Understanding EPA v. West Virginia: How will the Supreme Court’s ruling impact GHG regulation?
with Michael Gerrard
On June 30, 2022, the United States Supreme Court handed down a decision on the case “EPA v. West Virginia,” ruling in a 6-3 vote that the EPA exceeded its statutory authority by setting greenhouse gas emissions standards that would effectively require utilities to shift away from fossil fuel-sourced power generation to renewables.
At the time of the decision, it was met with a raft of alarmist headlines, forecasting that it would be a disaster for climate change mitigation, and that it threatens the future regulatory authority of all federal agencies. Is it really that bad?
In this episode, Michael Gerrard, professor of professional practice in climate change law and policy at Columbia University, helps us understand exactly what the EPA v. West Virginia decision said, and what its impact is likely to be.
Faculty Director at the Sabin Center for Climate Change Law at Columbia University
Faculty Director at the Sabin Center for Climate Change Law at Columbia University
Michael Gerrard is a professor and faculty director at the Sabin Center for Climate Change Law at Columbia University. Before joining the Columbia faculty, he practiced law in New York, including at Arnold & Porter, where he remains a senior counsel at the New York office. He has written or edited 13 books on various topics in environmental and energy law. His most recent book is Legal Pathways to Deep Decarbonization in the United States.
Climate Now Host
Climate Now Host
[00:00:00] James Lawler: You are listening to Climate Now, a podcast that delves into the scientific ideas, technologies, and policies that will help us address the global climate crisis and achieve a net-zero emissions future. I’m your host, James Lawler, and today we’ll be talking about the recent U.S. Supreme Court decision about the Environmental Protection Agency’s (EPA) ability to regulate greenhouse gas emissions.
[00:00:25] James Lawler: If you find today’s episode interesting, subscribe to our newsletter at climatenow.com. There you’ll also find dozens of conversations with experts and videos explaining key ideas related to the energy transition and climate science.
[00:00:38] On June 30th, 2022, the U.S. Environmental Protection Agency became the focus of a perennial political question in the United States: what is the line between appropriate federal regulation and bureaucratic overreach?
[00:00:52] James Lawler: When the Supreme Court handed down the decision on the case EPA versus West Virginia, the Supreme Court ruled that the Clean Air Act, a law enacted by Congress in 1970, did not give the EPA the mandate to place restrictions on existing coal power plants for the purposes of regulating greenhouse gasses.
[00:01:11] James Lawler: The headlines and news reports following this decision range from ominous to apocalyptic.
[00:01:16] Despite growing dangers from climate change, tonight the U.S. Supreme Court curbing the government’s power to fight it.
[00:01:22] The Supreme Court has sharply limited the environmental protection agencies power to regulate carbon emissions from power plants.
[00:01:30] James Lawler: In this episode, we are going to move past the headlines and take a look at the meat of this decision. What exactly did the Supreme Court rule, and what is going to happen to the nation’s ability to regulate or decrease greenhouse gas emissions after this decision?
[00:01:45] James Lawler: Joining me to help answer these questions today is Professor Michael Gerrard, founder and faculty director of the Sabin Center for Climate Change Law at Columbia University.
[00:01:55] James Lawler: Professor Gerrard began practicing law in 1979, and in addition to his research and teaching at Columbia, he remains senior counsel for the law firm, Arnold and Porter. He has also authored or edited over 13 books on environmental law including, most recently, Legal Pathways to Deep Decarbonization in the United States.
[00:02:15] James Lawler: Michael, thank you so much for joining us. It’s great to have you on the podcast today.
[00:02:19] Michael Gerrard: It’s a pleasure to be with you.
[00:02:20] James Lawler: We’d love to start with a little bit of background for our listeners. Can you tell us how and why the Environmental Protection Agency (EPA) was originally formed, and what its mandate was?
[00:02:34] Michael Gerrard: The EPA was created by President Nixon, of all people.
[00:02:40] Michael Gerrard: It was a time of tremendous environmental activism around the country, and EPA was actually cobbled together from several existing units and other agencies, and I was given the job of implementing the nation’s environmental laws. We didn’t have many at the time, but later in the year, in 1970, the Clean Air Act was enacted, followed in fast order by the Clean Water Act, the Endangered Species Act, the hazardous waste laws and lots of other laws, and so the EPA is in charge of carrying out most of those laws.
