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What’s next after Supreme Court’s climate ruling?

Posted on 12 July 2022 by dana1981

This is a re-post from Yale Climate Connections

The Supreme Court’s June 30 ruling in the West Virginia v. EPAas detailed by Lexi Smith on this site, substantially curtailed the Environmental Protection Agency’s ability to regulate climate pollutants.

Though the language of the decision itself appears to be narrow – limiting the extent of regulatory options for existing power plants under Section 111(d) of the Clean Air Act – it also elevated the newly-conceived “major questions doctrine.” That principle holds that any “major” new federal agency rules must clearly be within the scope of Executive branch regulatory authority and specifically delegated by Congress in  laws written by Congress, like, in this case, the Clean Air Act.

The major questions doctrine could limit future climate regulations much more broadly than the seemingly limited scope of the West Virginia v. EPA ruling. Members of Congress generally lack the expertise, foresight, and time to describe in detail precisely what pollutants agencies like EPA will need to address in the future; or, for that matter, every parameter they may need to consider in developing the most efficient such regulations.

Given its polarized nature, Congress has proven itself incapable of updating decades-old environmental laws like the Clean Air Act that constrain climate rules, which were intentionally written broadly to give EPA wide leeway in establishing “the best system of emission reduction.” The major questions doctrine would require that any future revisions to legal language be much more specific, making Congress’ task even more difficult yet.

But despite the ruling, pathways to curb climate pollution still remain, both within and beyond federal agencies. Some of those options have relatively high prospects for success, with others more vulnerable to legal challenges in the wake of West Virginia v. EPA.

Options for the Executive branch

The Biden administration has outlined its planned climate change regulatory actions and initiatives via EPA rulemaking. These include regulations on highly potent greenhouse gases like methane and hydrofluorocarbons (HFCs), which are used as coolants for refrigeration and air conditioning. In a bipartisan law passed in 2020, Congress directed EPA to address HFCs, which the agency did in a rule that is to reduce their U.S. production and consumption by 85% over the next 15 years. EPA is in the process also of increasing the stringency of its methane rule, and Democrats in Congress are negotiating a potential fee on methane pollution, from which companies would be exempt if they comply with the new EPA regulations.

In addition, Section 202 of the Clean Air Act authorizes EPA to issue standards for pollutants from motor vehicles. In December 2021, EPA finalized its greenhouse gas emissions standards for cars and light trucks through the year 2026, and rules for heavy-duty vehicles are in the works. But some experts worry that if these regulations are perceived as mandating electric vehicles or phasing out internal combustion engines, they could run afoul of a major questions doctrine legal challenge. Many legal experts nevertheless say they consider EPA’s motor vehicle pollution rules to be more clearly in line with its Clean Air Act statutory authority. If that view is right, the motor vehicle rules face less risk of being overturned than the power plant regulations.

EPA is also working on new regulations for climate pollution from power plants, but its options have become more limited in the wake of the West Virginia v. EPA ruling. In that case, the Supreme Court ruled that EPA cannot implement the broad system envisioned in the Obama administration’s Clean Power Plan, which would have allowed states to reduce greenhouse gases by replacing coal power plants with solar and wind farms, for example. That approach has proven itself to be extremely cost-effective. Even without the Obama-era Clean Power Plan in place, the power sector in 2019 achieved its targeted 2030 emissions reductions simply because cleaner alternatives became so inexpensive that utilities used them to replace coal power anyway. In fact, electricity is the only sector in which U.S. greenhouse gas emissions have been declining.

U.S. GHG emissions by major emitting sectorU.S. greenhouse gas emissions by sector, from 2005 through a preliminary estimate for 2021. (Source: Rhodium Group)

The U.S. nevertheless must continue to accelerate its deployment of clean energy sources if there is to be any prospect of the country’s meeting its 2030 Paris commitment. EPA is in the process of creating new power plant rules, which the agency says it plans to release in draft form in March 2023 and finalize in 2024, a presidential election year. Many legal experts say they believe that even in the wake of the Supreme Court decision, EPA could require coal power plants to also burn some natural gas and/or biomass (often referred to as co-firing), which would reduce carbon emissions, or implement carbon capture technology – options that would likely be significantly more expensive than switching from coal generation to cheaper and cleaner alternative power sources. But such a new rule could face lengthy legal challenges lasting years: Predicting how the courts will rule when considering the ill-defined and highly subjective major questions doctrine is an impossible task even for legal experts.

