our families and communities safe from pollution."
Legal experts warned that it’s possible the Supreme Court could hamper the Biden administration’s goal of slashing U.S. emissions in half by 2030. A significant portion of those cuts would have to come from the power sector.
Biden is arriving in Glasgow without yet securing a vote in Congress on his plan to provide $550 billion to fight climate change. The centerpiece of Biden’s proposal, a clean electricity program, was jettisoned after Sen. Joe Manchin (D-W.Va.) raised opposition.
Sokol noted that the administration has sought to assure climate activists that it will be able to meet its goals with the climate package and “a strong regulatory authority.” But the Supreme Court’s move Friday could stymie EPA rulemaking.
The timing puts the administration in a “precarious position” at the talks, Achinthi Vithanage, associate director of environmental law programs at the Elisabeth Haub School of Law at Pace University, wrote in an email.
“Whether President Biden can convince the global community that the U.S. has adequate existing regulatory authority, notwithstanding the Supreme Court’s now imposed veil of uncertainty over that very authority, may be a determining factor in the success of the negotiations,” she wrote, adding she hoped it would not.
“The machinations of the U.S. Supreme Court should not be a reason for dillydallying” by any nations that have signed the U.N. Framework Convention on Climate Change, she said.
The framework was signed by 150 countries in 1992 to establish an international treaty to address human influence on global climate change.
Vithanage said Friday’s Supreme Court order may suggest that the justices have “designs on further defining the boundaries of delegation and regulatory authority."
“That it is doing so in a climate change context and (almost) on the eve of the largest international gathering for climate change diplomacy seems curiously coincidental, or dare I say it, notably convenient,” she added.
Biden’s EPA is currently planning to draft new rules after the U.S. Court of Appeals for the District of Columbia Circuit tossed out the Trump-era rule for coal-fired plants, the 2019 Affordable Clean Energy rule (Greenwire, Jan. 19).
Instead of reinstating the Obama-era Clean Power Plan — which interpreted the "best system of emission reduction" to include shifting generation to renewable energy or emissions trading — EPA had opted to start from scratch after the power sector had surpassed the 2015 rule’s emissions reductions target a decade early.
Now the scope of those plans could be in doubt, as the high court is set to review how expansively the agency can interpret its regulatory authority over existing sources under Section 111(d) of the Clean Air Act.
EPA did not respond to a request for comment on the Supreme Court’s order, but agency Administrator Michael Regan defended the agency’s authority Friday on Twitter.
"Power plant carbon pollution hurts families and communities, and threatens businesses and workers," he tweeted. "The Courts have repeatedly upheld EPA’s authority to regulate dangerous power plant carbon pollution."
Critics of the Biden administration’s regulatory proposals cheered the justices’ move.
"This decision by the Supreme Court to consider if the Trump administration’s energy plans were correct after all is a great way to kick off COP26 in Glasgow," said Devin Watkins, attorney for the Competitive Enterprise Institute, in an email.
West Virginia Attorney General Patrick Morrisey (R), who led one of the Supreme Court petitions, called the case "incredibly important" for determining whether EPA has "unfettered authority" to slash emissions.
"Biden is trying to impose a radical climate policy on Americans," he said in a statement Friday.
"The D.C. Circuit gave EPA a green light to unilaterally decarbonize the power sector and other industries,” Morrisey’s statement continued. But "the Constitution does not allow a federal agency to have that much power to reshape America.”
Agency powers
Several observers said the Supreme Court’s eventual ruling in the case could be limited to power plants, while others predicted a bigger blow to emissions regulation for other sectors.
"The issue just gets dumped back in Congress’ lap," said Jeff Holmstead, a partner at the law and lobbying firm Bracewell LLP, of the possible consequence of the court limiting EPA’s power.
"Any kind of meaningful regulatory program could be well off the table," he said.
A more concerning — but less likely — possibility would be if the high court used the case to more broadly undermine the regulatory authority of federal agencies.
"It’s possible that what the court is seeking to review here is Section 111(d) itself," said Michael Burger, executive director of Columbia University’s Sabin Center for Climate Change Law.
He referred to the part of the Clean Air Act that EPA used to regulate carbon emissions from existing power plants under former Presidents Obama and Trump.