[00:03:14] James Lawler: How did the EPA’s mandate evolve to include consideration of greenhouse gas emissions over time?
[00:03:21] Michael Gerrard: Well, the Clean Air Act defines air pollution very broadly. During the Bill Clinton Administration, EPA said that the Clean Air Act covers greenhouse gasses, but they didn’t act on it. When George W. Bush came in, he said he wasn’t gonna be doing anything on climate change, and there was a petition filed by a citizen’s group that made its way up to the Supreme Court. In 2007, the Supreme Court issued a landmark decision called Massachusetts versus EPA that said yes, indeed, the clean air act does cover greenhouse gasses and EPA needs to regulate it—if it issues what’s called an endangerment finding, which is a formal finding that greenhouse gasses pose a risk to health and, and welfare.
[00:04:11 ] James Lawler: To establish an endangerment finding under the rules of the Clean Air Act, the EPA had to review existing scientific literature and determine whether it established, with reasonable certainty, that emissions of greenhouse gasses could endanger public health or welfare. The EPA found that, indeed, there was sufficient evidence for an endangerment finding, which they issued in December, 2009.
[00:04:35] James Lawler: The finding allowed the EPA then to exercise regulatory authority over greenhouse gas emissions. But the next step was to establish how and what exactly they were going to regulate.
[00:04:48] Michael Gerrard: The country was in a recession at that time, the auto industry in particular was in bad shape, and the Obama Administration negotiated with the auto industry for a deal under which the administration would essentially bail out the auto industry, and the auto industry would acquiesce in stronger fuel economy standards and greenhouse gas standards. They also brought in California, which has its own special authority, to regulate that. So in 2010, they reached this deal to have much cleaner cars with lower greenhouse gas emissions.
[00:05:25] Michael Gerrard: So, that was the first major regulatory action. EPA then began issuing regulations on stationary sources like power plants and factories, but those regulations were using a part of the Clean Air Act that only applied to newly built sources, or modified sources. All of this was challenged in court. More than a hundred lawsuits were filed.
[00:05:48] James Lawler: Who were the counter-parties to these lawsuits?
[00:05:52] Michael Gerrard: It was mostly industries that didn’t want greenhouse gasses to be regulated, and some of the states that opposed climate regulation, led by Texas and West Virginia.
[00:06:03] Michael Gerrard: So, they brought that lawsuit, the court, the DC circuit, resoundingly upheld everything the EPA did. They said that EPA had ample scientific basis for the endangerment finding, they said that the motor vehicle rule was just fine, and they left standing the regulations on stationary sources. That case then went up to the U.S. Supreme Court. The Supreme Court didn’t want to hear the challenge to the endangerment finding, nor the challenge to the motor vehicle rule. They said there was one technical issue with the regulation of stationary sources, and they somewhat limited EPA’s ability to regulate new stationary sources.
[00:06:47] James Lawler: All these court cases were taking place between 2012 and 2014, and even the Supreme Court ruling on the stationary sources did not mean that the EPA no longer had the right to regulate greenhouse gasses from them. It said that under this part of the Clean Air Act, EPA could only regulate greenhouse gasses from new sources that already needed an EPA permit because of other types of air pollution.
[00:07:11] James Lawler: And it turned out that with this decision, the EPA could still regulate about 95 percent of the greenhouse gasses from stationary sources. So, the EPA was approaching greenhouse gas emissions in small, methodical steps, and each of these steps were broadly supported by the courts.
[00:07:28] James Lawler: Okay. So far, EPA’s regulation of greenhouse gas emission seems to be going strong as of 2014.
[00:07:47] James Lawler: Now that we have that history, can you explain the most recent case involving EPA vs. West Virginia? What exactly is this case? What was the background? And what was the court essentially deciding on?
[00:07:50] Michael Gerrard: So, in 2015, EPA issued a set of regulations called the Clean Power Plan, which was designed to basically move away from coal and generating electricity.
[00:08:03] Michael Gerrard: Coal, at the time, coal-fired power plants were the single largest source of greenhouse gas emissions, and nobody was building new coal plants, but there were a lot of old ones. So, EPA had to use a different section of the Clean Air Act, section 111(d) ,to regulate these old coal fired power plants.
[00:08:25] Michael Gerrard: So, EPA issued this regulation.
