Supreme Court Ruling Limits EPA’s Power to Reduce Power Plant Climate Pollution

July 7, 2022

A U.S. Supreme Court ruling limits the power of the U.S. Environmental Protection Agency to directly regulate greenhouse gas emissions and could provide an opening for industries to chip away at the federal government’s power to regulate toxic air pollution.

In a case brought by the attorneys general of 19 fossil fuel-dependent states, including Indiana, the Supreme Court ruled that the EPA cannot directly regulate greenhouse gas emissions, the gases that trap heat in the atmosphere and cause life-altering climate changes, because Congress did not specifically empower it to do so when it wrote the legislation that empowered the EPA to regulate air pollution, the Clean Air Act.

“Capping carbon dioxide emissions at a level that will force a nationwide transition away from the use of coal to generate electricity may be a sensible ‘solution to the crisis of the day.’ But it is not plausible that Congress gave EPA the authority to adopt on its own such a regulatory scheme in Section 111(d). A decision of such magnitude and consequence rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body,” Chief Justice John Roberts wrote in the Court’s West Virginia v. EPA opinion.

The U.S. Supreme Court majority opinion in West Virginia v. EPA

The EPA was established in 1970 after several air and water pollution events, like Ohio’s Cuyahoga River repeatedly catching fire due to its high chemical content, pushed Republican President Richard Nixon to call for the federal government to act on improving environmental quality for economic reasons. The EPA’s first administrator was former Indiana Rep. William Ruckelshaus.

Congress gave the EPA authority over air pollution through the Clean Air Act, which, along with subsequent amendments, specifically allows the agency to govern how much ozone, carbon monoxide, particulate matter, lead, sulfur dioxide, nitrogen oxide and other air pollution is emitted.

In Massachusetts v. EPA, the Supreme Court in 2007 ruled that under the language of the Clean Air Act, the EPA had the authority to regulate greenhouse gas emissions as “air pollutants.” Even with the blessing of the Court, lawmakers never amended the Clean Air Act to specifically state that the EPA could regulate greenhouse gas emissions.

The omission allowed the Court’s current lineup to rule that the agency did not have the power to make sweeping, industry-wide and potentially coal industry-killing regulations without a specific mandate from Congress to do so.

The Court's decision will limit the EPA's ability to regulate the electric generation sector, which emits a quarter of total U.S. greenhouse gas emissions.

Environmental Law & Policy Center executive director Howard Learner said the Court’s ruling did not overrule Massachusetts v. EPA, but basically restricts EPA actions on greenhouse gas emissions to individual facilities.

“The court says, ‘Agencies have only those powers given to them by Congress, and we presume Congress didn't intend to shift the authority for making major policy decisions to the agency, but it wanted to make those decisions itself,’” said Learner. “The Court criticizes the EPA for using Section 111(d) of the Clean Air Act as empowering it to, in the words of the Court, ‘substantially restructure’ the American energy market. What the Court concludes is that EPA can’t adopt a significant rule [on greenhouse gas emissions] beyond the fence line of a power plant.”

About 25% of all U.S. greenhouse gas emissions come from the electricity production sector due to the fact that about 60% of all electricity produced in the country comes from burning fossil fuels like coal and natural gas.

That is especially true in Indiana, where about 53% of the electricity produced in-state is made by burning coal, 31% is made by burning natural gas and 16% is produced through renewable energy sources, like wind or solar.

Fossil fuel combustion releases toxic pollutants and greenhouse gases like carbon dioxide and methane, which trap heat in the atmosphere.

Since the middle part of the 20th century, humans have accelerated the rate of greenhouse gases in the atmosphere, changing the earth’s climate in different ways.

In Indiana, climate change has made the state hotter and wetter overall.

The state is 1.2 degrees Fahrenheit warmer on average than 1895, and temperatures are expected to rise about 5 degrees more by mid-century. The increased heat raises the likelihood of heat-related illnesses, like heat exhaustion and heat stroke, negatively impacts air quality, extends allergy season and creates more favorable conditions for some pests and invasive species. The heat is also projected to cause an increase in cooling demand, which will spur more fossil fuel combustion.

Source - Indiana Climate Change Impacts Assessment

Climate change has also led to Indiana experiencing 5.6 inches more precipitation per year on average than it did in 1895. The precipitation is falling in shorter, more intense periods, leading to extreme swings between periods of increased flood risk, which requires expensive mitigation efforts to prevent, and long periods without rain.

Source - Indiana Climate Change Impacts Assessment

In Indianapolis, National Weather Service records indicated the city experienced above-average precipitation levels between February and March of this year, but the city then experienced a dip in precipitation in May and June.

In May, about 4.8% of the state was rated as “abnormally dry,” but by June that number grew to 88% and about 10% of the state was experiencing a moderate drought. The city experienced the eighth-driest June on record and the driest June since 2012.

NOAA National Integrated Drought Information System drought tracking for Indiana in May and June 2022.

The EPA collects information on greenhouse gas emissions through its Greenhouse Gas Reporting Program, but does not directly regulate how much carbon dioxide and other greenhouse gases are emitted by all power plants.

The Obama administration attempted to enact an EPA rule in 2015 called the Clean Power Plan that would, among other things, regulate the amount of carbon dioxide emitted by plants.

The plan was seen as a threat to the coal industry, and the Republican attorneys general from several coal-dependent states, including former Indiana Attorney General Greg Zoeller, sued to stop its implementation. The Supreme Court issued a stay preventing the rule from taking effect, and the rule was left in legal limbo as the next administration came to power.

The coal-friendly Trump administration, in concert with the coal industry, weakened existing rules affecting power plants and set the foundation for the Supreme Court’s 2022 ruling.

