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The U.S. Supreme Court's conservative majority moved June 30 to constrain the U.S. Environmental Protection Agency's authority to regulate greenhouse gas emissions from existing power plants.
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The court's conservative justices in a 6-3 opinion found that the Obama-era Clean Power Plan, a 2015 rule that never took effect, adopted an approach to curbing power plant emissions that exceeded the agency's authority.
According to the majority, the Clean Air Act does not authorize the EPA to cap planet-warming emissions from existing power plants at a level that would result in an industrywide shift away from fossil fuels. That authority would need to be expressly given to the agency by Congress pursuant to a legal standard known as the "major questions doctrine," the majority held in an opinion written by Chief Justice John Roberts.
In a joint dissent, the court's liberal justices argued that the decision will strip the EPA of power given by Congress to respond to "the most pressing environmental challenge of our time."
The White House was quick to condemn the court's decision.
"This is another devastating decision from the Court that aims to take our country backwards," a White House spokesman said in a statement. "Our lawyers will study the ruling carefully, and we will find ways to move forward under federal law. At the same time, Congress must also act to accelerate America's path to a clean, healthy, secure energy future."
The EPA rules
At issue are two rules the EPA issued to address greenhouse gas emissions: the Clean Power Plan issued under former President Barack Obama and the Affordable Clean Energy rule issued under former President Donald Trump.
The Clean Power Plan relied on an array of "outside the fence line" emission reduction measures such as coal-to-gas generation shifting and emission trading schemes, as well as "inside the fence line" efficiency upgrades for existing plants. It was projected to cut U.S. power-sector carbon emissions by 32% by 2030, relative to 2005 levels.
However, the Clean Power Plan was stayed by the Supreme Court in 2016 and ultimately never took effect. Nevertheless, market forces allowed the industry to meet that target before the 2022 start date of the program.
The Affordable Clean Energy rule repealed and replaced the Clean Power Plan. It focused exclusively on a menu of efficiency upgrades for existing coal plants and was estimated to cut U.S. power-sector emissions by less than 1% by 2030 compared to a baseline scenario with no rule in place. But that rule also never took effect after the U.S. Court of Appeals for the District of Columbia in January 2021 vacated and remanded it.
The D.C. Circuit reasoned that it rested on an impermissibly narrow reading of Section 111(d) of the Clean Air Act. That section of the statute requires the EPA administrator to identify the "best system of emission reduction" for existing power plants.
The Trump administration said the only lawful reading of that section of the statute, which covers existing fossil fuel-fired power plants, prohibited the Clean Power Plan's systemwide approach. But the D.C. Circuit disagreed, reasoning that the Affordable Clean Energy rule ignored the electric utility industry's long-standing practice of generation shifting to comply with Clean Air Act rules.
A number of legal challenges by a coalition of Republican-led states and coal producers seeking to reinstate a rule were then consolidated for the Supreme Court's consideration.
The Supreme Court's decision
In a 37-page majority opinion, the court's conservative majority found that the case at hand was justiciable, even though the Biden EPA is in the midst of responding to the D.C. Circuit's remand.
Plaintiffs in the case — including Westmoreland Coal Co. and The North American Coal Corp. — had asked the court to review whether Congress intended to give the EPA power to make decisions of vast "economic and political significance" under Section 111(d) of the Clean Air Act.
The justices concluded that the only interpretive question before the court was more narrow: whether the "best system of emission reduction" identified by the EPA in the Clean Power Plan was within the agency's authority under Section 111(d).
"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 climate crisis, the majority said. "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 Supreme Court, therefore, reversed the D.C. Circuit's decision to toss the Affordable Clean Energy rule and remanded it for further proceedings consistent with its opinion. Joining Roberts in the decision were Justices Samuel Alito, Clarence Thomas, Brett Kavanaugh, Neil Gorsuch and Amy Coney Barrett.
Liberal justices dissent
Justice Elena Kagan led the court's three liberal judges in an over 30-page dissent to the June 30 opinion.
"Today, the Court strips the Environmental Protection Agency of the power Congress gave it to respond to 'the most pressing environmental challenge of our time,'" Kagan wrote, referencing the court's description of climate change in its Massachusetts v. EPA ruling from 2007.
Kagan described the environmental and human toll of a warming climate, saying that "if the current rate of emissions continues, children born this year could live to see parts of the Eastern seaboard swallowed by the ocean."
The conservative majority's limits on the EPA's authority "fly in the face of the statute Congress wrote," according to Kagan, adding that Section 111(d) permitted generating-shifting by allowing the EPA to select the "best system of emission reduction" for power plants.
"The 'best system' full stop — no ifs, ands, or buts of any kind relevant here," the dissent read. "The parties do not dispute that generation shifting is indeed the 'best system' — the most effective and efficient way to reduce power plants' carbon dioxide emissions. And no other provision in the Clean Air Act suggests that Congress meant to foreclose EPA from selecting that system."
Kagan said the majority opinion rested on the claim that generation-shifting is "too new and too big a deal for Congress to have authorized" under Section 111(d), an assertion the justice said was "wrong."
Kagan added that Congress made a broad delegation under the statute so the EPA could respond appropriately to "new and big problems" and let expert agencies address significant issues when they arise.
"The majority today overrides that legislative choice," the dissent stated. "In so doing, it deprives EPA of the power needed — and the power granted — to curb the emission of greenhouse gases."
Turning to the major questions doctrine, Kagan said the current Supreme Court is "textualist only when being so suits it." Such doctrines "magically appear as get-out-of-text-free cards" if the textualist method frustrates a broader goal, Kagan said.
"Today, one of those broader goals makes itself clear: Prevent agencies from doing important work, even though that is what Congress directed," Kagan said.
Next steps for EPA
In April, EPA Administrator Michael Regan told a U.S. Senate committee that the agency will be "ready to go" with a new proposal following the high court's decision. But the EPA does not plan to issue a new greenhouse gas proposal for existing power plants until March 2023, according to the latest version of its regulatory agenda.
Clean Air Act regulations often take more than two years to be finalized and litigated to their legal conclusion, meaning a Republican administration could seek to repeal and replace a final rule yet again if Democrats fail to maintain control of the White House in 2024.
In addition to greenhouse gas regulations, the Biden EPA is also pursuing an "integrated approach" to regulating existing power plants that include rules targeting coal ash pollution and smog-forming emissions. (West Virginia v. EPA, No. 20-1530)
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