[00:08:26] Michael Gerrard: It too was challenged in a bunch of lawsuits in the DC circuit. The DC circuit refused to stay the rule, they refused to put it on hold while the litigation proceeded. But then to everybody’s shock, the Supreme Court in February of 2016, on its own stayed the rule with no explanation whatsoever, but by a five to four vote, the Supreme Court said, halt the litigation proceeds, but the Clean Power Plan is not in effect.
[00:08:56] James Lawler: And why was that so shocking?
[00:08:58] Michael Gerrard: Because the case was being heard by the Court of Appeals, which had already denied a stay, so in every other case that anybody knows about, the Supreme Court waits for the court of appeals to rule before they step in themselves, but here they jumped in while the case was still pending before the Court of Appeals.
[00:09:15] Michael Gerrard: So, the Supreme Court stayed the decision, stayed the rule. The DC Circuit then heard argument on the case in September of 2016, but a couple months later, Donald Trump was elected President, and he had campaigned on a pledge to kill the Clean Power Plan. So, the DC Circuit apparently rationally concluded, ‘no point in deciding, because the Clean Power Plan is going to go away anyway,’ which it did. The Trump EPA repealed a Clean Power Plan, and they issued a much weaker rule called the Affordable Clean Energy Rule, which really would’ve done almost nothing to reduce greenhouse gas emissions.
[00:09:57] James Lawler: But litigation can go both ways. As we learned in the Massachusetts first EPA decision, the Affordable Clean Energy Rule came under fire, just like the Clean Power Plan, but this time the lead plaintiff suing the EPA was the American Lung Association. That because of Massachusetts first EPA, the EPA had to regulate greenhouse gasses, and the Affordable Clean Energy Rule didn’t really do that.
[00:10:18] Michael Gerrard: So, on January 19th, 2021, the day before Biden was inaugurated, the DC Circuit issued a ruling on the side of the American Lung Association saying the Affordable Clean Energy Rule from Trump was no good, and that EPA was right when it issued the Clean Power Plan. So, Biden was inaugurated, but the EPA said, oh, ‘wait a minute, we’re not gonna reinstate the Clean Power Plan.’ It’s obsolete, but mostly because of fracking and the cheaper cost of natural gas. A lot of these coal fired power plants have shut down anyway, and the numerical objectives of the Clean Power Plan have already been met. So, we’re not gonna go back to the Clean Power Plan.
[00:11:00] Michael Gerrard: We’re going to come up with another set of regulations to deal with the coalfire power products that we’re still operating. There are now on the order of 250 coal fired power plants that are still running. At one time, there were 750.
[00:11:15] James Lawler: In the U.S.?
[00:11:16] Michael Gerrard: In the U.S. Most of them in the U.S. have been shut down, but there’s still a lot, and coal fired power plants are now the second largest source of greenhouse gas emissions behind motor vehicles. So, EPA is coming up with new regulations.
[00:11:30] Michael Gerrard: In October of 2021, the Supreme Court shocked everybody again by agreeing to take up this case, to review the decision from the DC Circuit. That was a shock because there was no regulation that was really on the table.
[00:11:46] Michael Gerrard: EPA said they weren’t going to go back to the Clean Power Plan. The Affordable Clean Energy Rule was dead, but the Supreme Court wanted to hear the case anyway.
[00:12:54 ] James Lawler: What case did they want to hear again?
[00:11:56] Michael Gerrard: Well, there were a lot of lawsuits that had been brought against EPA for what it had done, and the Supreme Court agreed to hear four of them, one each from West Virginia, North Dakota, and a couple of coal companies.
[00:12:10] James Lawler: Okay. So, they agreed to hear these four cases.
[00:12:14] Michael Gerrard: Right, and they issued their decision on June 30th, 2022.
[00:12:18] James Lawler: And what did they decide?
[00:12:19] Michael Gerrard: They decided that the Clean Power Plan exceeded EPA’s authority under the Clean Air Act. And they base their decision not primarily on the text of the statute, because the text of the statute, the words in it, the Court acknowledged plausibly did allow EPA to do that.
[00:12:39] Michael Gerrard: Instead, the court used a judge made doctrine, a doctrine they had made, called the Major Questions Doctrine, and the basic idea of the Major Questions Doctrine, is that federal agency can’t regulate a big sector of the economy without really explicit authorization from Congress. They said that the authorization in this particular section of the Clean Air Act, Section 111(d), was too vague and general, and the EPA really needed much more specific authority from Congress to enact such an important regulation.
