Did Congress give the Environmental Protection Agency broad authority to regulate power sector greenhouse gas emissions, or is its scope more limited? A case currently before the Supreme Court of the United States, West Virginia v. EPA, will likely impact President Joseph Biden’s climate agenda – and may have longer-term implications for other government agencies as well, says Shaun A. Goho ’01.
Goho, a lecturer on law and acting director and senior staff attorney of the Emmett Environmental Law and Policy Clinic, says that the suit is a complicated one involving both environmental and administrative law questions, but centers around “what choices the EPA can make in deciding how to regulate power plant greenhouse gas emissions,” which currently account for 25% of total emissions in the U.S. The legal clinic he helps lead submitted an amicus, or friend of the court, brief during the case’s D.C. Circuit stage of litigation.
A complex path to court
In 2015, looking to reduce emissions from the power sector, the EPA under President Barack Obama ’91 introduced a policy called the Clean Power Plan. The new rule took a systematic view of the agency’s role in regulating power system emissions, basing its emissions standards on three “building blocks.” These building blocks included not only reducing the carbon intensity of electricity generation at a power plant, but also actions that occur “beyond the fence line” of any individual power plant, such as shifting power generation from coal-fired plants to natural gas plants or renewables. Based on what was achievable through these measures, the EPA set state-by-state goals for reducing overall emissions. The regulation also empowered the EPA to take action if states failed to do so.
“The Obama administration invoked Section 111(d) of the Clean Air Act” the interpretation of which is in contention in this case, says Goho. “That provision allows the EPA to establish emissions guidelines for existing stationary sources of air pollution that are based on the ‘degree of emission limitation achievable through application of the best system of emission reduction’ that has been ‘adequately demonstrated.’”
A number of industry groups and Republican state attorneys general immediately filed a lawsuit, arguing that the EPA had exceeded its congressional authority — essentially, that its ability to regulate ended “inside the fence line” of each individual facility. In an unprecedented move, the Supreme Court issued a stay — which prevented the policy from going into effect — until the lower court had a chance to weigh in. The D.C. Circuit heard oral arguments in the case, but after the election of President Donald Trump in November 2016, it agreed to suspend its decision as the EPA reconsidered the policy. Ultimately, it dismissed the case.
Under Trump, the EPA changed course. It now said it did not believe it had the authority to issue the broader regulations claimed by the Obama-era Clean Power Plan. Instead, it issued a new policy, the Affordable Clean Energy rule, which set emissions guidelines based only on things that could be achieved through equipment and technology at individual power plants themselves, says Goho.
“The Trump administration concluded that section 111(d) does not give EPA authority to take into account ‘beyond the fence line’ measures. They adopted the ACE rule based only on things that could be done at the power plant: heat rate improvements, making plants run more efficiently. As a result, their emissions guidelines were much, much less ambitious than the Obama Clean Power Plan,” he says.
The rule also drew legal challenges — this time from Democratic states and cities, environmental advocates, renewable energy trade associations, and some power companies. In January 2021, the D.C. Circuit struck down the ACE rule, holding that it was arbitrary and capricious because the Trump EPA had failed to take into account that it did have the ability to take into account beyond-the-fence line measures, says Goho.
This left the EPA, now under Biden, to promise its own rule, which it has not yet issued. Despite this, West Virginia, Alabama, Alaska and other coal-fired energy states, along with coal companies and one North Dakota-based electric cooperative, asked the Supreme Court to review the D.C. Circuit’s decision.
To Goho and many other court watchers’ surprise, the Court agreed to hear the case. “It’s an odd posture, because there isn’t a rule in effect at all right now,” he says. “The Constitution says that federal courts can only decide ‘cases or controversies,’ and not abstract questions of law. Part of having standing to sue is showing that you have been injured or you imminently will be injured by something that the defendant has done, and that the court can do something to redress that injury.”
The arguments: Standing, EPA authority, and the powers of federal agencies
Goho says that this is the EPA’s initial argument: that because there is no rule currently in place, West Virginia and the other petitioners have no standing, and therefore, no case. “The ACE rule was struck down, and we don’t yet know what the Biden administration rule will look like, though it has said it will not go back to the Clean Power Plan. All we have is basically this abstract issue of ‘can EPA take into account beyond-the-fence line measures?’”
He suggests that this argument is the EPA’s best chance to win the case. “In the past, the Court would have been very hesitant to take a case under these circumstances.” But the Court’s composition has changed in recent years, Goho says, and the fact that it granted certiorari may signal its interest in probing the merits of the case. This means, from the West Virginia coalition’s perspective, deciding whether section 111(d) allows EPA to consider only “actions at individual plants, not power sector-wide measures,” he says.
Goho says the petitioners are also interested in invoking the “major questions doctrine.” Typically, after 1984’s Chevron case, courts defer to agencies when they interpret ambiguous language in statutes they are charged with enforcing, but the major questions doctrine provides that deference is inappropriate when the situation involves especially important economic or political issues. West Virginia will argue that Congress did not explicitly delegate such expansive authority to regulate power plant emissions, and that because it involves a critical economic issue, the Court should not simply accept the EPA’s interpretation of its own reach, he says.
“That’s one reason why this case might have very far reaching consequences. The Court has not been clear about how to draw the line between major questions and non-major questions — about when policy questions are just too big to be decided by agencies, and must instead be answered by Congress.”
The stakes and possible outcomes
He says the Court could resolve the merits question in one of two ways. It could issue a narrow ruling that still leaves the EPA some room to maneuver in adopting a new rule for power plant emissions. “If the Court gets to the merits, nobody expects the EPA to win.” Instead, Goho says, the best they can hope for is what Court-watchers call a “soft landing.” Or the Court could block the EPA from looking beyond the fence line, which would severely curtail what Goho says is a critical piece of Biden’s climate agenda. But, he adds, the EPA may still have options.
“If the Court issues a really strong holding that the EPA is limited to purely what can be done on site, it may start looking more at what individual power plants could do to limit emissions,” he says. “In particular, it might look more seriously again at things like carbon capture and sequestration.”
In addition, Goho will be watching for what role the major questions doctrine plays in the Court’s decision. If the Court adopts an expansive view of what counts as a “major question,” it could shift power from government agencies elsewhere – which would be bad news not only for the EPA, but for other agencies too.
“Supporters of the major questions doctrine would characterize this as taking power away from agencies and giving it to Congress, because they would say Congress is democratically accountable, and therefore should be making the major policy decisions,” says Goho. “Critics would say, ‘No, what’s happening is you’re taking power away from agencies, which have some degree of democratic accountability to the president, and you are actually granting the power to the courts, which are not democratically accountable at all.’”