This piece was first published in The Regulatory Review on July 12, 2022. It is reprinted with their permission.
The Supreme Court finally delivered its long-awaited opinion in West Virginia v. EPA on the last day of this year’s term. The opinion concerns the scope of the U.S. Environmental Protection Agency’s authority to regulate greenhouse gas (GHG) emissions from power plants—an issue that has been winding its way through various courts since 2015.
The long wait for the opinion offered plenty of time for dread and suspense to mount. Prognosticators suggested that the opinion might be “the Earth’s nightmare” and worried that it might deliver a major victory in the conservative effort to “chip away at the scope of federal agencies’ work.”
It is only in the context of these grim predictions that early takes on the opinion in West Virginia v. EPA included “a sigh of relief” and a reflection that the opinion is “about as good (‘good’) as could have been hoped for.” Inasmuch as the Court did not completely strip EPA of its authority to regulate greenhouse gases, these reactions are understandable. But once one de-anchors from these dire expectations, there is no escaping the conclusion that the opinion is dangerous on two fronts: for the climate and for administrative capacity more broadly.
Understanding the stakes of West Virginia first requires getting technical. Section 111 of the Clean Air Act gives EPA authority to design the “best system of emission reduction” for regulating air pollutants from power plants. This authority includes GHGs, as confirmed in the Supreme Court’s 2007 opinion in Massachusetts v. EPA, which this opinion leaves untouched. The central debate in West Virginia is whether EPA exceeded its statutory authority by requiring “generation shifting”—movement away from polluting plants and toward cleaner energy sources—as part of the best system of reducing power plant GHG emissions.
The majority answers this question in the affirmative by invoking the “major questions doctrine.” Under this doctrine, as framed by the majority, the Court typically will “greet assertions of extravagant statutory power over the national economy with skepticism.” The majority holds that because EPA’s rules attempted to “substantially restructure the American energy market,” the case falls under the major questions doctrine. The Court proceeds to apply the doctrine and concludes that whatever “system” means in Section 111 (which it refuses to clarify fully), that term cannot encompass a move so bold as generation shifting. A concurrence by Justice Neil Gorsuch, joined by Justice Samuel Alito, adds little to the majority’s substantive reasoning even as it attempts to articulate and defend a bolder major questions doctrine.
The dissent, authored by Justice Elena Kagan and joined by Justices Stephen Breyer and Sonia Sotomayor, vehemently disagrees with the majority’s methodology, reasoning, and conclusions. Kagan accuses the majority of whipping up a new major questions doctrine of dubious pedigree, applying it through questionable factors, and ignoring considerable textual and historical evidence that Congress did in fact intend to accord EPA flexibility through its use of the term “system” in Section 111. Her reasoning is undergirded by a simple observation: “A key reason Congress makes broad delegations like Section 111 is so an agency can respond, appropriately and commensurately, to new and big problems.”
Even if the Court did not go as far as some feared in constraining EPA’s authority, make no mistake: This decision is a blow for progress on mitigating climate change. EPA chose generation shifting for a simple reason. It was the most rational and cost-effective way to accomplish its statutory mission of regulating power plant emissions that endanger the health and welfare of Americans. Going forward, the agency may be able to pivot to a more constrained reading of “system” to regulate power plants, and it can deploy other tools that influence the costs of various generation sources. But whatever course it pursues will likely be a less effective and more costly regime.
That is a particular problem given the electricity sector’s centrality to ameliorating climate change. Most experts agree that the linchpin of reducing GHGs is to “electrify everything,” including driving, heating and cooking, and much of heavy industry. This strategy, however, hinges on being able to clean up power plants rapidly and cost-effectively. States and regions can still pursue this aim, even after the Court’s ruling in West Virginia, and many are making great strides in this regard. But scientific modeling suggests that “generation shifting” toward clean energy sources must happen at a more rapid and sustained pace for the United States and the world to have any chance at averting catastrophic levels of warming. West Virginia considerably impedes concerted federal progress on this front.
The Court’s approach to the major questions doctrine also threatens agency ambition and ingenuity more broadly. The majority anchors its rejection of EPA’s strategy in two factors: (1) EPA was trying to do something big and important to address climate (even if the majority strategically overstates the breadth of this ambition, as the dissent observes), and (2) the agency had not previously used its Section 111 authority in quite the same way. As the dissent points out, this reasoning represents a significant extension of the major questions doctrine because it targets an agency acting to address a problem that is distinctly and indisputably within its authority.
In essence, the majority is saying to EPA: You may tinker at the edges of climate change, but as soon as you really start to tackle the problem, you will be ruled out of bounds without new, distinct congressional authorization.
This reasoning is likely to cast a shadow across bold actions at a variety of regulatory agencies trying to solve a panoply of large and pressing social problems, including climate change, inequality, and outsized corporate political and economic power. Agencies will now regulate under the presumption that the more creative, proactive, and effective they are in designing rules to improve the lives of Americans, the more likely the Court will be to strike these down. West Virginia thus establishes momentum toward an anemic, reactionary regulatory state—even as Congress, which the majority tasks with fixing all these tensions, is widely acknowledged to already suffer from these same flaws. That result might jibe with this Court’s prevailing preference for small and ineffective government, but it is a setback for those struggling to create a modern democracy capable of serving the many rather than the few.