Six ways the Supreme Court’s EPA ruling will impact the U.S. climate future

Two weeks ago, the Supreme Court ruled 6-3 that the Environmental Protection Agency (EPA) does not have the authority to regulate carbon emissions from power plants. West Virginia v EPA is a decision that has made waves in the climate community, even as legal experts continue to debate the nuances of the ruling and the precedent it sets. The case set the EPA against a coalition of coal states led by West Virginia. At issue: the Obama-era Clean Power Plan (repealed by the Trump administration), which used regulatory authority from the 1970 Clean Air Act to mandate power plant carbon cuts as part of the country’s broader net-zero emissions plan.

Writing the Court’s majority opinion, Chief Justice Roberts essentially argued that Congress could not have foreseen the emissions crisis in the 1970s and thus could not have given the EPA authority to regulate carbon emissions as part of its pollution regulation mandate. The Court thus transfigured the long-dead Clean Power Plan into a shackle on its parent agency and other regulatory agencies of the feared administrative state, formally utilizing the new “major questions” doctrine for the first time to set precedent that significant regulatory changes must first gain express authorization from a now-deadlocked Congress before enforcement.

Much has been written since the ruling criticizing the Supreme Court and digging into the legal reasoning used to justify its ruling on West Virginia. But this isn’t a legal blog. Let’s take a look at the 7 biggest ways this ruling impacts America’s climate future–from consumers, to companies, to geopolitics.

#1: America’s ambitious 2030 emissions reduction target just got a lot harder to achieve.

When the U.S. rejoined the Paris Climate Agreement in 2021 following Trump’s abandonment of the accord, the Biden administration set goals of reducing U.S. GHG emissions 50% from 2005 levels by 2030, reaching a zero-carbon electrical grid by 2035, and achieving a net-zero economy by 2050. Federal emissions policy is a key lever for realizing those goals. With Congress deadlocked over climate legislation, the Supreme Court ruling has placed U.S. climate objectives at risk by limiting the future authority of the EPA to drive systemic emissions reductions. One Science article notes that current policies and private market pressure would lead only to “6 to 28 percent reductions in energy-related CO2 emissions,” well short of the 50% cuts needed for Biden’s goals. And power plants are the single largest source of carbon pollution in the U.S., accounting for ~25% of American GHG emissions.

Electric power is responsible for ~25% of American GHG emissions. Source: Environmental Protection Agency.

What’s next? The Supreme Court has thrown the climate issue back to Congress, so the pressure is on lawmakers to wrangle an intransigent Capitol Hill behind some kind of bipartisan climate agreement that gives the federal government back its climate regulatory teeth. As noted by Jesse Jenkins, the head of the Princeton University ZERO Lab, “Anyone harboring faith that EPA could regulate our way to a zero-carbon grid without congressional action should be disabused of that notion. The onus is on Congress to act, and time is running short.” In the meantime…

#2: Foreign skepticism of U.S. climate leadership will make a resurgence.

The election of President Joe Biden signaled for many international leaders America’s return to the forefront of the global fight against climate change, especially after the U.S. unceremoniously dropped out of the Paris Climate Agreement under the Trump administration. But memories are long, and international leaders have been skeptical of U.S. reliability on the climate front since Trump. The SCOTUS ruling has provided fuel for the skeptics’ fire.?

Saleemul Huq, the director of the International Center for Climate Change and Development, excoriated the Supreme Court for a ruling that “flies in the face of established science and will set back the US’s commitment to keep global temperature below 1.5C,” adding that low-income countries vulnerable to climate impacts will “pay the price” for America’s inability to meet its climate targets. UN Secretary General Antonio Guterres joined in calling the ruling a “setback” for global climate policy.

The frustration from global leaders means that Biden–whose ascent was heralded as a “climate presidency”–could lose valuable political capital and support from allies who see the U.S. backsliding on domestic climate goals as it tries to engineer a global energy transition. It’s capital that Biden and his climate czars badly need right now, as they push European allies to continue a costly blockade of Russian oil while negotiating clean energy transitions in Latin America.

#3: The EPA will try to work around the ruling.

How much does West Virginia v EPA actually limit the power of the agency, though? A close reading of the ruling reveals that while West Virginia v EPA restricts the EPA from “devis[ing] emissions caps based on the generation shifting approach” of the Clean Power Plan, which established state-by-state emissions caps, the implication of the ruling for other EPA climate regulation is left open-ended. The actual West Virginia v EPA ruling could end up being narrower than imagined, leaving wiggle room for the EPA to use creative measures to reduce pollution outside the scope of the ruling.

Federal officials have already come out and said the federal government will try to work around the ruling. Interviewed after the SCOTUS announcement, White House National Climate Advisor and Obama administration EPA director Gina McCarthy said the EPA and federal government will “have to find creative ways around” the new limitations on the EPA’s authority. Current EPA Director Michael Regan had literal fighting words for the announcement: “We will take these punches, absorb them, but then come back with a counterpunch … We’re going to move forward with every legal authority to regulate climate pollution and protect communities.”?

