In a long-awaited decision, the U.S. Supreme Court today curtailed the authority of the Environmental Protection Agency (EPA) to regulate greenhouse gas emissions from existing sources.  

In the 6-3 ruling in West Virginia v. EPA, the Court found that EPA lacked authority to regulate the power sector at the grid level — i.e., achieving emissions reductions by shutting down carbon intensive coal-fired power plants and shifting generation to lower emitting natural gas and renewable facilities.

The ruling does not appear to affect EPA’s authority to prescribe emissions standards at individual sources, such as requiring heat rate improvements at coal-fired units. Specifically, the Court found that: “Congress did not grant EPA in Section 111(d) of the Clean Air Act the authority to devise emissions caps based on the generation shifting approach the Agency took in the Clean Power Plan.”  

The Court’s decision also does not affect EPA’s authority to phase down HFC production and consumption under the American Innovation and Manufacturing (AIM) Act of 2020; this is a separate statute unrelated to the provisions of the Clean Air Act at issue in West Virginia. The AIM Act expressly grants EPA the authority to regulate HFCs: to phase down the production and consumption of listed HFCs, to manage these HFCs and their substitutes, and to facilitate the transition to next generation technologies.  

The majority opinion, drafted by Chief Justice John Roberts, stated that the case was decided on the “major questions doctrine,” which holds that the court does not need to give Chevron deference to federal agencies in matters of major national significance which Congress has not explicitly written into legislation.  

This decision does, however, call into question the Department of Energy’s authority to use the social cost of carbon in its cost-benefit analyses supporting energy efficiency rulemakings.