EPA also can move forward with regulating other pollutants that are released from the burning of fossil fuels, the agency moving forward through Clean Air Act National Ambient Air Quality Standards. For example, the Trump EPA in 2020 declined to strengthen its particulate matter pollution standards, contrary to expert advice. The Biden EPA announced in June 2021 that it would revisit that decision, and more stringent draft standards are expected this summer, with the administration trying to promulgate (i.e. adopt) them in 2023. Some legal experts believe that these particulate matter rules could be more effective at phasing out dirty coal than power plant greenhouse gas emissions regulations, though lengthy legal challenges would be highly likely.

What about trying entirely new approaches?

Some climate action advocates have proposed that EPA probe climate pollutant regulatory authority through entirely different legal avenues, such as the Toxic Substances Control Act (TSCA) or Section 115 of the Clean Air Act.

Section 115 authorizes EPA to require states to address emissions that contribute to air pollution endangering public health or welfare in other countries if the other countries provide reciprocal protections. Proponents argue that the signing of the international Paris Climate Agreement should allow EPA to regulate climate pollutants under Section 115.

A group including former NASA climate scientist James Hansen has also petitioned EPA to regulate climate pollutants under TSCA – a law that authorizes EPA to establish regulations that restrict manufacturing, distribution, use, and disposal of substances that pose “an unreasonable risk of injury to health or the environment.”

In theory, either of these approaches would offer EPA broad authority to regulate climate pollutants from all domestic sources, for example by requiring that states submit plans to reduce their statewide climate pollution at an EPA-specified rate. In practice, both proposed avenues would appear highly vulnerable to major questions challenges in the wake of the West Virginia v. EPA decision. As University of California at Berkeley law professor Daniel Farber said in a recent webinar, “my view is that the [Supreme] Court isn’t going to like any of those ideas any better, and maybe worse.”

TSCA in particular was written to allow for regulation of manufactured toxic substances, whereas greenhouse gases are byproducts of burning fossil fuels. The law thus would very likely be vulnerable to a major questions challenge, given that it is far from clear that TSCA was intended to regulate byproduct climate pollutants. Furthermore, EPA also rejected a similar TSCA petition in 2015 that asked the agency to use the law to regulate carbon pollution because it also causes ocean acidification. The agency’s reasoning then was based largely on its already addressing climate pollutants through the Clean Air Act, which still remains the case .

While Section 115 of the Clean Air Act could be interpreted as giving the EPA broad authority to regulate climate pollution, doing so would require a multi-years-long rule-making process, which would inevitably be followed by several years of legal challenges. The likely outcome of such an effort? A significant probability of a final ruling similar to that in West Virginia v. EPA. As Farber’s Berkeley Law colleague Sharon Jacobs said in that same webinar, “This is not a time to test big transformative rules because of what this court will do with them … the [Supreme] Court is asking Congress to do its job, and so we need for that to happen.”

The pathway to Paris runs through Congress

On this point there appears to be a consensus among the Supreme Court justices and legal experts: Congressional legislation is the venue through which climate solutions would be the least vulnerable to lengthy and subjective legal challenges. As a co-equal branch of the U.S. government, Congress has much broader authority to implement those solutions than EPA.

The Democratic majority is in the process of negotiating a budget reconciliation package that could include approximately $300 billion in clean energy and climate investments. One congressional aide recently told E&E News, “I am as optimistic as I’ve been in quite a while that we’re going to get this done.”

Given the likelihood that at least one chamber of Congress – either the Senate or the House – will flip to Republican control in January after the November election, for new climate laws to pass beginning in 2023 will require bipartisan support. Individual states then will retain the ability to implement their own climate policies: For example, California recently passed a budget including nearly $54 billion in climate investments.

As the Rhodium Group wrote, meeting America’s 2030 Paris Climate Agreement target will require success on each of these fronts:

“The West Virginia v. EPA ruling by itself doesn’t put the US’s 2030 climate target in jeopardy … Congress, the Biden administration, and states all need to accelerate progress this year toward closing the emissions gap. If any front fails to act, it will be increasingly difficult to see a reasonable path to the 2030 climate target.”

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