What did the Supreme Court decide?
In West Virginia v. Environmental Protection Agency (EPA), the conservative majority of the U.S. Supreme Court fenced the EPA’s ability to regulate carbon emissions in the power sector.
In the 6-3 decision [PDF], the court ruled that the Clean Power Plan established under the Barack Obama administration went beyond the EPA’s regulatory mandate. Specifically, the EPA had exceeded congressional authority by pushing utilities to make system-wide moves away from coal power generation and toward cleaner forms of electricity production, such as wind and solar energy.
How does the ruling limit the EPA and the federal government’s power to address climate change?
The majority opinion recognized EPA authority to regulate carbon dioxide emissions from the utility sector. However, it placed restrictions on how far that authority reaches.
Specifically, the six conservative justices formally embraced the major questions doctrine [PDF] in a majority opinion for the first time. That doctrine, Justice Neil Gorsuch wrote in his concurring opinion [PDF], is a response to “the explosive growth of the administrative state since 1970.” Skeptical of the scope of federal agencies’ regulatory reach, the majority held that in “extraordinary cases” where agency regulation is of “economic and political significance,” a federal agency must be able to point to clear congressional authorization for the power it asserts. The court concluded that the legislation relied upon by the EPA—Section 111(d) of the Clean Air Act—lacked the necessary evidence of congressional authorization needed to allow the expansion of the agency’s regulatory powers.
Congress has not passed major legislation regarding greenhouse gas emissions since 2008 and appears deadlocked over further legislative measures. As a result, any revised action proposed by the EPA will have to rest squarely on statutes likely drafted long before the dangers of climate change were widely recognized. This will hobble the EPA’s ability to reduce emissions from the power sector.
The decision affects all federal agencies, many of which contribute to climate policy by trying to reduce emissions or build resilience. Agency regulatory action now risks a court review under the major questions doctrine. The mere prospect of judicial review—even if the agency ultimately wins—will likely chill agency regulation and lead to significant delays as agencies determine the limits of their powers and then wait for the judiciary to test those assessments.
What is the urgency?
Ironically, the growth of the administrative state that Justice Gorsuch alleged has been matched by an explosion of carbon dioxide in the atmosphere. In 1970, when Congress first passed the Clean Air Act, carbon emissions stood at 325 parts per million (ppm). In 1990, when Section 111(d) was amended, emissions peaked at 357 ppm. In May 2022, they reached 421 ppm, the highest level in four million years.
As emissions climb, the earth’s temperature rises [PDF] and leads to bigger and hotter wildfires, more extreme heat, stronger storms, deeper droughts, and more widespread flooding. Indeed, a recent study found that 40 percent of Americans lived in counties impacted by climate change in 2021.
The majority decision will undermine the Joe Biden administration’s expressed intent to lead the global fight to reduce emissions. As Biden seeks to rally other countries, the court’s ruling will provide further evidence of the limited ability of the United States, the largest historical emitter and the second-largest current emitter, to meaningfully combat climate change at the federal level.
Is there an argument to be made to let the fossil fuel industry regulate itself?
Effective industry-driven regulation to curb global warming does not yet exist. Given the inaction to date—even in the face of known risks—it seems unlikely the fossil fuel industry on its own will produce the rapid, far-reaching, and transformative changes needed to address growing climate challenges.
The regulations that the Biden administration plans to roll out in 2023 must now fit within the narrower confines of this ruling. The EPA will face greater restrictions on its ability to drive a national transition to renewable energy. Still, renewable energy is the fastest-growing power source in the United States, with solar power representing the fastest-growing electricity source.
The EPA can take steps to function within its bounds. The agency retains the authority to implement power plant–specific regulations, such as heat rate improvements, co-firing with natural gas or wood chips, carbon capture, or some combination of these strategies, all of which can help to lower emissions.
Critically, the decision endows Congress with a more essential role to play in defining the regulatory reach of U.S. climate efforts. With federal agencies lacking broad regulatory authority in matters of “economic and political significance,” the legislative branch will hold the reins to enacting system-wide legislation or explicitly imbuing agencies with regulatory authority. Similarly, the decision endows courts with an added tool to police agency regulations. All of this spells more delays in addressing the climate threat in which, as the dissent warns, the stakes are high.