[00:13:17] James Lawler: Section 111 of the Clean Air Act is what gives the EPA authority to establish nationwide emission standards for major stationary sources of dangerous air pollution, and Section (d) outlines how the EPA should approach existing, rather than new, stationary sources. It states that the EPA should identify the “best system of emissions reduction for a specific pollutant and type of stationary source and how much emissions reductions are achievable for that system.”,
[00:13:47] James Lawler: Then, individual states are allowed to take whatever approach they deem most suitable to match the emissions reductions that the EPA thinks should be achieved by the “best system” approach. In our conversation, I asked Michael about both how the Major Questions Doctrine worked, and how it was applied in this case to Section 111(d).
[00:14:07] James Lawler: So, there’s a lot to talk about there. First, I’d love to talk about this Major Questions Doctrine.
[00:14:13] James Lawler: Does this doctrine make sense, or if not, why?
[00:14:17] Michael Gerrard: So, the major questions doctrine is generally being seen as one element of a longstanding conservative attack on the Administrative State. The idea that agencies are getting too big for their bridges. They’re doing more than Congress really explicitly authorized. That it’s anti-democratic to have these unelected bureaucrats make these big decisions on big issues of policy, and that should be left to Congress.
[00:14:45] Michael Gerrard: In the last year, the Supreme Court has used it to strike down a couple of the actions that the Biden Administration did to fight the COVID pandemic. They said that the Centers for Disease Control (CDC) could not impose a moratorium on evictions of tenants in areas that had high levels of infection, and more surprisingly, they said that the Occupational Safety and Health Administration (OSHA), could not issue a regulation requiring major employers to require their employees to either get vaccinated or take frequent COVID tests.
[00:15:20] Michael Gerrard: That was somewhat surprising because a lot of workers were being exposed to COVID in the workplace, and the purpose of OSHA is to protect workers from getting sick or injured in the workplace. But anyway, the court said that was going too far.
[00:15:36] James Lawler: You know, that position makes a certain kind of sense, that we don’t want bureaucrats running everything, but what are some reasons that maybe we would want the EPA or other agencies to have this kind of authority in our society?
[00:15:50] Michael Gerrard: Well, in the first place, Congress is largely paralyzed on many issues. Congress has not passed a major new environmental law since 1990. We’ve had 32 years of mostly partisan paralysis. The Democrats are on one side, the Republicans are on another side, they can’t come together and come up with policy.
[00:16:10] Michael Gerrard: So, we have this looming crisis of climate change and if Congress can’t act because of paralysis, and the courts say the Administration can’t act because Congress hasn’t acted, then we’re really stuck. And, it’s not only climate change, it’s other issues, but that’s one major problem.
[00:16:28 ] Michael Gerrard: It really stands in the way of the ability of the federal government to solve major problems.
[00:16:34] James Lawler: So, let’s talk about how then it impacts the EPA specifically.
[00:16:38] Michael Gerrard: Well, strictly speaking, the decision was very narrow. It said that the problem was that EPA was trying to engage in generation shifting, and trying to move the generation sources, the power sources, in the electricity sector away from coal and toward cleaner sources, like natural gas and renewables. That kind of generation shifting was such a macro action that it was more than EPA could do. But, as I said, and as EPA has already said, as soon as Biden came in, they weren’t gonna do that. They were going to use other techniques. So, the narrow direct ruling doesn’t amount to much.
[00:17:24] James Lawler: I see.
[00:17:25] Michael Gerrard: The bigger concern is the broader implications of that. Just, what is a major question? How much is too much? And that’s a question that is hanging over the EPA, it’s hanging over the Food and Drug Administration, it’s hanging over the Labor Department, it’s hanging over the entire federal government because nobody really knows just what is a major question.
[00:17:36] Michael Gerrard: That’s going to do a couple of things. One, it’s going to be an invitation for anybody who doesn’t like a rule to challenge it on the Major Questions Doctrine. You know, these rules tend to get challenged in Court anyway, but here’s a new theory that they’re gonna throw in and see if it works. The other thing it’s going to do is deter innovation.
