U.S. Supreme Court Limits EPA’s Authority to Curb Greenhouse Gas Emissions

July 6, 2022

In a 6-3 opinion, the high court struck a major blow to the United States Environmental Protection Agency (the EPA), ruling the EPA cannot provide states with the right to issue regulations reducing the amount of carbon dioxide emissions from existing power plants.

Supreme Court Finds That the EPA Exceeded Its Authority

In reversing a D.C. Circuit Court ruling that struck down the Trump Administration’s Affordable Clean Energy rule – the rule which repealed the Obama Administration’s Clean Power Plan and replaced it with far more limited regulations – the Court found that the EPA exceeded its authority by giving states the choice to adopt regulations that would motivate a shift from coal to gas or renewable energy.

The Court relied heavily upon the major questions doctrine, while struggling with the far-reaching impact that allowing the EPA to regulate the entire energy sector could have on the economy. This doctrine requires agencies who undertake large-scale regulatory initiatives that have broad impact to point to “clear congressional authority to regulatory” in the manner proposed by the agency. In reaching its conclusion, the Court found Section 111(d) of the Clean Air Act which granted the EPA authority to establish “emissions caps at a level reflecting ‘the application of the best system of emission reduction…adequately demonstrated,’” vague and held it did not come anywhere close to the type of clear authorization required under the major questions doctrine.

In writing for the majority, C.J. Roberts wrote:

“[p]rior to 2015, EPA had always set emissions limits under Section 111 based on the application of measures that would reduce pollution by causing the regulated source to operate more cleanly.”

Alternative Regulatory Avenues Remain

In 2015, the EPA shifted its focus from improving the performance of individual sources to a policy aimed at:

“improv[ing] the overall power system by lowering the carbon intensity of power generation…. “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…. A decision of such magnitude and consequence rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body.”

Despite this significant setback to the EPA, there remain avenues to regulate greenhouse gas emissions. The EPA can still regulate power plants under the Clean Air Act using traditional tools, such as tighter controls for stationary sources and exploring new methods of controlling greenhouse gas emissions. The EPA also retains the right to regulation of greenhouse gas emissions from other sectors of the economy, such as vehicle emissions.

If you would like to discuss further, please contact Derek Hartman ( DPH@kjk.com; 216.736.7248) or another attorney within of KJK’s  KJK’s Real Estate & Environmental Law practice group.