This post was authored by Trang Do, a summer associate.
In West Virginia v. EPA, the Supreme Court limited the authority of the United States Environmental Protection Agency (EPA) to reduce greenhouse gases by setting emission guidelines for existing power plants, characterizing the energy generation shifting strategy proposed in the Clean Power Plan (CPP) as an overreach of the agency’s power. In a 6-3 decision, with the three liberal justices dissenting, the Court held that the authority to adopt a regulatory program that would significantly alter how the nation’s energy is generated fell under an “extraordinary case” of the major questions doctrine. West Virginia v. EPA 597 U. S. ____ (2022). The major questions doctrine requires that a federal agency have “clear congressional authorization” when acting on issues of great “economic and political significance.” Id. (citing Utility Air Regulatory Group v. EPA, 573 U. S. 302, 324).
The June 30, 2022 ruling marked the end of a years-long legal battle over two different EPA rules spanning three Presidential administrations. Neither rule ever went into effect. The EPA established the CPP in 2015 under the Obama Administration, with the objective of addressing climate change by reducing carbon emissions from existing power plants through a combination of heat rate improvements and overarching industry-wide changes aimed at shifting the generation profile of America’s energy sector. Several industry groups and Republican attorneys general filed suit, arguing that the regulations set forth in the CPP exceeded the EPA’s authority under Section 111 of the Clean Air Act. The Supreme Court issued a stay barring the CPP from going into effect, while the EPA reconsidered the rule.
In 2019, the Trump Administration repealed the CPP and issued the less-stringent Affordable Clean Energy (ACE) Rule, which limited emissions-reducing measures to only those that could be implemented within power plants, such as equipment upgrades resulting in heat rate improvements. Several Democrat-led states, cities and environmental groups challenged the ACE Rule as not going far enough to address climate change. The D.C. Circuit agreed and struck down the ACE Rule in January 2021. In response, a group of states led by West Virginia, successfully petitioned the Supreme Court to review the D.C. Circuit’s decision.
The Supreme Court considered whether Congress granted the EPA broad authority under Section 111(d) of the Clean Air Act to establish emission guidelines that would have set emissions caps for existing stationary sources, such as power plants, based on the CPP’s approach of reducing reliance on coal-fired plants and shifting to cleaner energy sources, such as natural gas-fired plants, wind and solar. Section 111 grants EPA authority to set emissions standards for stationary sources “achievable through the best system of emission reduction” (BSER) that the agency determines has been “adequately demonstrated.” 42 U.S.C. § 7411.
Chief Justice Roberts, writing for the majority, noted that that before the EPA issued the CPP in 2015, the agency set performance standards under the Clean Air Act for 50 years based on measures that could be implemented on-site at individual power plants to reduce pollution. West Virginia, 597 U. S. ____ (2022). Chief Roberts wrote that the EPA’s interpretation of Section 111(d) to allow for pollution reduction strategies that go beyond the fenceline of regulated facilities within the source category, such as measures performed at the grid level, was not only unprecedented, but constituted a “fundamental revision of the statute, changing it from [one sort of] scheme of . . . regulation” into an entirely different kind. Id. (citing MCI Telecommunications Corp. v. American Telephone & Telegraph Co., 512 U. S. 218, 231).
The Court did not hold that the EPA could never set carbon emissions at levels that would require a nationwide transition from coal, but rather 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.” West Virginia, 597 U. S. ____ (2022).
With the CPP and ACE repealed, the EPA under the Biden administration has yet to issue a new rule. President Biden has announced ambitious goals to reduce greenhouse gas emissions and achieve a net-zero economy by 2050. Press Release, President Biden Renews U.S. Leadership on World Stage at U.N. Climate Conference (COP26) (Nov. 1, 2021), https://www.whitehouse.gov/briefing-room/statements-releases/2021/11/01/fact-sheet-president-biden-renews-u-s-leadership-on-world-stage-at-u-n-climate-conference-cop26/. West Virginia not only limits the avenues available to the EPA to combat climate change as it deems appropriate, but also calls into question the scope of all federal agencies to act on important issues without an express grant from Congress.