What would this look like in practice? The EPA could set regulations that try to replicate the emissions reductions of the CPP without violating the SCOTUS ruling, such as:

• Proposing site-level emissions reductions instead of state-level cuts
• Restricting other pollutants from coal power plants, such as soot, mercury, and nitrous oxides, which would also reduce GHG emissions
• Mandating that coal plants maximize their operational efficiency, which would reduce emissions by 10-15%
• Requiring coal plants to be retrofitted to burn natural gas, which generates around 40% less emissions than coal
• Requiring technologies like carbon capture and sequestration that are much more expensive than the emissions cuts struck down by the Court

The EPA could try to use alternative means of going after power plant emissions. Image courtesy of NPR.

These are all alternative pathways for the EPA to skirt the ruling and drive significant emissions reductions, but there’s no guarantee that the Court won’t eventually go after them too. This leads us to our next impact of the West Virginia ruling:

#4: Expect more climate litigation from the Court.

If the West Virginia ruling itself was limited, its implications for future court action are not. The Clean Air Act was one of a few pieces of early landmark environmental legislation on which federal environmental agencies have based their regulatory authority. Another was the Clean Water Act of 1972, which has become the country’s main federal legislation to regulate water quality and preserve important bodies of water from disappearing. This fall, the Supreme Court will hear a challenge to the enforcement of the Clean Water Act to preserve wetlands from housing development. While I’m no legal expert, a paring down of the water regulation’s enforcement doesn’t seem too outlandish of a possibility.

I see this as the main risk in McCarthy and the EPA’s proposed strategy of “working around the ruling,” although it may be the only option environmental regulators have with their remaining authority. If a 6-3 Court can strike down a climate rule that no longer even exists, I wouldn’t be surprised if the coal state coalition comes back to town for future regulations.

#5: City and state governments will assume the climate policy mantle.

Federal policy is just one avenue for climate action, as I’ve shown in the infographic at the top of this article. With federal regulators unable to present state-level emissions cuts, city and state governments will have more responsibility than ever to step up on climate, just as they did during the Trump administration. This is of course a “double whammy” for city governments that are already on the front lines handling the health and natural impacts of climate change, like water and air pollution and wildfires.

A bipartisan group of mayors from 130 American cities signed net-zero pledges in 2021. Their leadership will matter now more than ever. Image courtesy of Impakter.

A bipartisan group of mayors from 130 U.S. cities have already signed net-zero commitments in advance of COP26 last year as part of the UN Race to Zero. The 657 actions these cities are undertaking right now in alignment with a 1.5C warming scenario include improving mass transit, developing EV charging stations, increasing energy efficiency, and investing in clean water infrastructure. Of course, local governments can only drive climate action within their relatively small borders, while “GHG emissions from sources beyond municipal borders will still impact people, infrastructure, and resources inside them,” as noted in an amicus brief filed by the Columbia University Sabin Center for Climate Change Law. Cities can work decentralized, but bolder action requires investment from the federal level.

#6: The private sector will continue its demands for a low-carbon energy transition, but it may not be fast enough.

One of the most fascinating tidbits about West Virginia v EPA is that not only was the Clean Power Plan already no longer in effect by the time it reached the Supreme Court, but also the regulation wouldn’t have mattered even if it were enforced. Ten years ago, the CPP proposed ambitious power plant emissions reductions that were deemed apocalyptic by GOP leaders fighting to preserve an aging American coal industry. But the legislation never went through, and in retrospect it didn’t need to: market forces like the high costs of operating and renovating coal-fired plants pressured energy operators to transition to lower carbon intensity fuels like natural gas and solar anyway.

As noted earlier and despite arguments from market-minded climate advocates, the free market alone will not solve the carbon crisis, because rising fossil fuel costs and renewable energy demand do not reflect the speed needed to get to net-zero emissions in time to preserve a 1.5C warming scenario. But the market’s march towards low-carbon energy sources and corporate climate responsibility will continue, with or without the EPA.

My Climate Top 5:

• The Biden administration proposed a rule that would require state governments to track and reduce highway emissions over time by monitoring vehicles driving on interstate highways, hoping to get the flailing federal climate agenda back on track.
• Climate researchers are predicting a third-straight La Ni?a event–a weather phenomenon which normally happens every 2-7 years–that would once again bring increased flooding to eastern Australia and droughts to the U.S. and East Africa. Some researchers predict that La Ni?a conditions could become more common in a warming climate.
• Shell continues its push to launch new offshore drilling in the Gulf of Mexico as it finalizes its 13th major offshore project in the region amidst mixed signals from the Biden administration on the future of drilling in the Gulf.
• A new BCG study shows that plant-based protein is one of the highest-yield climate investments, with each dollar invested in meat and dairy alternatives resulting in three times more GHG reduction compared to green cement investment and 11 times more than zero-emission cars
• None of the financial institutions that are members of the Partnership for Carbon Accounting Financials (PCAF) are completely in line with their emissions reporting requirements, as found in a review done by nonprofit 2 Degrees Investing.

Climate Content of the Week:

Image courtesy of Matt Wuerker of Politico.