Curbing climate action? SCOTUS decision in 'West Virginia v EPA'

On June 30, 2022, the United States Supreme Court handed down a judgment crucial to the validity of the Clean Power Plan devised by the Environment Protection Agency (‘EPA’). The EPA is an executive agency of the federal administration that was tasked in 1970 with environmental protection and pollution control. The judgement concluded that the EPA overreached its statutory mandate through the introduction of the Clean Power Plan.  While this controversial judgment raises many questions about climate politics in the United States, I will seek to explain what this judgment means for the ability of US executive agencies to achieve the climate agenda of the Biden administration. This ability in turn has ramifications beyond domestic policy and extends to US climate diplomacy and collective climate action on the global stage.

The Clean Power Plan, envisioned by the Obama Administration, sought transitions in the power sector with the objective of reducing fossil fuel reliance from 38% to 27% by 2030. The Plan proposed to achieve this transition by implementing generation shifting, which refers to ‘ways of shifting electricity generation from higher-emitting sources to lower-emitting ones — more specifically, from coal-fired to natural-gas-fired sources, and from both to renewable sources like solar and wind’. Generation shifting would imply that existing coal power plants were expected to reduce production and shift their production capacities to cleaner sources such as natural gas as it produces less than half the amount of carbon dioxide per unit. Moreover, it encouraged plants to participate in carbon trading schemes with other plants to ultimately disincentivize carbon emissions in the power sector. Through a gradual transformation in the energy generation process, the EPA aimed to factor in the exigency of climate transition. 

The resistance to Clean Power Plan

Naturally, this transition policy irked the fossil fuel industry, and several states challenged the enforcement of the plan. It was judicially challenged on the ground that a drastic policy measure such as generation shifting could not be the ‘best system of emission reduction’ within the meaning of Section 111 of Clean Air Act.  As the legal battle between the opposing states and industries and the EPA continued, there was a change of guard in the White House, and axiomatically, at the EPA.  The Trump administration replaced the Clean Power Plan with the Affordable Clean Energy Rule. This rule was held invalid by the D.C. Circuit Court, a day prior to the inauguration of the Biden administration. As the appeal from the D.C. Circuit Court moved to the Supreme Court, the Biden administration decided not to renew the Clean Power Plan, and declared its intent to frame another plan. Nevertheless, the Supreme Court decided to adjudicate its validity as the question was not ‘moot’ per existing precedent, and the Federal government had not decided to abstain from enforcing generation shifting in case it won the case. The dissenting judgment termed this an ‘advisory opinion on the proper scope of the new rule EPA is considering.’ 

Majority’s insistence on specific Congressional intent

The Supreme Court had framed the question for adjudication as ‘whether the “best system of emission reduction” identified by EPA in the Clean Power Plan was within the authority granted to the Agency in Section 111(d) of the Clean Air Act’. The majority of six out of nine justices answered ‘no’. The majority held that even though it might be sensible to cap carbon emissions and seek generation shifting, such a measure would require a clear Congressional authorization to adopt its own regulatory scheme. It questioned whether section 111 of the Clean Air Act empowers the EPA ‘to order the wholesale restructuring of any industrial sector’ based only on its discretionary assessment of “such factors as ‘cost’ and ‘feasibility’.  It further observed, ‘A decision of such magnitude and consequence rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body’. It relied on the doctrinal treatment of regulatory initiative in other cases where the Supreme Court had held that ‘Congress could not have intended to delegate’ significant regulatory powers in ‘so cryptic a fashion.’ It also relied on decisions where an agency exercised authority in an unprecedented manner, such as instituting ‘a nationwide eviction moratorium in response to the COVID–19 pandemic’, under the remit of a broad statutory mandate. Thus, the majority decided that the EPA infringed beyond its remit while exercising the powers granted to it under the Clean Air Act.

Dissent’s emphasis on agency discretion

The dissenting judgment, authored by Justice Kagan, took issue with the majority’s impatience to ‘constrain EPA’s efforts to address climate change’ when the new EPA rule would be susceptible to ‘immediate, pre-enforcement judicial review.’  In other words, while the majority was concerned with the EPA overstepping beyond the Congressional mandate, dissenting judges took issue with the Supreme Court’s overreach in pre-maturely hearing a moot legal dispute. The dissenting judgment, converse to that of the majority, interpreted the intent behind section 111 and the scheme of the Clean Air Act as Congress having ‘charged EPA with addressing those potentially catastrophic harms, including through regulation of fossil-fuel-fired power plants’; it clarified that ‘Section 111 of the Clean Air Act directs 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.”’

Interestingly, the dissenting judges accepted climate change as the EPA’s justification for reducing fossil fuel output. It considered the generation-shifting regime a statutorily appropriate policy that had been deemed as the ‘best system of emissions reduction’ after considering its costs and practical implications. Noting that the parties did not ‘dispute that generation shifting is indeed the “best system”’, the dissent reasoned:  

‘A key reason Congress makes broad delegations like Section 111 is so an agency can respond, appropriately and commensurately, to new and big problems. Congress knows what it doesn’t and can’t know when it drafts a statute; and Congress therefore gives an expert agency the power to address issues—even significant ones—as and when they arise. That is what Congress did in enacting Section 111. The majority today overrides that legislative choice. In so doing, it deprives EPA of the power needed—and the power granted—to curb the emission of greenhouse gases.’

It also disagreed with the majority’s treatment of precedents where executive agency actions had been invalidated for being too significant to be undertaken without specific Congressional sanction. It differentiated these precedents from EPA’s Clean Power Plan as it was part of the EPA’s ordinary mandate of pollution control and emissions reduction. As the EPA was not ‘operating far outside its traditional lane’ and its decisions had not ‘wreaked havoc on Congress's broader design’, the dissent found the reliance on these precedents to be unsatisfactory. The dissent raised alarm about the unwillingness of the majority to abide by ‘sensible principles’ of judicial restraint when an agency’s action is being undertaken in the sphere of jurisdiction that Congress demarcated for it.

Unsettled questions

The majority’s opinion presents two obstacles to climate policy initiatives undertaken by Executive agencies across the United States. First, the agency’s action cannot be an extraordinary case of exercise of the statutory mandate. Ordinary cases are those where the agency would naturally exercise its powers, within the literal meaning of powers granted under the statute.

Second, if the agency’s decision is indeed deemed extraordinary, it shall bear the burden to justify the policy decisions by pointing to ‘clear congressional authorization’. The erection of these obstacles has led experts to conclude that the Biden administration has ‘few executive tools’ to achieve its climate goals of emissions reduction.

This episode of judicial review of climate action raises various questions about the courts' role in evaluating the contours of climate policy decisions undertaken by expert bodies. These questions about the judicial role go beyond the mainstream challenges around the contours of judicial review, and the degree of judicial activism, as they arise in a context of a climate emergency. Besides pointing to a climate conservative judicial role, this judgment is a grim reminder of the fact that the efficacy of climate action is determined by far more than the climate ambition of the Executive, but remains contingent on the interplay of different organs of the State.

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(Environmentality is a collection of ideas, perspectives, and commentary by researchers at the Initiative on Climate, Energy and Environment, Centre for Policy Research, New Delhi. Views and opinions expressed in this blog are solely those of the authors. They do not represent institutional views.)

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