West Virginia v. EPA: What the Supreme Court Ruling Means for Environmental Justice
On June 30, the last day of its 2022 term, the United States Supreme Court released its much-anticipated decision in West Virginia v. EPA, the high-profile federal climate change case. West Virginia was the finale of an extraordinary term marked by momentous decisions overturning longstanding precedents and state laws on tribal sovereignty, abortion, and the separation of church and state, that are already reshaping American life. This decision was largely overshadowed by some of the Court’s other groundbreaking decisions and is fairly technical in nature, so this blog post attempts to clarify what was decided and what it means, especially for environmental justice communities.
The rumors of EPA’s inability to regulate greenhouse gas emissions from the power sector are greatly exaggerated, and the federal government retains considerable authority to address climate change. As a practical matter, the most significant and immediate potential for climate progress remains in the states and local governments, as well as through Presidential executive actions. However, there are serious environmental justice risks on the horizon as West Virginia appears to clear the way for EPA to set standards based on false solutions like carbon capture and extend the energy system’s reliance on natural gas. To fulfill its commitments to environmental justice, the Biden Administration must work together with the communities on the frontlines of climate change.
In West Virginia, the Court was asked to consider a lower court decision concerning the 2019 repeal of the “Clean Power Plan,” a 2015 rule issued by the Environmental Protection Agency (“EPA”) to address greenhouse gas emissions from the power sector. The Clean Power Plan never went into effect, but was intended to regulate existing power plants’ greenhouse gas emissions, primarily by encouraging states to adopt a cap and trade system or shift generation to less carbon-intensive sources (like coal to natural gas or renewable energy) as the “best system of emission reduction” under section 111(d) of the Clean Air Act.
The Court voted 6-3 that the Clean Power Plan exceeded the authority that Congress delegated to the EPA in section 111(d). In the majority opinion, authored by Chief Justice Roberts and joined by Justices Thomas, Alito, Gorsuch, Kavanaugh, and Barrett, the Court held that Congress could not reasonably be understood to have granted to EPA the power to make such major policy decisions as were decided in the Clean Power Plan.
In a stark departure from the usual and well-established judicial approach of deferring to reasonable agency interpretations of the laws they administer, the Court for the first time recognized the Major Questions Doctrine to strike down an agency action. As explained by Chief Justice Roberts, this new approach means that in “extraordinary cases,” the Court will first analyze whether Congress clearly authorized the power claimed by the agency. However, the Court did not explain what qualifies as an extraordinary case or clear congressional authorization. In the words of the Chief Justice, extraordinary cases seem to be those where the “history and the breadth of the authority that the agency has asserted and the economic and political significance of that assertion provide a reason to hesitate before concluding that Congress meant to confer such authority.” Op. at 17. The Court now requires “clear congressional authorization” to overcome such hesitation and uphold an “extraordinary” agency action.
Specifically, the Court described EPA’s assertion of authority to “substantially restructure the American energy market” as a “transformative expansion in [its] regulatory authority,” an “unheralded power” the agency found in a “long-extant statute.” Id. at 20. In other words, the Court saw the Clean Power Plan as the EPA’s attempt to redefine its authority and claim an unprecedented new power based on an old law. The opinion points to EPA’s departure from its previous approach under section 111(d) of establishing emissions limits “based on the application of measures that would reduce pollution by causing the regulated source to operate more cleanly,” as opposed to the system-wide approach proposed in the Clean Power Plan. Id. The opinion also casts doubt on the idea that Congress would delegate to EPA vast policy decisions about “how much coal-based generation there should be over the coming decades,” since the agency lacks expertise in the area and Congress would tend to keep such “basic and consequential tradeoffs” for itself. Id. at 25-6. Chief Justice Roberts further highlighted the fact that EPA relied on “the vague language of an ancillary provision” of the Clean Air Act, “one that was designed to function as a gap filler and had rarely been used in the preceding decades.” Id. at 20. In addition, the opinion discusses Congress’ history of considering and failing to pass a cap and trade system.
Notably, the Court’s opinion did not clarify what constitutes “clear congressional authorization” and does not do much better when it comes to defining what is a “major question.” The Major Questions Doctrine appears to be triggered when an agency asserts “highly consequential power” with “economic and political significance.” But it remains unclear where exactly the Court would draw the line between the kind of issue that should be resolved through normal statutory interpretation and the kind that would instead resort to the Major Questions Doctrine. The effect of this ambiguity is to subject some agency actions to potential challenges, in line with the conservative agenda to weaken the authority of agencies.
