Article United States: Supreme Court Limits EPA’s Authority to Tackle Climate Change

On June 30, 2022, the United States Supreme Court ruled that Congress did not authorize the Environmental Protection Agency (EPA) in Section 111(d) of the Clean Air Act to devise emission caps such as the “generation shifting” approach in the Clean Power Plan. (West Virginia v. Environmental Protection Agency, No. 20-1530 (2022).)

Clean Air Act

The Clean Air Act (CAA) authorizes the EPA to regulate power plants by setting a “standard of performance” for their emission of certain pollutants into the air that may be different for new or existing power plants. (42 U.S.C. § 7411(a)(1).) In each case, the standard must reflect the “best system of emission reduction” (BSER) that the agency has determined to be “adequately demonstrated” for the particular category of power plant. (§§ 7411(a)(1), (b)(1), (d).)

The New Source Performance Standard program of section 111 directs the EPA to list categories of stationary sources that it determines to cause or significantly contribute to air pollution that may reasonably be anticipated to “endanger public health or welfare.” (West Virginia v. Environmental Protection Agency, Opinion at 4; 42 U.S.C. § 7411(b)(1)(A).) Section 111(b) focuses on federal standards of performance for new sources in each category, while section 111(d) authorizes the regulation of certain pollutants from existing sources. (Opinion at 5; 80 Fed. Reg. 64711.)

In 2015 the EPA issued the Clean Power Plan (CPP), which established emission guidelines for states to follow in limiting carbon dioxide emissions from existing power plants. (80 Fed. Reg. 64661.) The new rule concluded that the BSER for existing coal-fired power plants included a requirement that such facilities reduce their own production of electricity, or subsidize increased generation by natural gas, wind, or solar sources. (Opinion at 2.) This change from higher-emitting to lower-emitting producers of electricity is referred to as “generation shifting.” (Opinion at 8.)  For authority, the agency cited section 111 of the CAA.

Background to the Case

The current case considers the EPA’s authority granted under the CAA and distinguishes between the agency’s approaches in both the CPP and the Affordable Clean Energy rule (ACE). The Supreme Court considered “whether the broad conception of the EPA’s Authority is within the power granted to it by the CAA.” (Opinion at 2.)

This case spans multiple presidential administrations from President Obama to President Biden. It is worth noting that the CPP never went into effect. (Opinion at 10.) In 2019 the EPA repealed the CPP, concluding it did not have authority to issue its generation-shifting measures due to the major questions doctrine, which provides that a clear statement by Congress is required for a court to conclude that Congress intended to delegate its authority. (Opinion at 11–12.) Therefore, the EPA created the ACE Rule to replace the CPP, which “determined that the application of its BSER measures would result in only small reductions of carbon dioxide emissions.” (Opinion at 12.) The United States Court of Appeals for the District of Columbia Circuit held that the EPA’s repeal of the CPP rested on a mistaken reading of the CAA that could encompass generation shifting. It also held that the major questions doctrine did not apply. The D.C. Circuit Court vacated the EPA’s repeal of the CPP and the ACE Rule and remanded it to the agency for further consideration. (Opinion at 13.) The parties defending the repeal of the CPP all filed petitions for certiorari. The Supreme Court granted the petitions and consolidated the cases. (Opinion at 13.)

Decision

In the 6–3 decision authored by Chief Justice Roberts, the Supreme Court ultimately held that while capping carbon dioxide emissions at a level that forces a nationwide transition away from coal to generate electricity may be sensible to solve the climate crisis, it is not plausible that Congress gave the EPA the authority to adopt on its own such a regulatory scheme in section 111(d). (Opinion at 31.) The court explained that a “decision of such magnitude and consequence” rests with Congress itself or an agency under its clear delegation. (Opinion at 31.)

Most notably the court’s opinion rested on the major questions doctrine. The court articulated the major questions doctrine as precedent, stating that there are extraordinary cases in which the history, the breadth of authority an agency has asserted, and that assertion’s political and economic significance provide a reason to hesitate when concluding that Congress conferred such authority. (Opinion at 17 (citing FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 159 (2000).)

The court reasoned that before 2015 the EPA had always set emissions limits under section 111 that were based on the application of measures that would reduce pollution by causing the regulated source to operate more cleanly. (Opinion at 20–21.) It had never devised a cap by looking to a “system” that would reduce pollution simply by “shifting” polluting activity “from dirtier to cleaner sources.” (Opinion at 21.) The EPA admitted that understanding areas such as electricity transmission requires policy or technical expertise not traditionally needed in EPA regulatory development, yet it claimed that Congress had tasked it alone under section 111(d) to decide how Americans get their energy. (Opinion at 25.) Nevertheless, the court found “little reason” to presume Congress would task the EPA with such decisions when it has no comparative expertise. (Opinion at 25.)

Notable Separate Opinions

In a concurring opinion joined by Justice Alito, Justice Gorsuch agreed with the case’s outcome but provided additional observations regarding the major questions doctrine. (Concurrence at 2.) Justice Gorsuch drew on the major question doctrine’s roots in Article I of the U.S. Constitution, which vested “[a]ll [federal] legislative powers … in Congress” (Concurrence at 3), as well as the importance of the separation of powers to ensure the government does not “inadvertently cross constitutional lines” (Concurrence at 8).

Justice Kagan dissented in an opinion joined by Justice Breyer and Justice Sotomayor. Justice Kagan noted that the court had never used the term “major questions doctrine” before (Dissent at 15) and argued that the majority opinion rests on one claim alone: that generation shifting is too new to have been authorized by Congress (Dissent at 5). However, the dissenting opinion noted that a key reason Congress makes broad delegations like section 111 is so an agency may respond to new and large problems. (Dissent at 5.) Justice Kagan concluded that the court had prevented the congressionally authorized agency from exercising action to curb power plants’ carbon dioxide emissions and that, through its decision, “the Court appoints itself, instead of Congress or the expert agency, the decision-maker on climate policy.” (Dissent at 33.)

Conclusion