In the News

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.

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."

Observers had mixed views on how the ruling would affect proposed changes to company disclosure statements about climate-related risks at the SEC, or FERC's proposal for how to assess the emissions of individual interstate natural gas projects before they are approved for construction. The disclosure rule is designed to be a proxy for the financial risk facing companies, including from potential environmental regulation, and does not force companies to reduce their emissions, according to recent public comments filed by the Institute for Policy Integrity.

“Until recently, the major questions doctrine was little-used, and it remains poorly defined,” Dena Adler said in an email. The doctrine “remains the exception, not the norm. However, if it is applied more expansively by lower courts that could be problematic because Congress has legislated for decades with an expectation that it can broadly authorize agencies to use their expertise to address problems.”

"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,” said Richard Revesz. “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."

Despite the US Supreme Court's ruling against the EPA, the agency can still stimulate power sector CO2 abatement in more creative ways. Dena Adler, a research scholar at the New York University School of Law, said, “[The EPA] can consider how to make heat rate improvements more ambitious and look toward what is possible with other techniques such as co-firing and carbon capture and sequestration."

The "generation shifting" approach, which the Supreme Court said the EPA did not have, is "environmentally effective, economically efficient, and supported by power companies", said Dena Adler, a research scholar at the Institute for Policy Integrity at New York University's School of Law. "While this is an unwelcome and unnecessary setback for addressing the urgent climate crisis, EPA still retains the authority, and an obligation, to limit greenhouse gas emissions, including from the power sector," she told China Daily.

The "major questions" doctrine is an attempt to rein in what the court sees as regulatory overreach. The problem is the court has yet to define exactly what counts as a major question, said Richard Revesz, an environmental professor at New York University Law School. "They presented the doctrine in a kind of amorphous and unbounded way," he said. "And we just don't know what this means for the next EPA regulation or the next regulation by any other agency."

Following the West Virginia v. EPA ruling last Thursday, the agency “still has a number of pathways to do its job to protect public health and the environment, including by limiting greenhouse gas emissions from power plants,” Dena Adler, a research scholar at New York University’s Institute for Policy Integrity, told The Hill in an email. But she and other sources agreed there are important limitations now for the EPA that weren’t there before. The ruling specifically applies to the EPA’s 2015 Clean Power Plan, which had a goal of so-called generation-shifting, or accelerating the shift from coal-fired power to renewable energy and natural gas.“That’s a significant constraint, because it was the EPA’s first choice for a reason,” said Jack Lienke, regulatory policy director at the Institute for Policy Integrity. “It reflects how the power grid actually operates and the fact that electricity is fungible.”