Supreme Court of The United States

Supreme Court of The United States (SCOTUS): In a decision that is being touted as a setback in the fight against climate change, the SCOTUS with a ratio of 6: 3, while deciding the instant petition challenging the authority of the Environment Protection Agency (hereinafter EPA) to regulate carbon dioxide emissions from existing coal- and natural-gas-fired power plants as per the Clean Power Plan, held that under Section 111(d) of the Clean Air Act, the EPA was not granted the authority to devise emission caps based on the generation shifting approach by the Congress.

Factual Matrix: The Clean Air Act authorized the EPA to regulate power plants by setting a “standard of performance” for their emission of certain pollutants into the air. The standard varied for new and existing plants, but it was mandated that in each case the “best system of emission reduction” that the Agency has determined to be “adequately demonstrated” for the particular category, must be reflected.

Since passage of the Act 50 years ago, EPA had exercised this authority by setting performance standards based on measures that would reduce pollution by causing plants to operate more cleanly. However, in 2015, the EPA issued a new rule concluding that the “best system of emission reduction” for existing coal-fired power plants included a requirement that such facilities reduce their own production of electricity, or subsidize increased generation by natural gas, wind, or solar sources.

The Issue: Whether the afore-stated broader conception of EPA’s authority is within the power granted to it by the Clean Air Act?

Majority Observations: The majority opinion was delivered by John Roberts, CJ., in which Clarence Thomas, Samuel Alito, Brett Kavanaugh, Neil Gorsuch and Amy Coney Barrett, JJ., joined.

  • The majority stated that major questions doctrine, given both separation of powers principles and a practical understanding of legislative intent, an agency must point to “clear congressional authorization” for the authority it claims. It was observed that the instant matter is a “major questions case” as the EPA “claimed to discover an unheralded power representing a transformative expansion of its regulatory authority in the vague language of a long-extant, but rarely used, statute designed as a gap filler”. The majority pointed out that the discovery allowed the EPA to adopt a regulatory program that Congress had conspicuously declined to enact itself. Thus, there is every reason to “hesitate before concluding that Congress” meant to confer on EPA the authority it claims under Section 111(d).
  • Prior to 2015, EPA had always set Section 111 emissions limits based on the application of measures that would reduce pollution by causing the regulated source to operate more cleanly, and never by looking to a “system” that would reduce pollution by “shifting” polluting activity “from dirtier to cleaner sources”. However, in such regulation, EPA set the emissions cap based on the use of “technologies that could be installed and operational on a nationwide basis” in the relevant timeframe, “The Agency nodded to the novelty of its approach when it explained that it was pursuing a “broader, forward-thinking approach to the design” of Section 111 regulations that would “improve the overall power system,” rather than the emissions performance of individual sources, by forcing a shift throughout the power grid from one type of energy source to another. This view of EPA’s authority was not only unprecedented; it also effected a “fundamental revision of the statute, changing it from [one sort of] scheme of . . . regulation” into an entirely different kind”.
  • The majority pointed out that as per EPA’s view of Section 111(d), Congress implicitly tasked it with balancing the many vital considerations of national policy implicated in the basic regulation of how Americans get their energy. However, in view of EPA’s admission that issues of electricity transmission, distribution, and storage are not within its traditional expertise, the majority noted that there is a doubt that the Congress ever intended to delegate decisions of economic and political significance, such as ‘how much coal-based generation there should be over the coming decades‘, to any administrative agency.

The Dissent: Justice Elena Kagan filed the dissenting opinion in which Justices Sonia Sotomayor and Stepehen Breyer joined.

  • Terming climate change to be the “the most pressing environmental challenge of our time”, the dissenting Judges expressed their disappointment over the majority decision of stripping the EPA of the Congress given power to respond to it. The Judges observed that Congress charged EPA with addressing the potentially catastrophic climatic harms, which included regulation of fossil-fuel-fired power plants via Section 111 of the Clean Air Act, which directed EPA to regulate stationary sources of any substance that “causes, or contributes significantly to, air pollution and that may reasonably be anticipated to endanger public health or welfare.
  • The dissenting Judges pointed out that right after the Obama administration issued the Clean Power Plan, this Court, in an unprecedented move, had stayed its implementation. The effect of the Court’s order, followed by the Trump administration’s repeal of the rule, was that the Clean Power Plan never went into effect.
  • The judges observed that while the majority finds in impossible for the Congress to grant such a wide power to the EPA, but “that is just what Congress did when it broadly authorized EPA in Section 111 to select the “best system of emission reduction” for power plants”. The Clean Air Act was major legislation, designed to deal with a major public policy issue. As Congress explained, its goal was to “speed up, expand, and intensify the war against air pollution” in all its forms and Section 111(d) ensured that EPA regulates existing power plants’ emissions of all pollutants.
  • Regarding delegations of power, the dissenting Judges stated that the Congress knows about how government works in ways courts do not. “Congress knows what mix of legislative and administrative action conduces to good policy. Courts should be modest”. However, expressing dismay over the majority ruling, the Judges noted that Section 111, if naturally read, authorizes EPA to develop the Clean Power Plan-to decide that generation shifting is the “best system of emission reduction” for power plants churning out carbon dioxide. “Nothing in the Clean Air Act, or any other statute, suggests that Congress did not mean for the delegation it wrote to go as far as the text says. In rewriting that text, the Court substitutes its own ideas about delegations for Congress’s. And that means the Court substitutes its own ideas about policymaking for Congress’s. The Court will not allow the Clean Air Act to work as Congress instructed. The Court, rather than Congress, will decide how much regulation is too much”.

In the closing comments, Justice Elena Kagan strongly stated that, “Whatever else this Court may know about, it does not have a clue about how to address climate change (…) The stakes here are high. Yet the Court today prevents congressionally authorized agency action to curb powerplants’ carbon dioxide emissions. The Court appoints itself-instead of Congress or the expert agency-the decision-maker on climate policy. I cannot think of many things more frightening”.

[West Virginia v. Environmental Protection Agency, 2022 SCC OnLine US SC 11, decided on 30-06-2022]

*Sucheta Sarkar, Editorial Assistant has prepared this brief.

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