Climate law and policy experts like myself have been anxiously awaiting the Supreme Court’s impending decision in a major climate change case challenging the U.S. EPA’s regulations (NOT the regulations that EPA proposed this month, but a different set of regulations that set the stage for the new regulations affecting existing power plants). The case, Utility Air Regulatory Group v. Environmental Protection Agency (UARG v. EPA), resulted in a big victory for the EPA at the D.C. Circuit Court of Appeals in 2012. For some, it is the most important energy and environmental law case now before the Supreme Court.
Unfortunately, the Court has decided to delay its decision until I’m in Alaska and unable to file a blog comment on it—so, in anticipation of a decision before I return, I want to suggest that the headlines stating who “won” the case will be less important than why they won. In fact, EPA may lose parts of the case but gain significant authority to support its approach to climate change regulation under the Clean Air Act. Losing the battle doesn’t mean losing the war. It is therefore important to know how to read the underlying rationale for the case.
The first thing to know is that the EPA developed the regulations based upon an earlier Supreme Court decision in 2007 finding that carbon dioxide is an “air pollutant” under the Clean Air Act. Therefore, unless Congress changes the statute, it is subject to EPA regulation. The second thing to know is that the EPA has some discretion for developing regulations to implement the statute—and a court will generally uphold those regulations as long as they are not contrary to clear Congressional intent and are “reasonable” and “permissible.” Finally, you need to know that the arguments advanced by the challengers to EPA’s rulemaking may actually help the EPA in its new proposed rulemaking if they succeed. That is because, as Harvard Law’s eminent scholar Richard Lazarus has stated, “the challengers embraced and repeatedly stressed the applicability of Section 111 [the basis for EPA’s new proposed regulations] to new and existing stationary sources of greenhouse gases, as discussed by Justice Ginsburg’s opinion for the Court in AEP v. Connecticut.” So both the Court and the challengers have strengthened EPA’s case in a future challenge that the EPA has the authority to regulate power plants under the statute.
The EPA regulations now being challenged were developed under a different section of the Clean Air Act, and there is some debate about whether that section was the right section to use and whether or not the EPA followed the specific language of that section of the Act. But, even if EPA loses that battle, it is likely to win the war in the courts over whether or not it can regulate greenhouse gas emissions from stationary sources like power plants. And that means that all aspects of the power sector will be affected—because regulation will increase the costs for high-greenhouse-gas-emitters while making energy efficiency and renewables more competitive. EPA regulation will also make natural gas more competitive, but only if the EPA doesn’t address the methane emissions associated with the full life cycle of natural gas production—because methane is also a potent greenhouse gas.
I’ll have more to say about the Court’s decision once it is issued. Until then, though, you should ask deeper questions than just who won or lost the case—understand the why.