In the News

In October, the Supreme Court will start swinging a conservative legal sledge hammer called the “major questions doctrine,” at every government sector that traffics in regulation. “The major questions doctrine didn't exist until fairly recently, but in the last year or so, the Supreme Court has made it a regular part of its anti-regulatory arsenal,” Richard Revesz of the Institute for Policy Integrity at NYU Law School told the Washington Post last week. “As a result, I am sure that enterprising attorneys general for red states will use it to challenge climate regulations, environmental regulations and all kinds of other regulations.”

In the summer 2022 issue of Regulation, Adler writes a review of Reviving Rationality: Saving Cost-Benefit Analysis for the Sake of the Environment and Our Health by Michael A. Livermore and Richard L. Revesz. Reviving Rationality is something of a sequel to their prior book on cost-benefit analysis, Retaking Rationality: How Cost-Benefit Analysis Can Better Protect the Environment and Our Health. In the first book (which he also reviewed), Livermore and Revesz made the case for cost-benefit analysis as a tool of progressive government. In Reviving Rationality, they note how the Obama Administration (largely) followed their advice and critique the Trump Administration for abandoning principled cost-benefit analysis in regulatory policy.

One potential consequence, that each panelist feared could happen, would be more rulings based on the Major Questions doctrine. This would be a big change for the Court. On this point, Dena Adler from NYU stated, “Until recently, this interpretive framework was little-used, and it remains poorly defined.”

Dr. Burçin Ünel, the Energy Policy Director at the Institute for Policy Integrity, joined three other panelists to discuss why the current pricing system doesn’t work and explore ways regulators and utilities can reimagine electricity tariff structures to better price DERs and encourage more efficient electricity use.

At the heart of the decision in West Virginia v. EPA lies the “major questions” doctrine: the legal argument that federal agencies may not rule on matters of “great economic and political significance” without direct approval from Congress. Dena Adler, research scholar at New York University’s Institute for Policy Integrity, called the standard for the major questions doctrine “mushy.” “Opponents of regulation will continue to attempt to argue that other regulatory policies now qualify as major questions, and push for that exception to swallow the rule,” Adler said.

Late last month, the Supreme Court ruled that the U.S. Environmental Protection Agency’s Clean Power Plan, a 2015 regulation limiting carbon dioxide emissions from power plants, exceeded the agency’s authority under the Clean Air Act. Where does this decision leave climate policy at EPA? Down but not out. The agency still has meaningful options for decarbonizing the power sector, but it won’t be able to implement them quickly — or without a fight.

A Yale Journal of Regulation article by Justin Gundlach and Michael Livermore on the complementary uses of the social cost of greenhouse gases and marginal abatement costs metrics was featured in the editors' selection, along with an op-ed by Peter Howard and Max Sarinsky explaining why limiting domestic fossil fuel extraction reduces global climate pollution despite substitution effects.

The Supreme Court’s enshrinement in West Virginia v. EPA of the major questions doctrine as a key technique of statutory interpretation is a threat to regulation in general, contends Richard Revesz.

Most Clean Air Act experts say that even if ACE had taken effect, the Biden EPA would have little difficulty in rolling it back and replacing it with a new rule. “The explanation might have looked a little different if the Trump administration had justified the ACE rule in a different way,” said Richard Revesz. “But I don’t think it would have taken any extra time to do it.”

Greenhouse gas emissions are financially relevant to investors because they affect the company's ability to transition to a new economy, and could add compliance costs, Lienke said. “If we know that an increasing number of states and countries are making legally binding requirements," he said, "that is going to have a financial impact on those companies in those jurisdictions that emit a lot."