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 create new carbon regulations that require technologies such as carbon capture, which would be much more expensive than the one rejected by the court. 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. 

Science is clear that nations will not have many years to prevent the devastating effects of global warming. Chief Justice John Roberts only made a passing reference to this reality in his opinion. The court was divided on consequential decisions this term, 6 to 3, with Republican-appointed judges 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 to Have 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. Analysts believe the West Virginia v. EPACould prove to be equally important, turning the clock back in the pre-New Deal era of charting a smaller federal agency role. 

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. The Biden EPA was clearly expecting such a result. Early on, the agency indicated that it did not intend to reinstate the Clean Power Plan, which was an Obama-era approach to regulating global warming gases. Joe Goffman (head of air pollution policy at the agency) was silent about the alternative approach that the EPA was considering at his confirmation hearing before Congress last week. “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. This would have allowed states to set carbon limits and allow them to switch to cleaner sources.

The court interprets the law to mean that EPA can only limit emissions within the fenceline of each 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.

These direct orders from the government are often rejected by industries. 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. However, 20 states, including North Dakota and West Virginia, which are both dependent on fossil fuels, requested that the court limit EPA authority. This was even before the Biden administration could 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 admissions more expensive than it needed to be.”

Doniger, who was responsible for the EPA’s air pollution policy during the Clinton administration, stated that the decision affirms that EPA has the authority to establish technology-based standards and should act quickly. “This is a tremendously urgent problem, and this is a significant authority that EPA still has,” he said.

Regardless of what approach EPA chooses to take, the future holds 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.

Conservative legal circles embraced the idea of applying this reasoning in a wider context to reduce 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. Prior to Thursday’s EPA decision, agencies had to prove that their regulations were permissible by the text of the laws made in 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 sees more litigation about agency authority. The courts will decide what is a major issue and whether Congress has sufficiently clarified 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 presented a different view of the history and evolution of regulation. He stated that Congress established broad principles that are used by executive branch agencies to address new and changing circumstances.

“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. American women might be surprised at the amount of progress made in all these areas if they could travel back in time. 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.”

Experts predict that litigation will ensue over whether agency actions under the new court principles are legal in light of climate change and other important issues. The ambitious goal of putting the United States on a path to net-zero emission by 2050 was set forth by the Biden administration. It must overcome the obstacles of a divided Congress and the new hurdles imposed by the Supreme Court.