The Supreme Court’s EPA Ruling: A Loss of Authority for Federal Agencies or a Lesson for Conservatives in ‘Be Careful What You Wish For’?

In a finale to a Supreme Court term that radically reshaped American law, the court throttled the U.S. government’s power to act on the climate crisis.

But it could take many more lawsuits—and possibly, years—to see whether the Environmental Protection Agency can find some leeway to regulate greenhouse gases from power plants. With its authority now limited by the court’s ruling Thursday in West Virginia v. EPA, the agency could write new carbon regulations requiring technologies like carbon capture that would be far more expensive than the approach the court rejected. Or, the new principles laid out by the court could go even further in eroding the power of the EPA and any federal agency to address climate change or any of society’s biggest issues. 

The science is clear that there are not many more years for nations to act to stave off the catastrophic consequences of global warming. But Chief Justice John Roberts made only glancing reference to that reality in his opinion for a court divided just as it has been on other consequential decisions this term: 6 to 3, with Republican-appointed justices in the majority. 

“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 crisis of the day,'”  Roberts wrote. “But it is not plausible that Congress gave EPA the authority to adopt on its own such a regulatory scheme” under the section of the Clean Air Act that governs stationary sources of air pollution.

 “A decision of such magnitude and consequence rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body,” he wrote.

The court did not reverse—or even revisit—its 2007 decision that EPA has the authority to regulate greenhouse gases as pollutants under the Clean Air Act. In fact, West Virginia’s attorney general made clear from the start he was not seeking to overturn the landmark decision, known as Massachusetts v. EPA. Technically, the court’s ruling in the West Virginia case reversed a lower court’s ruling striking down the weak power plant regulations put into place by the Trump administration, rules that would have cut carbon emissions less than 1 percent. 

But the court’s decision clearly has limited what EPA can do under the Clean Air Act without further, explicit instruction from Congress—the kind of lawmaking on climate change that Congress has shown itself to be incapable of over three decades. Nevertheless, advocates of climate action and the Biden administration’s EPA maintain that despite the high court’s decision, the agency has both a duty, as well as some legal power, to act in the ways it can on carbon pollution from power plants and other sectors of the economy.

“While I am deeply disappointed by the Supreme Court’s decision, we are committed to using the full scope of EPA’s authorities to protect communities and reduce the pollution that is driving climate change,” said EPA Administrator Michael Regan in a statement. “We will move forward to provide certainty and transparency for the energy sector, which will support the industry’s ongoing efforts to grow our clean energy economy.”

Even the Power Industry Wanted a More Flexible Approach

The new restrictions on the EPA’s authority come a week after the court eliminated women’s constitutional right to an abortion after almost 50 years, and struck down New York’s 100-year-old restrictions on carrying concealed guns. Some analysts said the West Virginia v. EPA could prove to be just as monumental, turning the clock back to the pre-New Deal era in charting a smaller role for federal agencies. 

Roberts stopped short of the sweeping language many environmentalists feared, for example, by saying EPA had no power to act on climate change; instead, he focused on limiting EPA’s authority under one section of the Clean Air Act. And the Biden EPA clearly was expecting such a result. Early on, the agency indicated it did not plan to reinstate the Obama-era approach to regulating greenhouse gases, the Clean Power Plan. Joe Goffman, who heads up air pollution policy for the agency, was mum on exactly what approach the EPA was considering instead at his confirmation hearing before Congress last month. “We have identified different options for responding, depending on what the Supreme Court tells us the nature and contours of our authority are,” he said.

The options that are left for EPA, ironically, could be more restrictive and more expensive for the power sector than the cap-and-trade approach that the Supreme Court said was clearly outside the agency’s authority. Such an approach would have set carbon limits for each state, allowing them to shift electric generation to cleaner sources of power.

Instead, the court reads the law as saying EPA can only impose limitations on emissions within the fenceline of each individual power station. The think tank Resources for the Future has analyzed how the EPA could impose regulations limiting carbon emissions per megawatt-hour at coal power plants through technologies such as installing natural gas turbines onsite to assist in bringing down emissions—a strategy known as “co-firing” that some plants already have adopted to save money or address smog-forming pollutants. Or the agency could go even further, finding that carbon capture and storage is viable and cost-effective—the “best system of emissions reduction,” in the language of the law—and require that coal or natural gas plants install such technology to reduce their emissions. Congress, in fact, potentially made carbon capture and storage more viable by including $12 billion in direct support for the technology in last year’s bipartisan infrastructure bill.

Industries often abhor such direct prescriptions from government. In fact, the power industry intervened in the West Virginia case, filing an amicus brief and delivering oral arguments in support of EPA’s authority to take a more flexible approach to drive the electric system to clean energy. But 20 states, led by fossil fuel-dependent West Virginia and North Dakota and joined by the coal mining industry, asked the court to restrict EPA authority, even before the Biden administration had a chance to write its own greenhouse gas rules. 

