U.S. Supreme Court Restricts EPA Authority to Regulate Power Plant Emissions

The U.S. Supreme Court on June 30 restricted the Environmental Protection Agency’s authority to regulate power plant emissions under the Clean Air Act. The 6-3 decision in favour of coal interests in West Virginia v. EPA, is expected to negatively impact the Biden administration’s wider attempts to combat climate change.

The court invoked the “major questions doctrine” to justify the decision. Under that doctrine, the administrative agencies must have clear congressional authorization when they claim the power to make decisions of vast economic and political significance.

At issue are two EPA initiatives to limit emissions: 2015 Clean Power Plan, or CPP, issued under former President Barack Obama and the Affordable Clean Energy, or ACE, rule finalised in 2019 under the Trump administration, replacing more stringent Obama-era restrictions.

Obama’s signature Clean Power Plan established the first federal emission guidelines for power plants, setting a target for each state, with a goal of reducing emissions by 32 percent below 2005 levels by 2030. The U.S. Supreme Court halted the rule in 2016 pending review in the D.C. Circuit Appeals Court.

In January 2021, the U.S. Court of Appeals for the D.C. Circuit vacated the ACE rule for regulating power plant emissions, finding that the rule “hinged on a fundamental misconstruction” of the Clean Air Act. That ruling was seen as a win for the Biden administration’s energy agenda, which prioritizes clean energy and climate action.
Republican states led by West Virginia, a major coal producer, along with coal companies and industry groups, challenged EPA’s authority to regulate emissions arguing that such authority belongs to Congress.

In the June 30 decision, the Supreme Court found that capping emissions at a level that will force a nationwide transition away from coal-powered electricity generation could be a sensible solution to combat climate change, but “it is not plausible that Congress gave EPA the authority to adopt on its own such a regulatory scheme. The court said 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 Supreme Court, therefore, reversed the D.C. Circuit’s decision to vacate the ACE rule and remanded it for further proceedings consistent with its opinion.

President Biden called the decision devastating, saying that it risks damaging the nation’s ability to maintain clean air and combat climate change. Biden said his legal team will work with the Department of Justice and affected agencies to review decisions and find ways under federal law to cut pollution, including pollution that causes climate change.

The ruling inhibits the EPA from using its influence to set requirements that shifts the country’s energy production from higher emitting sources of GHG, like coal to lower emitting sources, such as wind and solar. The decision is a major impediment for the Biden administration’s program to combat climate change, specifically the goal to eradicate carbon emissions from power plants by 2035.