US Supreme Court’s West Virginia v. EPA decision: what does it mean for US climate regulation? And what comes next?

Digital panel discussion with Carrie Jenks, Executive Director of the Environmental & Energy Law Program at Harvard Law School, Stephanie Grumet, Global Counsel Adviser and a former EPA regulator, and Ben Bassett, Global Counsel Associate, to discuss ways in which the Court’s ruling may determine the contours and magnitude of EPA’s forthcoming regulations on coal and gas-fired power plants as well as other regulations under consideration for the power sector.

It was a lively and informative discussion, with some key conclusions:

• The Supreme Court’s ruling will limit the EPA’s efforts to regulate emissions from the US power sector that go beyond the facility fenceline. The Court’s decision found that the EPA’s efforts to enact a generation-shifting regime via the Clean Power Plan, which would require plants to seek emission reductions beyond their physical fencelines, required express Congressional authority which under existing statutes has not yet been granted. The EPA is preparing to issue new power sector regulations in 2023, but this ruling now hoists limitations to how far the EPA can go.
• The Supreme Court’s first-time invocation of the “major questions” doctrine is the central focus of this opinion. For the first time in a majority opinion, the Court formally invoked the “major questions” doctrine, which stipulates that an agency must have express congressional authority to promulgate rules that will have major economic and political significance. With a solidly conservative majority on the Supreme Court, environmental groups are concerned how this doctrine will be utilised to limit any future rulings, such as the SEC’s proposed climate disclosure rule.
• The EPA is still planning a “regulatory blitz” in 2023 despite the Supreme Court’s ruling in West Virginia v. EPA. The EPA has outlined several proposed rulemakings the agency is looking to unveil in 2023, the cumulative result of which could lead to substantial carbon reductions in the US power sector. Although the agency will be constrained to regulations that remain within a facility fenceline.
• Going forward, in reaction to this Supreme Court opinion, the EPA should focus their next rule on building upon the momentum that the private sector is already creating. Industry and businesses are already starting to change their emissions standards, with companies transitioning away from oil and gas and investing in renewable energy. The EPA should build upon this momentum and engage with the power sector to build on the record that already exists.