While this decision is clearly a setback for the federal government’s efforts to avert the most urgent consequences of the climate crisis and subjects more agency actions to potential legal challenges, it also falls short of some of the worst case scenarios that court observers had in mind when the Supreme Court decided to hear this case. The Court affirmed that EPA has the authority to regulate greenhouse gasses through section 111(d) of the Clean Air Act and does not affect states’ abilities to address greenhouse gasses.
Replacing the Clean Power Plan
The opinion in West Virginia suggests some contours of what kind of new section 111(d) rule for greenhouse gasses from power plants the Court might uphold. The Court seems to favor a performance standard that is based on technology controls and objective, scientific criterion, but showed some skepticism about a standard that could make certain types of fuel sources cost-prohibitive.
While the Court did not prohibit EPA from imposing “beyond the fenceline” measures, the majority cast significant doubt on using such an approach under section 111(d), suggesting that the Court would be more likely to uphold controls applied directly at the source. The opinion focused on EPA’s traditional practice under section 111 of requiring regulated facilities to use pollution control equipment or standards on site that would cause “plants to operate more cleanly.” In the case of greenhouse gas emissions, this would likely mean measures like carbon capture or co-firing (for example, requiring coal plants to also combust natural gas, which is less carbon-intensive than coal), but could also include on-site energy storage or renewable generation.
Following the opinion’s discussion of the Mercury Rule, as well as the Acid Rain and National Ambient Air Quality Standard (“NAAQS”) programs (which are both established under other parts of the Clean Air Act), it seems possible that the Court might uphold a “beyond the fenceline” sector-wide system of regulation if the cap, or performance standard, is based on “the application of particular controls,” id. at 21, or “some scientific, objective criterion, such as the NAAQS.” Id. at 29.
Currently, there is no NAAQS for greenhouse gasses, although environmental groups have petitioned EPA to develop such a standard, which must be designed to protect public health with an adequate margin of safety. While establishing a NAAQS for greenhouse gasses could bring significant benefits, it would also be a challenging and legally and politically fraught process that would likely span multiple years.
A performance standard based on emissions reductions achievable by applying false solutions like carbon capture and storage (“CCS”) or co-firing appears to fit neatly within “the application of particular controls” approach approved by the Court. Both the majority and dissent signaled receptiveness to CCS, leading many to conclude that West Virginia marks a significant opportunity for the costly and unproven technology to take hold in the U.S. In recent years, there has been significant investment in CCS from corporations as well as the federal government, which authorized $2.5 billion on CCS programs in the bipartisan infrastructure law.
In developing the Clean Power Plan, EPA considered both CCS and co-firing and determined that they were “technically feasible and within price ranges that the EPA has found to be cost effective in the context of other GHG rules,” but rejected them as less cost-effective than the approach the agency ultimately adopted. Despite the inherent environmental justice risks of these technologies, it seems likely that when EPA analyzes these measures again, both the feasibility and price determinations will be rosier compared to conditions in 2015.
The majority in West Virginia also signaled disapproval of performance standards that would require fuel-switching, and possibly even performance standards so stringent that certain sources, like coal plants, would be cost-prohibitive to continue to operate. In one footnote, Chief Justice Roberts disputed the dissent’s argument that such an approach was in line with the agency’s previous regulations. “Of course, EPA has never ordered anything remotely like [requiring coal plants to become natural gas plants], and we doubt it could. Section 111(d) empowers EPA to guide States in establishing standards of performance for existing sources… not to direct existing sources to effectively cease to exist.” Op. at 24, n3.
Similarly, another footnote by Chief Justice Roberts disparaged the dissent’s characterization ー in discussing a hypothetical carbon capture requirement ー that EPA regulations would always affect the mix of energy sources in the power sector. “There is an obvious difference between (1) issuing a rule that may end up causing an incidental loss of coal’s market share, and (2) simply announcing what the market share of coal, natural gas, wind, and solar must be.” Id. at 27, n4. Thus, it appears that the Court may treat with more skepticism a performance standard that would require or result in coal plants “ceas[ing] to exist.”
Whatever approach EPA decides upon to replace the Clean Power Plan, the federal rulemaking process is slow. The Biden Administration currently projects that the notice of proposed rulemaking for the new rule will be released in March 2023, and the full rulemaking process will likely take (at least) another year from then. Any new rule to replace the Clean Power Plan will likely be further delayed by challenges in the courts and may very well be heard again by the Supreme Court. Ultimately, any Clean Power Plan replacement rule would likely not be in effect until after the 2024 presidential election.
What does this mean for environmental justice communities?
Most commentary about the impacts of West Virginia have focused on the decision’s consequences in terms of the federal government’s ability to address climate change or the future of the federal administrative state in general. While these concerns are significant, it is important to recognize how this decision will specifically and differentially affect communities on the frontlines of climate change, especially those who are already burdened by pollution and other stressors, including systemic racism.
