In one of the most significant decisions of 2022, the U.S. Supreme Court ruling in West Virginia v. Environmental Protection Agency has widespread implications for national action on climate change. Two ASP Fellows offer their analysis on the findings and implications, and what it means for climate action in the U.S. going forward. 

By ASP Adjunct Fellow Quinne Daoust

On June 30, 2022, the Supreme Court of the United States (SCOTUS) issued a ruling in West Virginia et al v. Environmental Protection Agency (WV v. EPA) which struck down a 2015 EPA regulation known as the Clean Power Plan, a move which severely impacts the federal government’s ability to swiftly address the ongoing climate crisis through regulating greenhouse gas emissions (GHG). In a 6-3 decision, the Court invoked a longstanding judicial principle known as the ‘major questions doctrine’ to require clearer congressional authorization for agency action in a time of record political polarization.

Background

Under the Obama administration, the Environmental Protection Agency (EPA) promulgated a rule known as the Clean Power Plan rule. This rule sought to shift the national share of coal-powered electricity to 27% by 2030. Its substance involved a scheme of “generation shifting” whereby power plants transitioned their electricity production from higher-emitting to lower-emitting systems over three phases. The EPA relied on Section 111(d) of the Clean Air Act (CAA) as the authoritative statute for this reductions scheme; in relevant part, this section grants the EPA administrator authority to determine the best system of emissions reduction (BSER) for existing emissions sources under the CAA’s purview.

In its ruling on WV v. EPA, SCOTUS held that the EPA’s “generation shifting” approach to BSER exceeded the agency’s authority under Section 111. It’s reasoning for doing so is rooted in the judicially-crafted major questions doctrine, requiring that agency decisions of extraordinary “economic and political significance” possess a “clear statement” from Congress authorizing action. For years, Congress has failed to pass major climate-related legislation; therefore, the EPA could not rest its actions on the clear authorization required by the Court’s majority.

The implications of the WV v. EPA decision will likely hamstring future emissions regulations under the Clean Air Act, but the impacts of the decision will permeate the current and future administrative state.

An Uncertain Climate Regulatory Environment

In previous cases, SCOTUS has typically afforded deference to agency action and rulemaking, provided that the action is a reasonable interpretation of its vesting statute. Known as Chevron deference after the landmark case Chevron, U.S.A. Inc. v. Natural Resources Defense Council, Inc., SCOTUS has often deferred to a wide variety of agency actions, from employee classifications under FLSA overtime laws to time limits on local telecommunication zoning requests, since its inception in 1984. This term, however, has signaled a fundamental ideological shift in approach—the Court’s decision in Alabama Association of Realtors v. Department of Health and Human Services to vacate the CDC’s second eviction moratorium and in National Federation of Independent Business v. Department of Labor to vacate private sector vaccine-or-test mandates, notably roll back the historically deferential role of the Court in evaluating the propriety of agency decision-making.

Moving forward, this decision further curbs this deference. Especially during an era of increasing political derision like today, it is likely that other federal statutes mandating agency action also lack the concision and clarity that SCOTUS would have presumably required to uphold the EPA’s action in WV v. EPA. While some scholars suggest this holding will serve as an incentive for members of Congress to negotiate comprehensive climate legislation, others recognize its repercussions posit a significant obstacle to executive climate action in an era where it may be most necessary.

Beyond the scope of carbon emissions regulations alone, widespread federal agency action will likely function more reservedly in establishing future climate and emissions rules. Due to this new narrowing of an ambiguous area of administrative authority, future rulemakings are also more likely be challenged to test SCOTUS’ construction of the major questions doctrine. The Securities and Exchange Commission’s (SEC) new climate disclosure rule, for example, is one many legal scholars have earmarked as likely to be litigated. This rule, among other provisions, would require publicly traded companies to periodically disclose detailed information regarding rates of greenhouse gas emissions and climate-related risks that may materially impact operations. Because this scheme presents a new area of regulation by the SEC, and one which Congress has refused to undertake in sessions past, experts predict the current conservative-leaning Supreme Court majority would approach it with similar scrutiny. Politically-conservative litigants may now recognize the favorable posture of the High Court to rein in the administrative state and curtail climate regulation.

The potential for litigation, in turn, will likely delay forthcoming federal government action in contemplation of arguments that statutory authority is too vague. This undermines the federal government’s ability to act at this critical juncture, where climate science reaffirms human influence on global warming and EPA research reflects increases in emission and electricity demand. Some informed observers, including former EPA Administrator and Republican Governor of New Jersey, Christine Todd Whitman, chair of the American Security Project (ASP)  Board of Directors, have said the Court is pursuing a political agenda and called this ruling a “body blow” to America that will make regulation more costly and cumbersome.

The Road Ahead

Those still calling for federal action on climate and GHG emissions still have other avenues to pursue. The Climate Protection & Restoration Initiative has filed a “Petition to Phase Out GHG Pollution to Restore a Stable & Healthy Climate.” The petition, filed in mid-June 2022, requires the EPA to “determine if GHGs present an unreasonable risk of injury to health or the environment” under the Toxic Substances Control Act. If such a determination is made, the EPA would be required to take action “to the extent necessary” to ensure that GHGs no longer present an unreasonable risk; at which point, if challenged and appealed to the Supreme Court, the Justices would have yet another opportunity to expand or curb EPA regulatory authority under other statutory language.  In the face of legislative paralysis, President Biden is reportedly considering declaring a national climate emergency. Invoking presidential emergency powers could allow for a number of different actions, including reinstating the 2015 crude oil ban, directing federal investments toward renewable energy, and incentivizing manufacturers to increase supplies of renewable energy technology. Several countries around the world, including Canada, South Korea, Japan, and New Zealand, have already declared climate emergencies, as has the European Parliament and several individual cities. Yet another agent of change comes from Capitol Hill, where recently introduced H.R. 8395 would reassert EPA authority to regulate GHG emissions via clear congressional authorization. The “EPA Regulatory Authority Act of 2022,” if enacted, skirts major questions doctrine issues in expressly granting the EPA authority under the Clean Air Act to employ regulatory measures on a market-wide basis. The wide ambit of policy solutions proposed in response to WV v. EPA forecasts a substantive shift in the federal inter-branch dynamic—and one rife for future clashes between Supreme Court and administrative state.

Climate Security in Focus is a blog series dedicated to exploring key elements of climate security that impact American interests both at home and abroad. The series aims to examine specific aspects of climate security issues in order to better understand climate policy challenges, facilitate conversation, and generate ideas.

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