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Supreme Court limits EPA's role in combatting climate change in a fresh jab at the 50-year-old Clean Air Act

By Rachel Koning Beals

President Biden's climate-change plan hit a major hurdle as SCOTUS ruled to restrict federal reach in controlling emissions at power plants; energy industry welcomes greater flexibility

President Joe Biden's plan to address climate change hit a major hurdle as the Supreme Court on Thursday ruled to restrict federal reach in controlling emissions at power plants and beyond.

The court, whose conservative majority has already shown reluctance in broadening federal agency scope, considered the Environmental Protection Agency's (EPA) authority to regulate greenhouse gas emissions from existing coal- and gas-fired power plants under the landmark Clean Air Act. But the impact of the decision, the Biden administration and environmental groups say, is much wider.

In a 6-3 ruling, the court sides with mostly conservative, energy-producing states and fossil-fuel companies in adopting a narrow reading of the Clean Air Act. The decision prevents the EPA from enforcing climate-friendly, industry-wide changes, limiting it to actions targeting individual plants.

Read the opinion, written by Chief Justice John Roberts.

"Climate is literally the tip of the iceberg. The [ruling] attacks the very foundation of modern regulation," said Steven Cohen, in an opinion piece for the Columbia University Climate School.

"In the face of today's complex, technological world, conservative state attorneys general and right-wing jurists are demanding a degree of legislative specificity that is impossible for non-experts to articulate," he said. "Our elected leaders and judges are not chemists or toxicologists. They tend to be lawyers. When they write environmental laws, they leave important details to the experts in regulatory agencies."

Global warnings

The SCOTUS ruling comes just months after the United Nations issued another in a series of alarming reports on climate change, the latest suggesting that the most vulnerable nations are already behind in adapting to environmental pressure and intensifying natural disasters. It is mounting distress, the U.N. says, that comes at the hands of burning fossil-fuels for power, transportation and more in the most-developed parts of the globe, including the U.S.

Some observers consider the setback a tactical and psychological blow for Biden's administration. He has set a goal of decarbonizing the U.S. power sector by 2035. And he wants the U.S. economy as a whole to flip to net-zero emissions by 2050, first halving emissions by the end of this decade.

U.S. emissions targets are largely in line with what's been set by the rest of the major global economies, save for China, the world's largest polluter, which says it can hit net-zero emissions by 2060.

The ruling is also significant because several climate cases, some featuring novel legal arguments, are slated to make their way through the federal court system.

Read: Biden sued by climate groups using novel legal argument to stop oil and gas drilling

SCOTUS reviewed the U.S. Court of Appeals for the District of Columbia Circuit's 2021 decision striking down Republican former President Donald Trump's Affordable Clean Energy rule.

That Trump rule loosened regulations linked to climate change when compared to the Obama-era Clean Power Plan. Obama's effort sought to reduce release of greenhouse gases through improved efficiency measures and the adoption of more natural gas and renewable energy instead of coal.

The Supreme Court stayed that plan, preventing it from taking effect, in 2016. Trump's replacement still sought efficiency improvements but excluded the switch to cleaner fuels.

Two coal companies, as well as a group of states led by West Virginia and North Dakota, challenged the lower-court ruling.

'Broad authority'

For the most part, Democratic-led states and select power companies -- including Consolidated Edison Inc. (ED) Exelon Corp. (EXC) and PG&E Corp. (PCG) -- sided with the Biden administration, as did the Edison Electric Institute, an investor-owned utility trade group. Major oil and gas firms (CVX)(XOM) spoke up in favor of the EPA limitations.

At least one electric co-op, however, said an EPA with a lighter touch will be key to the energy transition.

"As our nation depends on electricity to power more of the economy, policymakers must recognize the need for time, technology development and the importance of always-available energy sources to maintain reliability and affordability," the National Rural Electric Cooperative Association said in a statement.

"That's particularly true in light of recent warnings that dozens of states may struggle with rolling blackouts this summer due to policies that promote the disorderly retirement of existing generation resources," the group said,

Earlier this year, 192 Democratic lawmakers signed onto an amicus briefing supporting the EPA. They argued that a particular section of the Clean Air Act (CAA) was "intended to confer broad authority on the EPA to regulate and respond to both new and existing air pollutants, as needed to carry out the stated purpose of the CAA," according to their filing.

At a National Press Club event previewing the SCOTUS EPA case earlier this year, West Virginia Attorney General Patrick Morrisey challenged Edison Electric Institute's position that the case could undermine the EPA beyond the scope of the coal power case.

"This once again is about who gets to make the decision. It's Congress. There's no secret agenda, if you will... [W]e know that everyone has different economic incentives as to why they make their decisions," said Morrisey.

"We're talking about the wrestling match between the legislative branch of our federal government and the executive branch of our federal government, and how we have that balance of power between the two. People shouldn't read into it, [that we're] talking about the merits of climate change," he said.

'Other pollutants'

The Supreme Court's decision does not mean the end of President Biden's climate agenda, rather a review of strategy, said Kevin Minoli, former senior official in the EPA's Office of General Counsel, and now a partner with Alston & Bird

"The Biden administration focused on rules that limit power plant emissions of other pollutants. EPA's expectation is that controls put in place for those other pollutants will also reduce a portion of a power plant's carbon dioxide emissions. If EPA is right, that could significantly blunt the impact of today's decision," he said.

The Clean Air Task Force, a trade group, said the EPA could still use its authority to set stringent standards based on pollution-control technologies, including carbon scrubbers and gas/hydrogen co-firing, as well as and heat rate improvements.

The impact of this week's high-court decision will likely depend on whether lower courts extend SCOTUS's reasoning to challenges to regulations being reviewed under sections of the Clean Air Act or under different environmental laws.

The Clean Air Act, now more than 50 years old, is considered by many to be one of the most successful pieces of U.S. law ever. Several studies have credited it not only with greatly reducing pollution and smog but paying dividends in health improvement and increased economic productivity.

Many power plants, and fossil-fuel companies in part, have been diversifying their energy portfolios to include more alternatives, such as wind and solar (ICLN). In fact, Chevron this year announced it will buy Renewable Energy Group Inc.

Natural gas remains a debate, however. Many in the energy industry push for its inclusion in a cleaner-energy future in order to support U.S. energy independence (USO) and keep energy costs down.

The natural gas sector has targeted a reduction in methane emissions and is championing the still-developing technology of capturing and storing emissions. Environmental groups say natural gas must be included on the list of emitting fossil fuels that the U.S. and others eventually eliminate.

The White House has set other federal efforts in motion, including making buildings more efficient and changing the fleet of government vehicles to all-electric. But other, incentive-based proposals that would help green the power sector and build out solar(ICLN) and more in U.S. homes have been so far rejected in a stalled Build Back Better spending plan.

-Rachel Koning Beals


(END) Dow Jones Newswires

06-30-22 1203ET

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