The U.S. Supreme Court handed down a highly anticipated opinion on Thursday that curbed the U.S. Environmental Protection Agency (EPA)’s power to regulate fossil fuels.
The decision in West Virginia v. Environmental Protection Agency is expected to prove consequential for both U.S. and global ambitions to reduce carbon emissions.
In a 6-3 vote, siding with Republican-led state and coal companies, a majority of the court’s justices held that the EPA lacks broad authority, absent explicit authority from Congress, to cap fossil fuel emissions from the country’s existing power plants.
"There is little reason to think Congress assigned such decisions to the Agency," Chief Justice Roberts wrote in the majority opinion, later adding: "We also find it 'highly unlikely that Congress would leave' to 'agency discretion' the decision of how much coal-based generation there should be over the coming decades." Roberts was joined by justices Thomas, Alito, Gorsuch, Kavanaugh, and Barrett.
The court’s holding is a victory for the state of West Virginia, the country’s second-largest coal-producing state, which sued the EPA along with 17 other states that joined the litigation — Alabama, Alaska, Arkansas, Georgia, Indiana, Kansas, Louisiana, Missouri, Montana, Nebraska, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Utah, and Wyoming, and Mississippi Governor Tate Reeves.
Georgetown environmental law professor William W. Buzbee told Yahoo Finance Live that the high court’s ruling, despite narrowing the EPA’s authority, didn’t take away the EPA’s general power to regulate climate change and left in place flexibility for polluters and states to figure out how to comply with environmental law.
“Generally, EPA is going to have to look at the best thing that plants are doing on their sites,” he said, explaining that the court rejected the Obama-era rule that required plants to use the most cutting edge technology to reduce carbon emissions.“But with technological progress that remains possible.”
The ruling is in part a preemptive instruction for the EPA because the agency currently lacks rules that specifically regulate power plants.
The administrations of Barack Obama and Donald Trump expanded and contracted the EPA's authority, respectively. Under the Obama-era Clean Power Plan, energy producers were required to shift away from fossil fuels to more sustainable sources such as wind and power. Those rules were relaxed under the Trump-era Affordable Clean Energy Rule, which an appellate court vacated, finding its requirements "arbitrary and capricious."
The new decision is expected to frustrate the Biden administration's goal to slash U.S. greenhouse gas emissions up to 52% by 2030 and decarbonize the country’s electric grid by 2035. Behind China, the U.S. is the world’s second-largest contributor to carbon emissions.
"Some coal interests and coal states had hoped the court would preclude flexible, cost-effective compliance strategies, because those tend to hurt things like coal plants, and the court does not do that," Buzbee said. "It does reduce the likelihood that the federal government will be pushing things in a protective direction."
Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on Twitter @alexiskweed.