"If that’s the case, the broadest threat here is not just about climate change, or about EPA’s authority, but it’s about the power of the court to review congressional authorizations of agency action," he said.
In a worst-case scenario, the high court could give itself authority to tell Congress "in almost any instance" that it has to be more specific about delegating authority to agencies, Burger added.
In their petitions to the Supreme Court, the coal companies and states targeting EPA’s power to regulate raised concerns about whether Congress had clearly given the agency the authority to address utility emissions on a broad, systemwide basis.
The challengers also asked the justices to weigh in on whether Congress could lawfully allow EPA to act on emissions under Section 111(d) of the Clean Air Act under the nondelegation doctrine, which says that lawmakers cannot hand off their legislative authority to executive agencies. The Supreme Court’s conservative wing has expressed interest in reviving the long-dormant legal doctrine.
That argument could threaten not only Biden’s rule proposals but also existing regulations.
The challengers have also cited the major questions doctrine to argue that Congress did not give EPA enough specific guidance under the Clean Air Act to craft a rule that allowed it to impose regulations beyond technological fixes that could be applied to an individual power plant.
D.C. Circuit Judge Justin Walker, a Trump appointee, cited the doctrine — which says that the nation’s most significant economic and political questions should be addressed by Congress, not the executive branch — in his dissent from the court’s ruling this year that struck down the Affordable Clean Energy rule.
The Trump regulation championed power plant upgrades “inside the fenceline” of existing facilities and argued that broader strategies like generation shifting and emissions trading regimes were not permitted under the Clean Air Act.
Biden’s options
The Supreme Court had initially said in its Friday order that it would consider whether EPA could regulate carbon emissions in one part of the Clean Air Act, if it was already regulating the sector under a separate provision of the statute.
A short time later, the court quietly changed its order to remove that question.
The Supreme Court’s change took “the killer issue off the table for Section 111,” but the major questions doctrine issue still leaves “a lot at stake,” said Vermont Law School professor Pat Parenteau.
“If [the court] adopts the most restrictive view of EPA’s authority, namely that any rule with major economic consequences requires explicit unmistakable delegation of power from Congress with clear limiting principles to prevent abuse,” he said, “that could have very broad implications for public health and environmental regulations across the board.”
In its initial order, the court had agreed to a coal company’s request to consider whether EPA could regulate power plants at all under the Clean Air Act’s Section 111(d) if the sector is already controlled under Section 112, which requires EPA to set maximum hazardous air pollutant emissions thresholds for major sources.
Opponents of the Obama-era Clean Power Plan have maintained that the "best system of emission reduction" applies only at the facility level.
"EPA cannot use that to force one facility to shut down in favor of a different type of facility (which may not even exist yet) that EPA likes more," said Watkins of the Competitive Enterprise Institute.
"The Clean Power Plan interpretation gives EPA a massive amount of power to reshape the entire economy as it sees fit, rather than focus on just ensuring the best technology available is used at the existing facilities," he added.
Yet despite the Supreme Court showdown, some legal analysts were optimistic the Biden administration could impose carbon regulations on the electricity sector.
"I do think it probably complicates EPA’s job and potentially disrupts the momentum that the administration is trying to build around their climate regulation and climate policy efforts," said Hana Vizcarra, a staff attorney at Harvard Law School’s Environmental & Energy Law Program.
She noted that EPA was already thinking about how to craft a rule that is likely to survive a challenge before the conservative-dominated Supreme Court. The agency will now need to consider whether it should move forward with a proposed rule as planned or wait to see how the Supreme Court comes down in the case.
"They probably were trying to move relatively quickly, knowing that the administration has some very aggressive goals they want to show action on," she said.
Legal experts had expected the Supreme Court to rule at some point on the extent of EPA’s authority to regulate greenhouse gases.
One silver lining for EPA may be that the agency will get an answer about the court’s views sooner rather than later, said Holmstead of Bracewell.
“This is unusual, but it actually probably saves EPA a lot of time and effort," he said. “I think they just have to put pens down until June.”
The consolidated Supreme Court cases are West Virginia v. EPA, North American Coal Corp. v. EPA, Westmoreland Mining Holdings LLC v. EPA and North Dakota v. EPA.