The communities who are closest to and most affected by pollution have often opposed cap and trade and other market-based mechanisms to reduce emissions, since such systems tend to result in pollution “hot spots” that disproportionately impact low-income and BIPOC communities. For example, in California, many communities living with the pollution burdens of the fossil energy system already know that cap and trade systems do not result in local reductions of dirty and dangerous air pollutants.
Environmental justice communities also have good reason to be skeptical that EPA can regulate polluters using more conventional, “end-of-pipe” methods that adequately protect community health and wellbeing. Regulating co-pollutants from fossil-fired plants may seem like a fairly straightforward approach to also address climate pollutants, but pollution controls for traditional “criteria” pollutants do not effectively address greenhouse gasses. Moreover, EPA’s record ー both recent and historic ー on clean air and water does not inspire confidence for many, especially those in disproportionately polluted places. In particular, the Clean Air Act can impose limits on how much pollution is emitted, but it does not eliminate pollution, so in the many parts of the country that haven’t attained health protective standards, any additional pollution increases the risk of further adverse health impacts.
If EPA adopts a performance standard based on the amount of emissions reductions achievable through CCS, there is good reason to question how effectively EPA can ensure that the carbon capture is effective and storage is both effective and safe. And as long as the cost of CCS remains high and the cost of natural gas stays low, such a standard could result in voluntary or induced fuel-switching from coal to natural gas, or co-firing with natural gas. However, there is significant political will and corporate investments seeking to make CCS cheaper, so the cost landscape may well change dramatically in the near future. Moreover, while shifting from coal to natural gas would result in less carbon pollution, natural gas still emits other air pollutants that create local ground-level ozone, which causes health harms ranging from asthma attacks to increased risk of premature death. Of course, any policy solution that perpetuates sacrifice zones is inherently unjust, while also entrenching obsolete fossil fuels and delaying our past-due transition to renewable energy. Most importantly, the people who are most impacted by these decisions ー including fossil energy workers ー must be empowered and centered in the decision-making process; agencies like the EPA, along with other stakeholders, must respect environmental justice communities’ right to self-determination.
Other implications for the federal government
Because the Court failed to provide any workable standard for what constitutes a “major question,” or guidance for how Congress could clearly authorize a broad delegation of authority, the West Virginia decision creates significant legal uncertainty for federal regulators across a range of issues. Other administrative actions that appear likely to be challenged include the Securities and Exchange Commission’s proposed climate disclosure rule and the Federal Energy Regulatory Commission’s draft policy statement on considering the climate impacts of natural gas pipelines. These and other challenges will be tested in lower courts, and many agency actions will likely be put on hold while these lawsuits play out, although relatively few of these will ultimately be heard and decided upon by the Supreme Court. In the near term, risk-averse agencies may choose to refrain from taking ambitious or innovative agency actions.
Importantly, the energy markets have changed significantly since the Clean Power Plan was first proposed. The U.S. energy system has already exceeded the emissions reductions that the Clean Power Plan sought to achieve, due to state and local actions, corporations, and market effects (particularly the rise of cheap natural gas). Section 111(d) of the Clean Air Act may still emerge as a useful tool for addressing GHGs from the power sector, but it is not necessarily the critical one. Especially following the apparent collapse of clean energy spending through reconciliation, in the short term, the most likely arena for potential federal climate action continues to be through the “power of the purse.” Considering the continued gridlock on climate action in Congress and the urgent timescale to avoid catastrophic warming, the most immediate potential for federal climate action lies in executive actions like President Biden’s Defense Production Act orders, which facilitate the domestic manufacturing and deployment of clean renewable energy resources.
Implications for states and local governments
West Virginia has no direct, immediate impact on independent state authorities to regulate GHGs in the power sector (e.g., via state legislation addressing climate or air pollution, as implemented through state agencies or utility commissions). Ultimately, when EPA finalizes new rules to replace the Clean Power Plan, laws in some states could be preempted (although a friendly administration would likely attempt to preserve pre-existing state programs). States would base their own performance standards under the Clean Air Act on the new emissions limit set by EPA. Right now, states and local governments can make significant progress on climate and environmental justice and help reshape the power sector by deploying clean renewable energy like solar, wind, and storage through direct procurement, as well as investing in community energy resilience; facilitating such deployment through incentives like renewable portfolio standards and community solar programs; and planning to retire fossil-fired power plants and blocking harmful technologies like CCS, nuclear, and incineration ー all while taking input from and prioritizing the communities who are most impacted by pollution.