Unelected Bureaucrats Should Not Take Major Questions Away from the People, the Supreme Court Tells the EPA

Yesterday the Supreme Court in West Virginia v. EPA appropriately rejected the Environmental Protection Agency’s sweeping claim that it could do essentially whatever it wants to reduce or eliminate carbon from any part of the American economy through draconian emission reduction mandates.

At issue was the EPA’s extravagant reading of the Clean Air Act. The agency had for decades interpreted that statute, which was enacted in 1970, as allowing it to set performance standards for power plants to operate more cleanly. But in 2015, the Obama EPA claimed a far broader exercise of power under a new Clean Power Plan (CPP), imposing emission reduction mandates that required existing coal-fired plants to reduce their own production of electricity or to subsidize generation by natural gas, wind, or solar sources.

These emissions caps could not be met by existing coal plants given limitations on technology, and they ultimately imposed stricter mandates on such plants, relative to new plants with new technology. Additionally, states were expected to develop plans under the CPP that met the EPA’s emissions targets. The EPA was effectively compelling coal plants to shift production, subsidizing their competitors, in order to accelerate the nation’s movement toward a zero-carbon electricity sector while the agency was hamstringing state governments in the process. The EPA administrator at the time, Gina McCarthy, even admitted that the rule was “not about pollution control” as much as it was “an investment opportunity”—specifically, “investments in renewables and clean energy.”

As Chief Justice John Roberts wrote for the Court, Congress never gave the EPA authority to promulgate a generation-shifting regime of emissions caps. In fact, Congress had debated and failed to pass a national system of energy regulation along such lines on numerous occasions, long after the environmental risks posed by greenhouse gas emissions were widely known.

The Clean Air Act authorizes measures to determine the best existing technologies and methods for setting an achievable emission limitation at individual facilities, not to shift to alternative power sources or to similarly transform the power industry. The EPA invoked for its power grab an obscure section of the statute that provided for an agency determination of the “best system of emission reduction,” followed by quantifying “the degree of emission limitation achievable” if that best system were applied to the covered source. Never had this language been invoked to justify any regulations of this scope. Roberts maintained that the EPA cannot claim this “newfound power in the vague” and “ancillary” language of a “rarely . . . used” part of the Clean Air Act that “was designed to function as a gap filler.”

In rejecting the regulatory license that the agency was asserting from that language, the Court invoked the major questions doctrine. That is the notion that an agency needs “clear congressional authorization” when the “history and the breadth” and “economic and political significance” of the power it claims provide a “reason to hesitate before concluding that Congress” intended that scope of authority.

This doctrine draws support from several prior opinions of the Supreme Court, but it was refreshing to witness the Court giving needed guidance to lower courts applying the concept. Going forward, lower courts should have “skepticism” toward major regulatory schemes that assert “extravagant statutory power over the national economy” but do not have clear statutory authorization. And it is a warning that when enacting regulations, agencies should not be seeking “to hide ‘elephants in mouseholes’”—Justice Antonin Scalia’s memorable phrase from a 2001 opinion for the Court that Justice Neil Gorsuch cited in a concurring opinion.

The major questions doctrine is grounded in sound textualism and the separation of powers. This case also reinforces federalism, making it broadly protective of the structural Constitution. By refusing to indulge the EPA’s expansive reading of the Clean Air Act, the Court saved states from being subjected to damaging energy mandates. Now West Virginia, one of many states that challenged the agency in court, will not be forced into a California-type energy grid.

This decision is widely being reported as a climate change case and a defeat for President Biden’s zero-carbon agenda. Justice Elena Kagan, joined by the two other members of the Court’s liberal bloc, Stephen Breyer and Sonia Sotomayor, contributed to this impression with a strident, characteristically policy-laden dissent complaining that the Court “does not have a clue about how to address climate change.”

But the Court’s decision, which represents a six-justice majority, did not substantively weigh in on what Congress is empowered to do on this issue. It leaves this question to the people’s representatives and chides an agency that overstepped its bounds. By reining in the EPA, the Court has struck a blow for representative democracy and the rule of law, making it clear that unelected, unaccountable bureaucrats are no substitute for elected officials setting policy on major issues.