A recent article by Lesley Clark and Niina Farah of E&E News discusses the implications of the Supreme Court’s recent decision in West Virginia v. EPA on three major climate rules.
In West Virginia , the Court considered the legality of the Clean Power Plan—an Obama era regulation that pointed to EPA’s authority under the Clean Air Act to impose emission limits on existing power plants achievable with the best available “system” for emissions reduction. Adopting a broad interpretation of “system,” the Clean Power Plan set emissions limits for coal power plants only achievable through “generation shifting” or the purchasing of power from lower carbon sources. Boyden Gray & Associates filed an amicus brief in the case urging the Court to reverse the D.C. Circuit’s decision upholding EPA’s statutory authority and to clarify its nascent major questions doctrine. The Court appears to have listened. In a 6-3 majority opinion written by Chief Justice John Roberts, the Court found that West Virginia was a major questions case and that the Clean Power Plan was not within EPA’s statutory authority. Responding to questions from E&E News, Boyden Gray & Associates partner Jonathan Berry said, “The Court has finally given full voice to its long-implicit major questions doctrine. . . . It’s common sense: the more important something is, the more clearly it will be expressed, especially when it represents a significant departure from the status quo.”
The implications of the Court’s decision in West Virginia, Clark and Farah explain, will stretch far beyond just the Clean Power Plan.
The regulations that could be subject to the court’s interpretation of a “major questions” issue — which involve “vast economic or political significance” — could run the gamut from EPA’s rules to boost car emissions standards, new climate accounting proposals from the Securities and Exchange Commission and new Federal Energy Regulatory Commission initiatives.
Discussing the EPA’s GHG tailpipe emissions rule, the article quotes from Boyden Gray & Associates petition for review of that same rule.
Similar to West Virginia v. EPA, the lawsuits argue that EPA is exceeding its authority by using the rule to shift the transportation sector away from liquid fuel vehicles to electric ones, as opposed to simply regulating greenhouse gas emissions.
“In designing a rule to intentionally favor one greenhouse gas reducing technology (electrification) over others … EPA has claimed a new authority to unilaterally transform the U.S. transportation fuel infrastructure — a transformation that Congress did not authorize in the Clean Air Act,” wrote a coalition of ethanol groups, including six state corn-grower associations.
The article also points to the SEC proposed climate risk-disclosure rule as a regulation that may implicate the major questions doctrine. In its comment letter on the proposed rule, Boyden Gray & Associates explains:
The volume and the scope of the information that the proposed rule seeks is breathtaking. Registrants would be required to disclose a panoply of “climate-related” information: “physical risks” from extreme weather; so-called “transition risks” posed by potential future climate policy; a registrant’s own greenhouse gas (“GHG”) emissions—and often upstream supplier and downstream consumer emissions as well— to “assess a registrant’s exposure” to climate risks; and a “transition plan” where a registrant is forced to explain how they will reduce their disclosed risks by reducing GHG emissions. . . .
The major-questions doctrine requires Congress to “speak[ ] clearly” when it delegates “powers of ‘vast economic and political significance’” to an agency. The SEC’s proposed environmental regulations are of vast economic and political significance. They represent perhaps the most expansive regulatory framework ever adopted by the SEC, affecting not just listed companies but every single link in those companies’ supply and distribution chains, right down to the everyday customer. The proposed rule would regulate all those entities and individuals either directly or indirectly, meaning there will hardly be a company or even person who would not be affected by the proposed rule.