Supreme Court Setback in West Virginia v. EPA Doesn’t Mean the End of U.S. Climate Action

By Denny Franzkowiak

By Alex Guillot, Law and Policy Clerk

The Supreme Court’s decision in West Virginia v. EPA is a blow to the EPA’s ability to regulate greenhouse gas emissions from power plants. However, the EPA retains significant authority over the regulation of greenhouse gas emissions, and other efforts to tackle climate change across the country continue. 

What the Supreme Court said

In a 6-3 decision, the Supreme Court held that the EPA exceeded the authority granted by Congress under the Clean Air Act (CAA) in placing limits on greenhouse gas emissions from power plants using “generation shifting.” “Generation shifting” refers to the approach under which EPA required the power sector to shift electricity production from coal to natural gas, and then to even cleaner energy sources such as wind and solar. This process would have required operators to either reduce the plant’s own production of electricity, build or invest in lower-emitting electricity production, or purchase emission allowances or credits as part of a cap-and-trade regime. By focusing on the power sector generally, generation shifting would have been a stronger, more effective tool to reduce emissions and to reach national climate goals. 

To make the determination that the CAA did not authorize EPA to use “generation shifting,” the Court relied on the “major questions doctrine” (MQD). According to that doctrine, the conservative justices assert that in certain “extraordinary cases,” where an agency seeks to regulate in new ways on issues with major economic or political consequences, the agency “must point to a clear congressional authorization for the power it claims.” However, the Court’s majority opinion did not provide a specific test or standard for when the doctrine applies. Instead, the Court’s guidance on the doctrine’s application consisted of highly subjective criteria such as whether an agency’s action qualifies as “extraordinary,” whether the agency’s “expertise” matches the problem, or whether a statute is “long-extant” or not.

Finding that the MQD applied, the Supreme Court required EPA to point to a “clear congressional authorization” that allowed it to use generation shifting as a “best system of emission reduction” under Section 111(d). Concluding that there was no such clear statement, the Court held that EPA lacked the authority to use generation shifting to reduce emissions under the CAA. 

EPA’s Authority

The West Virginia decision is undoubtedly a setback to EPA’s ability to regulate greenhouse gas emissions from the energy sector. However, the ruling did not remove EPA’s authority to regulate greenhouse gas emissions at power plants altogether and the agency retains substantial authority to do so. EPA can still set standards for existing power plants under Section 111(d) of the CAA so long as the new “best system for emission reduction” does not require generation shifting from fossil fuel to clean energy. In other words, future EPA rules will likely stick if they are based on a more narrow interpretation of the agency’s authority. In terms of Section 111, the Court recognized EPA’s authority to regulate carbon emissions from existing coal plants based on a “technology-based approach” which the agency had previously used that “focuses on improving the emissions performance of individual sources.”

Moreover, EPA can set standards to regulate greenhouse gas emissions under other provisions of Section 111 of the CAA. For instance, EPA can regulate greenhouse gas emissions from new power plants under section 111(b). The agency can also set standards under other sections of the CAA, including from mobile sources under Title II. Additionally, public health rules related to conventional air pollutants were also left intact by the decision. Thus, EPA has ample authority to tackle air pollution and the climate crisis. 

EPA’s next moves on climate action 

Following the ruling, EPA is planning to enact tougher restrictions on coal plants to reduce pollutants like soot and nitrous oxides, and to force the cleanup of water contamination from coal plants. Those rules will have a side-benefit of also reducing greenhouse gas emissions and may make some coal plants too expensive to continue to operate, resulting in more of them closing down. EPA can and should also finalize rules addressing carbon pollution from existing power plants and new power plants under sections 111(d) and 111(b) respectively. 

These rules include strengthening the Mercury and Air Toxics Standards (MATS) rule that limits mercury, arsenic and other toxins from coal plants, as well as the  National Ambient Air Quality Standards (NAAQS) for small particulate matter and ozone. EPA should also finalize the “Good Neighbor Plan,” which addresses soot and smog emissions across state borders by seeking to require “upwind” states to achieve additional nitrogen oxide (NOx) emissions reductions to help “downwind” receptors to meet the 2015 Ozone NAAQS. With a stronger set of regulations and public health rules, EPA can continue its efforts to tackle climate change and air pollution that harms public health and that disproportionately impacts environmental justice communities. 

The role of Congress and the states

In addition to EPA action on climate change, Congress can pass laws addressing carbon emissions or to clearly give EPA the authority to use generation shifting. However, without congressional action, the ruling allows delaying the transition to clean energy. For example, states unwilling to act on climate change that would otherwise have been required to make plans to reduce carbon emissions through generation shifting can now also stall on climate action. 

On the other hand, states aiming to reach their climate goals, such as Oregon, will pursue their efforts to lower their carbon emissions. For instance, HB 2021, Oregon’s clean energy bill that limits greenhouse gas emissions from power plants, will be implemented through state regulation of utilities instead of by the EPA. Additionally, 21 states have now set 100% clean energy goals through the state legislature or governor’s office, in addition to D.C. and Puerto Rico.

While the ruling is a setback at a time when we cannot afford setbacks, it should not prevent us from pursuing ambitious climate action.  

 

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