[00:17:56] Michael Gerrard: The Supreme Court was basically saying, well, if this is the kind of thing that an agency has been doing all along, that’s fine, but the minute you try something really new, it might be a problem. So, a lot of agencies, and their career staffs in particular, are gonna be really nervous that if they try to be imaginative and use an existing statute that they’ve been using for years in a new way, it might get shut down.
[00:18:22] Michael Gerrard: But, we don’t know what’ll happen. We’re going to have a whole lot of uncertainty for years about just what is a major question.
[00:18:29] James Lawler: Okay. Now, as it pertains to emissions from point sources like coal fired power plants and other power plants, as it pertains to climate and greenhouse gasses, where are we now in terms of rules that the EPA may come out with, and what rules power plants need to abide by?
[00:18:48] Michael Gerrard: I think EPA may come out with regulations regulating other pollutants that come out of coal fired power plants. These plants emit mercury and nitrous oxides, particulate matter and other things, and so EPA may issue stronger regulations for pollutants. Coal fired power plants also produce a lot of ash, which is toxic in its own way. EPA may strengthen the regulations on coal ash. They’re cooling systems release a lot of hot water into rivers, and under the Clean Water Act, the agency has authority over that. So, I think we’ll see the use of a lot of different authorities that EPA has to regulate coal plants.
[00:19:34] Michael Gerrard: However, one other big problem is, is it going to be an issue if they’re doing it because they wanna control greenhouse gases. Do they have the motivation of controlling greenhouse gases? That may get them into problems. So, if they’re cranking down on mercury standards, it’s important that they do that mostly because mercury is bad for you, which it is, but to concentrate on those factors, the reasons why these standards were initially authorized, rather than as a back door to regulating greenhouse gasses.
[00:20:07] James Lawler: How would one possibly discern motivation?
[00:20:10] Michael Gerrard: Well, in the West Virginia decision, the Supreme Court was citing press releases and congressional testimony and all kinds of other things, so you’ll have other statements about motivation aside from what’s in the formal regulatory document.
[00:20:25] James Lawler: I see. Okay, but what can the EPA do when it comes to greenhouse gas emissions from point sources, if anything, now?
[00:20:33] Michael Gerrard: Well, in the first place, you’re saying point source, so motor vehicles are currently the biggest source, and EPA has, I think, very clear explicit statutory authority to regulate greenhouse gas emissions from motor vehicles, from cars and trucks, and so they’re doing that and they are strengthening that.
[00:20:51] Michael Gerrard: They also have the authority to regulate greenhouse gas emissions from new sources. There’s a section of the clean air act, that couple of sections that allow it for new sources, the difficulty is it’s much more constrained when it comes to existing sources. There’s this little section, section 111(d) that has various qualifiers in it. It’s like threading a needle, and the EPA tried to do that with a Clean Power Plan.
[00:21:18] James Lawler: Okay. So, really the issue is existing power plants.
[00:21:21] Michael Gerrard: That’s the biggest issue here, yes.
[00:21:23] James Lawler: Okay.
[00:21:24] Michael Gerrard: As solar and wind become cheaper, and lots of other things happen that we can talk about, I think that’s the greater threat to coal plants.
[00:21:30] James Lawler: Got it.
[00:21:31] James Lawler: So it sounds like, I know there was a lot of press around the time of this decision that this decision was devastating in terms of our ability to regulate greenhouse gas emissions and keep our warming under some kind of control.
[00:21:46] James Lawler: Do you see it that way, or no?
[00:21:47] Michael Gerrard: I think some of the press was based on the concern that the Supreme Court would go further than it did. There was a lot of worry that the Supreme Court would annul Massachusetts versus EPA. After all, just two days earlier, they had annulled Roe versus Wade.
[00:22:04] James Lawler: Right.
[00:22:05] Michael Gerrard: But they didn’t do that. They didn’t go that far. So, the direct impact was a lot narrower than the environmental community had feared. The longer term impact is still unknown. These cases all play out.
[00:22:22] James Lawler: That’s it for today’s episode. To listen to our other interviews, watch our videos, or sign up for our newsletter, visit climate now.com. If you’d like to get in touch with us, you can always email us at firstname.lastname@example.org, or tweet us @weareclimatenow. Subscribe wherever you listen to your podcasts so you don’t miss an episode!
[00:22:41] James Lawler: We hope you’ll join us for our next conversation.
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