“This approach that’s left under the Clean Air Act, while it can be quite effective still, is going to be less flexible, potentially,” said David Doniger, senior strategic director for climate and energy at the Natural Resources Defense Council. “And it could have the unexpected effect of making the control of these emissions more expensive than it needed to be.”

Doniger, who headed up air pollution policy at the EPA during the Clinton administration, said that the decision affirms that the agency has authority to set such technology-based standards and should do so quickly. “This is a tremendously urgent problem, and this is a significant authority that EPA still has,” he said.

But looming in the future, whatever approach EPA decides to take, is more litigation from the fossil fuel industry and its allies. And the Supreme Court decision in the West Virginia case gives foes of climate regulation a new tool: the “major questions doctrine.”

Major Questions Doctrine Makes a ‘Magical’ Appearance

The “major questions” standard was seldom used by the Supreme Court before the current term. It hearkens back to the reasoning that Justice Sandra Day O’Connor applied in the Supreme Court’s 2000 decision blocking a bid by the Clinton administration’s Food and Drug Administration to regulate cigarettes and smokeless tobacco. “We are confident that Congress could not have intended to delegate a decision of such economic and political significance to an agency in so cryptic a fashion,” she wrote.

In conservative legal circles, the idea of applying this reasoning more broadly gained currency as a way to rein in federal regulation. And in the current term, the first where Republican-appointed justices had a commanding six-vote majority, the court used similar reasoning to strike down two Covid-19-related decisions: the Centers for Disease Control’s temporary moratorium on evictions and the Occupational Safety and Health Administration’s vaccine-or-mask mandate.

Roberts cited those two cases in a lengthy discussion of why EPA regulation of greenhouse gases was one of those “certain extraordinary cases” where the court should view skeptically the EPA’s interpretation of its authority, unless there was explicit direction from Congress. “To overcome that skepticism, the Government must—under the major questions doctrine—point to ‘clear congressional authorization’ to regulate in that manner,” he wrote.

That marks a change for the court—at least in some cases. For nearly 40 years, the Supreme Court has given deference to agencies’ interpretation of the law unless it is found to be “arbitrary or capricious.” But regulatory foes have long sought reversal of that standard, and the justices chosen by Trump clearly favored limiting the principle that came to be known as the “Chevron doctrine,” after the 1984 case in which it was first articulated.

Justice Elena Kagan, on behalf of the three dissenting justices, noted that the court has never used the term “major questions doctrine” before Thursday’s EPA decision. Previously, agencies had to show that their regulations were permissible under the text of the laws made by Congress. Now, she wrote, “special canons like the ‘major questions doctrine’ magically appear.” She said one of the goals she sees the court seeking to achieve through such new standards is  to “Prevent agencies from doing important work, even though that is what Congress directed.”

Jody Freeman, director of the environmental and energy law program at Harvard University, said there is the potential for the “major questions” doctrine to have a major impact in blocking federal environmental, health, safety, worker and consumer regulation.

“This has implications well beyond this case and not just for environmental law,” she said on the Harvard program’s CleanLaw podcast recently. “It has implications for federal agency regulatory authority under old statutes that were broadly drawn precisely to give agencies flexibility.”

Freeman foresees the possibility of much more litigation over agency authority, with the courts deciding what is a major question and whether Congress has spoken clearly enough to allow agency action. In a concurring opinion, Justices Neil Gorsuch and Samuel Alito, suggested that there should indeed be broad application of the “major questions” doctrine to counter “the explosive growth of the administrative state since 1970.” 

“The framers believed that a republic—a thing of the people—would be more likely to enact just laws than a regime administered by a ruling class of largely unaccountable ‘ministers,'” Gorsuch wrote. 

Kagan painted a much different picture of the history of regulation, one in which Congress set out broad principles that are applied by appointees of the president in the executive branch agencies to address changing circumstances and new problems.

“Over time, the administrative delegations Congress has made have helped to build a modern Nation,” Kagan wrote. “Congress wanted fewer workers killed in industrial accidents. It wanted to prevent plane crashes, and reduce the deadliness of car wrecks… And it wanted cleaner air and water. If an American could go back in time, she might be astonished by how much progress has occurred in all those areas. It didn’t happen through legislation alone. It happened because Congress gave broad-ranging powers to administrative agencies, and those agencies then filled in—rule by rule by rule—Congress’s policy outlines.”

Now, on climate change, and perhaps on many other issues of importance for society, much litigation is ahead on whether agency actions are legitimate under the new principles outlined by the court, legal experts predict. The Biden administration, meanwhile, which came into office with the ambitious goal of putting the United States on course to net-zero emissions by 2050, must overcome not only the obstacle of a divided Congress, but new hurdles set by the Supreme Court.