The U.S. Supreme Court recently concluded its term with a decision that could hamstring the Biden admiration’s effort to further restrict greenhouse-gas (GHG) emissions. In a 6-3 ruling in West Virginia v. EPA, the Court held that an Obama EPA rule exceeded the agency’s authority and is not permitted to regulate emissions system-wide, or “beyond the fence line” of a utility.
The Biden EPA did not directly defend the Obama rule, instead hoping to issue their own more stringent regulations based on legal authority they felt the EPA held. This Supreme Court decision said that the EPA does not have the authority to regulate a utility “outside the fence line” of the facility itself, which would have allowed the EPA to regulate activity from utility users and secondary source pollutants. The ruling in West Virginia v. EPA did not entirely invalidate the EPA’s authority to regulate utilities because the question was not whether GHG emissions are air pollutants, a question the Court has previously settled. Rather, policy experts are reading the ruling as the justices saying that Congress did not give the EPA the authority to broadly regulate multiple sectors with a single regulation. The Biden administration will now need to reevaluate some of its more sweeping regulatory ambitions, and not just in the space of environmental policy.
Experts here in Washington, D.C. are now wondering which other regulations courts could invalidate if a judicial review reveals an agency exceeded its statutory authority – OSHA, SEC, FTC? The coming months will see regulators push the limits and some judges push back. Stay tuned.