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In EPA Supreme Court case, the agency’s power to combat climate change hangs in the balance

The case over carbon pollution from power plants ‘could well become one of the most significant environmental law cases of all time,’ one legal scholar says

Trains filled with coal near the Dry Fork Station energy plant in Gillette, Wyo., in November 2021. (Salwan Georges/The Washington Post)

President Biden’s ambitious plans to combat climate change, blocked by an uncooperative Congress, face an equally tough test next week at the Supreme Court. With the court’s conservative justices increasingly suspicious that agencies are overstepping their powers, the case’s outcome could not only reshape U.S. environmental policy but also call into question the authority of regulators to tackle the nation’s most pressing problems.

On Monday, the court takes up a years-long challenge from coal-mining companies and Republican-led states contesting the authority of the Environmental Protection Agency to mandate sweeping changes to the way the nation’s power sector produces electricity, the nation’s second-largest source of climate-warming pollution.

West Virginia v. EPA comes before a Supreme Court that’s even more conservative than the one that stopped the Obama administration’s plan to drastically reduce power plants’ carbon output in 2016.

“This will undoubtedly be the most important environmental law case on the court’s docket this term, and could well become one of the most significant environmental law cases of all time,” said Jonathan H. Adler, an environmental law expert at Case Western Reserve University School of Law.

Environmental advocates fear the Supreme Court’s conservative majority could limit the Biden administration’s ability to curb carbon pollution from power plants before any regulation is written, and leave the United States short of its climate goals at a time when scientists suggest drastic cuts in emissions are needed to avert dangerous warming. The president wants the U.S. power grid to run entirely on clean energy by 2035.

“It’s hard to see why they took this case unless they were thinking about deploying it against the EPA’s ability to regulate existing power plants,” said Kirti Datla, director of strategic legal advocacy at Earthjustice, a law organization that works on environmental advocacy.

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The new court, bolstered by three justices chosen by President Donald Trump, has sharply questioned whether federal agencies can make sweeping decisions with enormous economic and regulatory consequences. In separate decisions stopping the Biden administration’s plans for a vaccine-or-testing mandate for large employers and extending a nationwide eviction moratorium during the pandemic, the court’s conservatives said federal agencies have exceeded the authority granted to them by Congress.

Years of legal fights over the executive branch’s power to tackle climate change — and a monumental battle by the coal industry — have led to a regulatory stalemate. In 2016, the Supreme Court halted the Obama administration’s Clean Power Plan, which aimed to cut the power sector’s carbon dioxide emissions by a third by 2030. In 2021, a federal appeals court jettisoned the Trump administration’s less-stringent replacement.

Biden’s team has yet to issue its own plan for the power sector. For that reason, environmentalists took it as an “earthquake” when the Supreme Court accepted the case last fall, said Harvard Law School professor Richard Lazarus. It appeared to signal a move on the part of the court’s conservatives to delineate — and probably trim — the EPA’s powers before there were even regulations to review.

EPA officials under the Obama administration said the Clean Air Act gives the agency the authority to work with states to enact broad plans across the power sector to reduce greenhouse gas emissions. But Trump appointees, along with GOP-led states party to the lawsuit, counter the law gives the agency only the power to mandate changes at power plant sites themselves — or as both sides in the fight say, “inside the fence.”

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West Virginia Attorney General Patrick Morrisey (R), who is leading the lawsuit against the EPA, said in a recent interview that the court should not hesitate to rule before Biden’s team is finished working on a power-plant regulation, slated to be revealed this summer.

“We have a federal government that wants to cut emissions in half by 2030, and they’re going to be very aggressive in the issuance of those rules,” Morrisey said. “The damage would be done if the rulemaking would continue unabated. It has to be addressed right now.”

Yet even without federal limits on carbon dioxide emissions, it has been a tough decade for the coal industry. The economics of burning coal have deteriorated as power from cheap fracked gas and subsidized renewable energy flowed into the grid. At least 240 coal plants have retired since 2012, according to the Sierra Club, an advocacy group.

Westmoreland Coal Co. — which kept homes warm during winters in the 19th century, powered locomotives at the start of the 20th and helped fuel America’s victory in World World II — ranks among the hard-hit mining firms. It began mining in Westmoreland County, Pa., in 1854, expanding operations across the Appalachian Basin before relocating its headquarters to Colorado in 1995. By 2017, it sold 49.7 million tons of coal dug from mines dotting the West, from Texas to Alberta, Canada.

