The U.S. Supreme Court on Monday showed some willingness to place new limits on the Environmental Protection Agency’s ability to regulate greenhouse gases from power plants, before President Joe Biden’s administration even has a chance to act on them.
At least five justices voiced some alignment with the arguments put forward by 20 red states and the coal industry that regulation of power sector carbon emissions would go far beyond what Congress intended when it passed the Clean Air Act in 1970 or amended it in 1990. The one Republican-appointed justice whose position was less clear, Justice Amy Coney Barrett, said it seemed that greenhouse gas pollution fell within the EPA’s purview. “There’s a match between this regulation and the agency’s wheelhouse,” she said.
But the foes of climate regulation, led by the state of West Virginia and a coalition of coal companies, argued that any regulation of the power system as a whole—a rule that pushes power providers to cleaner sources of energy like solar and wind—was not permitted.
The oral arguments in the case came the same day that the Intergovernmental Panel on Climate Change issued a dire report on climate impacts. “Delay is death,” United Nations Secretary General António Guterres said in a terse summary of the report’s findings.
But the litigation at the nation’s highest court could both delay and greatly complicate the Biden administration’s effort to curtail greenhouse gas pollution and put the United States on track to a net-zero emissions economy.
If the EPA tries to take on greenhouse gases under the Clean Air Act, “the agency really isn’t regulating emissions. It’s regulating industrial policy and energy policy,” said Yaakov Roth, a lawyer for Texas-based North American Coal Corporation. “It’s not actually saying, ‘Here’s how you can reduce your emissions.’ It’s saying, ‘Well, we can do the market differently in a way that we won’t need you at all.'”
But the Biden administration hasn’t made clear how it intends to regulate greenhouse gases from power plants. Those proposed new rules will come by the end of this year from the EPA, which plans to finalize them within a year, the government’s top litigator, U.S. Solicitor General Elizabeth Prelogar, told the court.
She argued that the coal case doesn’t belong before the court at all, since there’s no current regulation of power plant greenhouse gas emissions in place, and therefore, no harm to the states or coal industry that the Supreme Court could redress.
“Petitioners aren’t harmed by the status quo,” Prelogar said. “What they seek from this court is a decision to constrain EPA authority in the upcoming rulemaking. That is the very definition of an advisory opinion.”
None of the justices voiced disagreement with the principle that the Biden administration was pointing out—that the U.S. federal courts do not issue advisory opinions; instead, they rule on live cases and controversies. But Chief Justice John Roberts suggested that the red states were not looking for a legal ruling in the abstract, as Prelogar suggested. Instead, he saw the case as about whether the now-defunct Trump administration regulation of the power sector, the so-called Affordable Clean Energy (ACE) rule, should be reinstated.
Roberts summarized West Virginia’s position: “‘Just because there’s no regulation doesn’t mean we’re happy,’” he said. “They would like regulation according to their particular perspective. They’d like good regulation, which they think they had with ACE, and now they don’t have it.
“Why isn’t that a justiciable harm?” Roberts asked.
The chief justice’s view that the West Virginia case was properly before the court was probably the most significant blow to the Biden administration and the 23 states and a wide array of businesses, including electric utilities, which are supporting the notion that the Supreme Court should not set limits on the EPA’s power at this early stage.
Before oral arguments, observers saw either Roberts or Barrett as wildcards who could be the fifth and deciding vote in the case. Four of the justices appointed by Republican presidents—Neil Gorsuch, Brett Kavanaugh, Samuel Alito and Clarence Thomas—all have expressed support for a reading of the law that would limit the authority of regulatory agencies like EPA, allowing them only to do what Congress explicitly authorized.
West Virginia Solicitor General Lindsay See argued that the language of the Clean Air Act allows EPA to order technological approaches that reduce emissions at individual power plants, or “inside the fenceline” of power plants, but not that reduce emissions in the power system. All three of the justices appointed by Democrats voiced skepticism on this reading of the law.
“The actual words, unfortunately for your case, say ‘system,'” said Justice Elena Kagan. (The Clean Air Act’s actual words are that EPA can set performance standards, defined as “the application of the best system of emission reduction.”)
“It suggests that what Congress wanted to do, understanding that this was an area that was going to move very fast, and has lots of technical components to it,” Kagan said, “It wanted to give the agency flexibility to regulate as times changed, and as circumstances changed, and as economic impacts changed, all things that they could not possibly have known at the time.”
But See argued that the court should consider the case in light of the “major questions” doctrine, a rule of reasoning that the Supreme Court has applied in a handful of regulatory cases to make sure agencies like the EPA do not impose “vast” responsibilities on the private sector regarding major questions of economic and political import without clear direction from Congress.
Most notably, the Supreme Court applied the doctrine in its 2000 decision that the FDA did not have authority to regulate tobacco. In the view of See and other foes of EPA climate regulation, it is such a major question that the court should not give deference to the agency’s interpretation of the law when Congress had not spoken clearly.
“This is a major question because it allows EPA to determine what the power sector as a whole should look like and who can be in it,” said See. “It transforms the statute from something that is about how a particular source can operate more efficiently. This is major. This is new power.”
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For example, President Barack Obama’s Clean Power Plan—which the Trump administration repealed and replaced with its own rule—would have allowed states to use emissions trading to achieve carbon emissions reductions, she noted. But See said that Congress didn’t specify such an approach on carbon emissions. She also argued that Congress could have done so if it wanted to; it did specify the cap-and-trade or emissions trading in the 1990 amendments to the Clean Air Act for addressing acid rain.
Congress did not act on carbon emissions in 1990 because it was still early in the world’s understanding of global warming—two years before the United Nations Framework Convention on Climate Change. But Kavanaugh said the history of Congressional inaction on climate was important when considering West Virginia’s case.
“There were bills pending in Congress to do cap-and-trade for CO2 emissions, and ultimately, those did not pass,” Kavanaugh said. “What happened is the executive branch, as executive branches do, became unhappy with the pace of what’s going on in Congress and tried to do a cap-and-trade regime through an old and somewhat ill-fitting” law.
Without a ruling that EPA needed explicit instructions from Congress to act on carbon emissions, Alito said that the agency would be able to assert nearly unlimited power.
“What weight do you assign to the effects of climate change, which some people believe is a matter of civilizational survival, and the costs and the effects on jobs?” Alito asked the Biden administration’s lawyer. “I don’t see what the concrete limitations are.”
But Beth Brinkmann, a lawyer for a coalition of power companies that were arguing in support of the Biden administration, said that the Clean Air Act includes many limitations on EPA’s power. The law specifically says that the EPA must consider things like the costs of regulations and the remaining useful life of power plants.
“The purpose is to reduce emissions while maintaining power and energy,” said Brinkmann. “That’s what’s so important to the power companies about the reliability of this very complex power grid.”
She argued that West Virginia and the coal industry were seeking an interpretation of the law from the Supreme Court that in the end would result in less flexibility, and potentially more costs for the power industry.
The Supreme Court is expected to decide the case by the end of term this summer.