Both of Trump’s EPA administrators had direct ties to the fossil fuel industry. Scott Pruitt, was a former Oklahoma attorney general that took in hundreds of thousands of dollars in fossil fuel industry contributions. Andrew Wheeler, who took over after Pruitt resigned, was a coal industry lobbyist.

The administration targeted plans that sought to limit power plant emissions by using tactics like interpreting cost-benefit analyses in a way that would allow companies to claim the plans are too expensive to implement, raising the bar on emissions targets and repealing or withdrawing regulations whenever possible.

The Trump administration introduced its own emissions control plan, the Affordable Clean Energy Rule, which delegated authority over greenhouse gas emissions reductions to states. Under the plan, a state could choose to have little, if any, regulation on greenhouse gas emissions. The final version of a rule also included a full repeal of the Obama Clean Power Plan.

President Donald Trump also managed to get three associate justices nominated and confirmed during his term – Associate Justice Neil Gorsuch, a skeptic of “modern administrative law” and son of Anne Gorsuch Buford, who served as the first female EPA administrator until she resigned after being investigated for mismanaging the Superfund program; Associate Justice Brett Kavanaugh, who regularly sided with business interests in environmental cases and argued the EPA could not regulate greenhouse gas emissions because it would cost companies too much money; and Associate Justice Amy Coney Barrett, who called the cause of climate change “a very contentious matter of public debate,” although 99.9% of all peer-reviewed scientific papers have found that climate change is mainly caused by human activity.

The American Lung Association and the American Public Health Association filed a lawsuit to challenge the ACE Rule and the Obama rule repeal in 2019, and the rule was thrown out by a federal court on the final full day of the Trump administration.

The Supreme Court took the rare step in 2021 of deciding to take up a review of the case despite the Biden administration saying it would not resurrect the ACE Rule and the Clean Power Plan but would instead write its own rule.

ELPC senior attorney Scott Strand said the Court should not have taken up the case.

“There is no rule for the court to review. The Clean Power Plan isn't in effect. The EPA is working on a new rule, but it's not done yet, and they should have waited until that new rule was adopted,” Strand said. “They used a doctrine called the voluntary cessation doctrine, which was the idea that when a party that's been violating the law voluntarily ceases unlawful conduct, it won't moot a case unless there's an absolute assurance that that unlawful conduct won't repeat itself. That's what the Court cited. But what's been what's missing in the court's opinion is several decades of law saying that exception doesn't apply to the government.”

University of Notre Dame associate professor Alan Hamlet, who has researched climate change effects for more than two decades, said the Court’s decision would allow politicians to protect major sources of carbon pollution, which he said will ultimately lead to increased local climate change impacts.

“The Supreme Court’s decision to limit the EPA’s oversight of CO2 emissions from powerplants to individual actions affecting a single plant effectively cuts off the EPA’s ability to mandate widespread change in the energy sector to reduce harmful carbon emissions to the environment. In my opinion, this is a thinly veiled attempt to protect the coal industry from EPA mandates to implement cheaper, renewable energy sources (such as utility-scale solar) and phase out coal-fired powerplants,” Hamlet said.
ELPC executive director Howard Learner said the ruling could allow regulated industries to sue to stop the implementation of rules they do not like by arguing that the regulation has a vast impact across the industry’s economic sector.

Indiana attorney general Todd Rokita, who was one of the 19 Republican attorneys general to ask the Supreme Court to review the ACE Rule decision, said the case was a “fight for the people against the encroachment of our liberties.”

“Hoosiers and all Americans need cheaper energy, and coal is crucial in making that happen. When families have less discretionary income, their liberties are impacted. The EPA’s strict regulations they tried to impose on the nation would have crippled coal-fired plants, resulting in job loss and financial hardship for Indiana,” Rokita said in an email to the Indiana Environmental Reporter. “Due to the Supreme Court’s decision, this power will no longer be in the hands of federal agencies and executive orders. My office will continue to fight similar cases and prevent unauthorized power grabs by federal agencies to protect families and businesses across Indiana.”

The National Mining Association, the trade organization for the U.S. mining industry, including coal mining, said it was “pleased” with the Court’s decision. The Indiana Energy Association, which represents electric and other utilities in the state, said it was “assessing the decision and future impacts to member companies.”

Environmental groups, like ELPC, Earthjustice and Sierra Club expressed their disappointment in the rule, but urged the EPA to use its remaining power to tackle climate change wherever possible.

“Today’s decision by the conservative supermajority of the Supreme Court is a blow to the federal government’s efforts to combat the climate crisis and puts the interests of polluting industries over important environmental and public health protections,” said Earthjustice senior vice president Sambhav Sankar. “The decision will have far-reaching implications and will compromise the ability of federal agencies to use science-based information to combat climate change and protect public health. But this decision still leaves room for the EPA to act on its duty to take on carbon pollution from power plants, and the agency must act quickly and issue a new carbon emission reduction rule as soon as possible.”

Current EPA administrator Michael Regan said the EPA’s primary responsibility is to protect human health and said the EPA would move forward with its mission to the full extent of the law.
“While I am deeply disappointed by the Supreme Court’s decision, we are committed to using the full scope of EPA’s authorities to protect communities and reduce the pollution that is driving climate change. We will move forward to provide certainty and transparency for the energy sector, which will support the industry’s ongoing efforts to grow our clean energy economy,” said Regan. “Ambitious climate action presents a singular opportunity to ensure U.S. global competitiveness, create jobs, lower costs for families, and protect people’s health and wellbeing, especially those who’ve long suffered the burden of inaction. EPA will move forward with lawfully setting and implementing environmental standards that meet our obligation to protect all people and all communities from environmental harm.”

Supreme Court Ruling Limits EPA’s Power to Reduce Power Plant Climate Pollution