But some electricity providers that once bought its coal began switching to cleaner sources of fuel that don’t require expensive emissions controls. After going more than $1 billion into debt in 2018, the firm protected itself from creditors by filing for bankruptcy. Westmoreland Mining Holdings LLC, the company that emerged from those proceedings, is now suing the EPA.

“Looking back, the bankruptcy was a confluence of taking on too much debt and expanding too quickly in a market that severely underperformed expectations,” said Jeremy Cottrell, the firm’s general counsel. “The imposition of excessive and unreasonable regulations is never helpful to any business, and this was also playing out in the background in our industry around this period of time.”

But any lifeline the Supreme Court could throw coal producers would do little to halt the long-term decline of the industry, said Tom Sanzillo, director of financial analysis at the Institute for Energy Economics and Financial Analysis.

“There’s no utility in the United States that’s going to hang its decision to whether or not to build a coal plant again based on the Supreme Court decision,” Sanzillo said, adding that a new Biden rule “might accelerate” the closures of coal plants.

Much of the rest of the corporate sector, having poured money into reducing its carbon footprint, is concerned about the federal government stepping back. In a brief filed last month, Apple, Tesla, Amazon and a dozen other companies said the EPA’s support is “necessary to avoid the worst impacts of climate change.” (Amazon founder Jeff Bezos owns The Washington Post.)

Even a group of electric utilities that collectively serve more than 40 million people asked the court not to tie the agency’s hands prematurely. The court, they wrote in a brief, risks “a ruling untethered to actual circumstances” driving changes in the power sector.

In early 2021, a panel of the U.S. Court of Appeals for the D.C. Circuit said the EPA’s restrictive view of its powers under the Trump administration was not only wrong, but amounts to a dereliction of duty.

The Clean Air Act “lacks the straitjacket that the EPA imposes,” the judges wrote, saying the Trump administration’s view of the law depended on a “tortured series of misreadings.”

“The EPA has ample discretion in carrying out its mandate,” the decision concluded. “But it may not shirk its responsibility by imagining new limitations that the plain language of the statute does not clearly require.”

But Lazarus and others think that is a bolder reading of the law than the current court might affirm. Solicitor General Elizabeth B. Prelogar, representing the Biden administration, seems to agree.

While the administration said the Clean Air Act gives the EPA broad powers, she is arguing that the court should simply dismiss the case because there are no regulations in place for the justices to consider. Moreover, she suggests the Supreme Court can vacate the D.C. Circuit’s decision and postpone a definitive decision on the EPA’s powers until the new administration has acted.

The policy that sparked this battle — the Clean Power Plan — is now moot, since the market has done what regulators could not. “The targets were achieved way in advance, more than a decade before they would have been required,” said Carrie Jenks, executive director of Harvard’s Environmental & Energy Law Program.

But this case could resonate beyond environmental issues, since the Supreme Court’s conservatives have become more and more skeptical of federal agencies exercising their authority on a range of fronts. Pointing to what is called the “major questions” doctrine, the justices are insisting that Congress specifically authorize agency action that touches on significant issues.

“We expect Congress to speak clearly when authorizing an agency to exercise powers of vast economic and political significance,” the majority wrote in lifting the eviction moratorium imposed by the Centers for Disease Control and Prevention last year.

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Because the court is interpreting the provisions of the Clean Air Act, Congress could override whatever the court decides — in theory, at least. But an ideologically divided and partisan Congress has done little to address climate change or clarify the law.

Under Obama, a major bill capping greenhouse gas emissions nationwide passed the House in 2009 only to die in the Senate. Biden risks a similar fate with his climate and social-spending bill, “Build Back Better,” which has failed to win the necessary support of Sen. Joe Manchin III (D-W.Va.).

That leaves the executive branch with the Clean Air Act, written decades before scientists identified global warming as an urgent concern.

“This is a big case because it involves the statute that’s been central to the EPA’s work” on climate change, said Georgetown University Law Center Professor Lisa Heinzerling, who worked at the agency during the Obama administration. Invoking the “major questions” doctrine, she added, is “a huge potential wrecking ball for regulation.”

Democrats view the act’s provisions expansively — and have been shot down by conservative courts. Republicans argue that the law limits the agency’s authority, and liberal courts have pushed back.

“Congress’s failure to do its job has put immense pressure on the executive branch to come up with answers on its own, wherever it finds them,” Adler said. “And that in turn creates challenges for the courts, who are obligated to make sure the executive branch is only exercising the authority it’s actually been given.”