By Madeline Urbish
Yesterday, the Supreme Court ruled against the Environmental Protection Agency (EPA) and its development of environmental regulations known as the Clean Power Plan. The 5-4 decision in Michigan v. Environmental Protection Agency, 2015 does not strike down the rule, but it does require the EPA to review and rewrite it. The case was brought by several industry groups and 20 states, who claimed the EPA should have taken the cost of implementation into consideration while drafting the rule.
For some background, the Clean Power Plan is a proposed rule from the EPA to cut carbon emissions from existing power plants. The EPA issued this rule under the Clean Air Act, originally passed in 1963 to control air pollution at the national level. The rule would require power plants to cut their pollution that leads to soot and smog by over 25 percent by 2030, and would have the greatest effect on coal plants throughout the country that produce large quantities of carbon.
The major argument against the EPA’s Clean Power Plan is that the agency failed to take the cost of cutting emissions into account while formulating the rule. For the industries that have to make dramatic adjustments, such as coal plants, implementation will come with a serious price tag. States care because they are the ones that have to actually carry out enforcement of the rule. The plaintiffs in the case argue that the EPA did not follow the Clean Air Act’s requirement that regulations be “appropriate and necessary,” when it decided to regulate emissions without completing a cost-benefit analysis.
In response, the EPA argued that the law did not require it to take costs into account during its initial decision to regulate. In the years since issuing the proposed rule, the EPA has estimated the Clean Power Plan will cost industry $9.6 billion to implement, but will reap benefits of $37 billion to $90 billion to the public. The power plant industry came to a very different conclusion, arguing the rule would only achieve $6 million in benefits.
In writing for the majority, Justice Antonin Scalia concluded “It is not rational, never mind ‘appropriate,’ to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits.” Chief Justice John Roberts and Justices Anthony Kennedy, Clarence Thomas, and Samuel Alito signed on to Justice Scalia’s opinion. Justices Sonya Sotomayor, Elena Kagan, Ruth Bader Ginsburg, and Stephen Breyer dissented, with Justice Kagan writing the dissenting opinion.
The interesting part about this ruling is that it simply concerns how and when the EPA needs to consider costs in its rulemaking process on limiting mercury and other toxic emissions, not its authority to limit emissions overall. The ruling essentially poses a temporary delay, since proposed rule will stay on the books while the Court of Appeals for the D.C. Circuit decides how the agency can proceed.
Vickie Patton, general counsel at the Environmental Defense Fund noted, “While today’s decision is a setback, EPA has ample information to swiftly address the court’s concern.”
Since the case only concerns the cost-benefit analysis portion of the rule, the EPA can rewrite the rule again so long as it considers the costs to the industry. In fact, most power plant operations have already complied by either shutting plants down or retrofitting them.
EPA chief Gina McCarthy made this point clear in an appearance on HBO’s “Real Time with Bill Maher,” on Friday when she explained that the rule was issued three years ago. “Most [power plants] are already in compliance, investments have been made, and we’ll catch up.”
McCarthy argued, “the bottom line is that utilities are already headed in the direction of putting more controls on this pollution, whether because of this rule, or to comply with the cross-state pollution rule the Supreme Court already upheld in the Homer case last term, or in anticipation of the carbon rule for power plants.” (The Homer case refers to a case heard by the Supreme Court last year that upheld the EPA’s regulation of air pollution that crosses state lines. See Environmental Protection Agency v. EME Comer City Generation, 2014).
So what’s the take away? This is an issue of process, not substance. The EPA still has the authority to issue and enforce environmental regulations through the Clean Air and Clean Water Acts. And despite the vehement objections by Congress, the Obama Administration will continue to put forth these bold rules, especially because Congress is a dead-end for just about any real policymaking.
The likelihood of this case becoming precedent for challenging every move of the EPA is not strong. The process is certainly important, particularly for those entities that have to do the dirty work of implementation, but this case has little effect on the core of the Clean Power Plan. So long as the Obama Administration is focused on shaping its legacy around these advances in environmental protection and energy policy, it is highly unlikely that Michigan v. EPA will deter the President in his final months in office.
For more information, contact Madeline Urbish at firstname.lastname@example.org.