SCOTUS Restricts EPA’s Ability to Regulate Carbon Emissions

On Thursday, the Supreme Court released one of its final opinions of the term restricting the Environmental Protection Agency’s (EPA) authority to regulate power-plant emissions in West Virginia v. EPA. The 6-3 decision held that Congress did not grant the EPA in Section 111(d) of the Clean Air Act the authority to devise emission caps based on the generation shifting approach the agency took in the Clean Power Plan. 

The Clean Power Plan was promulgated in 2015 under the Obama Administration and addressed carbon dioxide emissions from existing coal- and natural-gas-fired power plants. The plan relied on Section 111 of the Clean Air Act, which allows the EPA to regulate certain pollutants from existing sources, such as power plants, by implementing emission limits that states will have to comply with when setting the enforceable rules governing existing sources. The EPA derives the limit by determining the “best system of emission reduction” (BSER) for the kind of existing source at issue. 

In the Clean Power Plan, the EPA determined that the BSER for existing coal and natural gas plants included three types of measures, two of which involved what the EPA called “generation shifting” at the grid level which is a shift from higher-emitting to lower-emitting producers. This generation shifting was intended to reduce carbon dioxide emissions by implementing a sector-wide shift to cleaner and more renewable sources of electricity. 

In the opinion, authored by Chief Justice John Roberts, the Court stated that the EPA has the authority to regulate power plant emissions, but cannot shift the power generation of the Country’s electrical grids from fossil-fuel plants to cleaner sources, citing the Major Questions Doctrine. The Major Questions Doctrine creates a presumption that Congress intends to make major policy decisions itself and not leave those decisions to administrative agencies such as the EPA. Roberts wrote in the opinion that “[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 decision is viewed as a major blow to efforts to combat greenhouse gas emissions and climate change with heavy implications for the scope of federal administrative power and statutory interpretation. 

In a strongly worded dissent, Justice Kagan, argues that the Court stripped the EPA of the power Congress gave it to respond to “the most pressing environmental challenge of our time.” The dissenters argue that the majority’s interpretation of the Clean Air Act “fly[s] in the face” of the broad authority granted by Congress to the EPA to regulate carbon emissions through the Act and imposes an artificial restriction not found in the text of the statute. 

Justice Kagan ended the dissent writing, “The Court appoints itself—instead of Congress or the expert agency—the decisionmaker on climate policy.  I cannot think of many things more frightening.”