The Supreme Court has limited the power of the EPA – so what now?

Steam rises from the cooling towers of a coal-fired power plant at Duke Energy’s Crystal River Power Complex in Crystal River, Florida, USA, on March 26, 2021.

Dane Reese | Reuters

On Thursday the Supreme Court changed the rules of the game in the race to limit global warming by limiting the EPA’s mandated carbon emissions mandate.

In particular, the court ruled in West Virginia v. The EPA said it was too much effort on the part of the EPA to dictate that electricity generation be switched from one source, say coal, to wind or solar, saying such a mandate should only come from from Congress.

“There is little reason to believe that Congress is entrusting such decisions to the Agency,” Chief Justice John Roberts wrote in 6-3. solution, joined by other conservative members of the court. “The major and subsequent trade-offs associated with such a choice are those that Congress has likely provided for itself.”

The decision was based on a recent concept called the “basic issues doctrine,” which argues that government agencies should do the will of Congress and its elected leaders, and not decide these issues on their own. The ruling says that by regulating such important components of the economy as electricity generation, the EPA goes too far.

“The constitution does not permit agencies to use correspondence and telephone instructions as a substitute for laws passed by people’s representatives,” Judge Neil Gorsuch wrote in a concurring opinion.

Judge Elena Kagan wrote a strong dissent, arguing that it is dangerous to strip the EPA of any power precisely when the United States — and much of the world — is not meeting its decarbonization goals. “If current levels of emissions continue, babies born this year could live to see parts of the east coast swallowed up by the ocean,” Kagan wrote.

“Whatever else this court knows about, it has no idea how to deal with climate change. And let’s say the obvious: the stakes are high. The Court appoints itself – instead of Congress or an expert agency – as the decision maker on climate policy. I can’t think of anything more frightening,” Kagan wrote.

However, although the court limited the powers of the Environmental Protection Agency, it did not make the agency powerless to fight carbon emissions. Among other things, it can still regulate greenhouse gas emissions from specific power plants. States can also make their own laws, although enforcement can be tricky.

Meanwhile, while it is believed that fossil fuel suppliers are likely to take advantage of the decision to delay decarbonization and challenge future laws in court, clean energy is becoming cheaper, which could accelerate the phase-out of fossil fuels without government intervention.

What else the EPA and the states can do

This was stated by the administrator of the US Environmental Protection Agency Michael S. Regan. in a statement on Thursday, he is “deeply disappointed with the decision” but added that the agency “will move forward with setting and implementing environmental standards that are in line with our commitment to protect all people and all communities from environmental harm.”

According to the Environmental Protection Agency, there are still several arrows in his quiver. Alex Gilbert, Adjunct Lecturer at Johns Hopkins University and director of nuclear startup Zeno Power.

“This is a narrow technical and procedural decision that has a relatively limited impact on general EPA authorities,” Gilbert told CNBC. “The Court has left the door open for the Biden administration to set standards using specific capabilities, as well as other systemic ways to reduce emissions that do not require generational switching.”

The commitment of coal-fired power plants to maximize their efficiency could cut greenhouse gas emissions by 10-15%, according to Eric SchaefferExecutive Director Environmental projectnon-profit non-partisan organization whose goal is to strengthen policies to protect public health and the environment.

In addition, the Environmental Protection Agency may still require emission reductions by implementing standards requiring conversion of coal-fired power plants to burn natural gas, Schaeffer told CNBC. Burning natural gas produces about 40% less carbon dioxide than burning coal to produce the same amount of energy. according to the US Energy Information Administration.

Carbon capture and sequestration technologies can also help existing businesses minimize plant-level greenhouse gas emissions, Schaeffer said, but the technology is still prohibitively expensive.

“EPA should consider costs when setting carbon emission standards for power plants,” Schaeffer told CNBC. “The carbon sequestration requirement for existing plants is unlikely to pass the test because it is very expensive, so it is unlikely to be the basis for any revised standards.”

If the agency forces coal-fired plants to switch to natural gas or implement carbon capture, it could lead to their shutdown, speeding up the switch to renewables. “Compliance costs are too complex for large facilities,” Gilbert told CNBC.

Schaeffer also agrees that the Supreme Court still leaves the EPA open to meaningful action.

“The Court has at least made it clear that the EPA can impose carbon emissions on certain power plants that are based on efficiency gains and fuel switching. This approach could actually lead to some pretty strict restrictions,” Schaeffer told CNBC.

According to the EPA, state governments can set emission targets. Jennifer K. Rushlowdirector of the Center for Environmental Law at Vermont Law School.

“Quite a few states now have economy-wide limits on greenhouse gas emissions, often referred to as global warming solution laws,” Rushlow told CNBC. California and Massachusetts were the first states to pass such GWSA laws, she said.

However, complying with these state GWSA laws can be difficult.

“In many states, these laws are not enforceable by third parties, and therefore, if the state does not take sufficient measures, the laws become simply desirable. However, in some cases enforcement was possible,” Rushlow said.

She speaks from her experience participating in the Massachusetts trial, Cain v. Department of Environmental Protection, which managed to convince the state to take measures to reduce greenhouse gas emissions. Vermont also has a GWSA.

“If state GWSAs can have teeth like that, they have a real chance of making a difference,” Rushlow told CNBC. “Although, of course, climate change is a global issue, so we need more than a few states to fulfill these obligations.”

Further litigation likely

The decision may not be as dire as it could be, but experts believe it could help the fossil fuel industry delay moves to decarbonize the economy, paving the way for them to challenge the new rules in court.

“I am clearly of two minds here. On the one hand, yes, this is a rather narrow decision, at least as far as what could happen. This is a beacon of hope and partly good news for the day.” Gernot Wagnerclimate economist at Columbia Business School, told CNBC.

“On the other hand, the fossil industry – the coal interests, really – knows they are losing the war. Everything they stake on is something that helps delay the inevitable. another thin lifeline.”

In particular, the decision opens the door to new litigation, which will inevitably delay decarbonization.

“More importantly, of course, this is not the end. Any decision of the Environmental Protection Agency, as well as any legislation, will be challenged in court. coal interests and a loss to everyone else,” Wagner said.

“So yes, the EPA could regulate coal itself, which would make coal (even) more expensive and could result in some companies moving away from coal. presumably) agree and interpret the SCOTUS ruling as saying that regulation can’t be too onerous or it will lead to a fuel switch – and we’re back to square one.”

Private markets could cause a shift anyway

While government action is still needed to cut carbon emissions in the long term, private markets could pose a problem in the near future. That’s because clean energy is rapidly becoming the cheapest form of energy, says one expert.

“I don’t think this decision will be as important for the electric power industry in the long term as many believe. The private sector is already demanding low-carbon energy, and lower-carbon sources – whether renewables or natural gas – are very expensive. competitive, ” Michael P. Vandenberg, professor of environmental law at Vanderbilt Law School, told CNBC. “We can get a billion tons of greenhouse gas reductions from the private sector every year, which is equivalent to a full reduction in Germany’s emissions.”

Vandenberg is optimistic about the future, in part because he didn’t expect the federal government to take meaningful action to combat climate change anyway.

“I predicted the government wouldn’t do enough about a decade ago, so I’ve spent the last decade developing two major alternatives designed to cut emissions even without major federal action,” Vandenberg told CNBC. He sees changes in the private sector and rising consumer demand for sustainable alternatives. “We can get about half a billion tons from improving household energy efficiency,” Vandenberg told CNBC.

“It’s not a solution, but they can buy time for voters to overcome barriers against federal government action,” Vandenberg said.