U.S. Supreme Court Limits How EPA Can Regulate Greenhouse Gases

In West Virginia v. EPA, a case argued by Jones Day, the U.S. Supreme Court determined that Congress did not authorize the U.S. Environmental Protection Agency ("EPA") to compel generation shifting among existing electric power plants to combat climate change using the Clean Air Act. The decision announces the arrival of the major questions doctrine without a single reference to the Chevron deference that EPA relied upon as one of the legal building blocks for the now repealed Clean Power Plan.

Simply stated, the doctrine requires administrative agencies to have clear authority from Congress before they issue a major rule that significantly expands an agency's authority beyond what was previously understood. Examples include an agency charged with regulating prescription medicines attempting to regulate tobacco, an agency charged with regulating workplace safety attempting to regulate public health, and an agency charged with regulating public health attempting to regulate landlord-tenant relations. In the case of the Clean Power Plan, the Court found that an agency charged with regulating environmental matters was attempting to regulate how electricity is generated and distributed and determined that Congress had not clearly authorized the agency to step into that role.

The decision does not eliminate EPA's authority to regulate greenhouse gas emissions from existing sources. Quite the contrary. It confirms that the Clean Air Act confers this authority on EPA. The decision does, however, limit future EPA regulation under existing law to systems that are demonstrated, reasonably economical, and designed to reduce emissions from existing sources without attempting directly to regulate whether and how much a particular source operates. Of course, the decision also implicitly invites Congress to step forward and expressly authorize action by EPA. For a more in-depth discussion of the implications of West Virginia v. EPA, see U.S. Supreme Court Curbs Executive Power and Reach of EPA.

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