EPA’s New Power Plant Rules Stand on Strong Legal Footing
David Doniger
Natural Resources Defense Council (NRDC)
As the US Supreme Court prepared to rule in West Virginia v. Environmental Protection Agency at this time last year, climate advocates like me were staring into a dark abyss. Many worried that the high court could block any meaningful regulatory action to curb power plants’ carbon pollution. With Congress then stalled on negotiations for clean energy legislation, federal climate action could be stuck.
EPA’s Legal Authority
The foundation of EPA’s legal authority can be found in two prior Supreme Court decisions, Massachusetts v. EPA and American Electric Power v. Connecticut, holding that the Clean Air Act covers the air pollutants that cause climate change.
After those decisions, EPA issued two very different power plant regulations in the Obama and Trump administrations based on opposing interpretations of the key Clean Air Act phrase, which directs EPA to base emission standards on the “best system of emission reduction.”
To oversimplify, in the 2015 Clean Power Plan EPA said that the “best system” was not to put control technology on coal and gas plants, but to shift to cleaner solar and wind generators, a move EPA projected would cut overall power sector emissions by nearly a third by 2030.
The Clean Power Plan never took effect, however, because it was stayed by the Supreme Court and then repealed under President Donald Trump. Ironically, market forces led the power sector to meet the plan’s 2030 goal 11 years early even with no rule.
Nonetheless, Trump’s EPA declared that the “best system of emission reduction” allowed EPA to consider only “inside-the-fence” pollution controls. But the Trump administration’s rules did virtually nothing to curb power plants’ carbon pollution.
The Major Questions Doctrine
Even though neither EPA rule had any real-world impact, the Supreme Court took the occasion in West Virginia v. EPA to announce a new legal doctrine – the “major questions doctrine”—and to use it to declare that the Clean Power Plan exceeded EPA’s authority.
The major questions doctrine is undoubtedly a significant new barrier to our government’s capacity to meet the health, safety, and other challenges of our modern economy.
Accordingly, many initial observers took West Virginia as severely curtailing EPA’s ability to cut carbon emissions from power plants.
In fact, Chief Justice John Roberts’ opinion gave EPA a path forward. Roberts contrasted EPA’s generation-shifting approach with the agency’s “traditional” practice of basing standards on pollution controls that make plants “operate more cleanly” and ensure “the efficient pollution performance of each regulated source.”
In other words, technologies that can be installed at a plant—like the scrubbers used to pull sulfur dioxide out of smokestacks—can be considered the “best system of emission reduction.”
For carbon dioxide, the analog to a sulfur scrubber is carbon capture and sequestration. Equipment installed at the plant removes carbon dioxide from the smokestack. It is then sent off site and permanently sequestered deep underground. While community safeguards are needed to ensure the plants, pipelines, and storage sites don’t leak, each part of this technology is well demonstrated and has been used for years in a variety of industries.
IRA Follows Roberts’ Path Forward
Six weeks after West Virginia, Congress enacted the Inflation Reduction Act, which provides a clear and up-to-date statement of congressional intent for EPA to set new standards to cut carbon pollution, reinforcing the pathway Roberts laid out. The new clean energy law does three things to reinforce and extend the Supreme Court’s ruling.
First, it makes the largest ever federal investments to reduce the cost of a wide range of clean energy and low-carbon resources, including carbon capture and sequestration. This enables EPA to set more ambitious clean air rules, because the incentives cut the costs of meeting those rules.
Second, it reinforced EPA’s regulatory authority. It added new sections to the Clean Air Act expressly adopting the Supreme Court’s holdings that carbon dioxide and other greenhouse gases are air pollutants. Third, the new law also added a provision directing EPA to issue new carbon pollution standards for power plants taking the new tax incentives into account.
EPA Should Adopt Strong Standards
My organization, the Natural Resources Defense Council, is pressing EPA for strong standards based on the deep reductions achievable through carbon capture and storage. This is currently the “best system of emission reduction,” and it can cut coal and gas power plant carbon emissions by 90 percent.
These standards can help meet the urgency of the climate crisis. If EPA follows through, the US can meet President Joe Biden’s target of cutting power plant carbon pollution 80 percent from the peak levels of 2005.
Though based on carbon capture, these new standards would not dictate how states and plant operators may choose to comply. Some plant operators will likely choose to install and operate carbon capture and storage. And reflecting current trends in the industry toward clean energy, others may choose to replace those plants with alternative sources of power generation. Nothing in the Clean Air Act, the IRA, or the Supreme Court decisions keeps states and plant operators from adopting different compliance strategies.
Sadly—but inevitably—some states or fossil fuel interests will challenge EPA’s next power plant rules, even if they are structured as Roberts described in West Virginia and as Congress anticipated in the Inflation Reduction Act.
But the new law, with its clear and fresh statements of congressional intent, will make those challenges much more difficult. In short, EPA now has a solid legal foundation for setting the pollution limits necessary to address the climate crisis.
This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Author Information
David Doniger is the senior attorney and strategic director for the Natural Resources Defense Council’s Climate and Clean Energy Program. He joined NRDC in 1978, served in the Clinton administration, and rejoined NRDC in 2001.