The Supreme Court Decision on the EPA is A Win For Constitution and the Free Market
by Helen Raleigh
Last week, the Supreme Court ruled to limit the Environmental Protection Agency’s powers to curb greenhouse-gas emissions from power plants on the ground that the agency has exceeded authorities granted by the U.S. Congress. The ruling is a win for the Constitution and the free market.
At issue was the Obama administration’s Clean Power Plan (CPP), which was part of the administration’s climate change initiative. The CPP “compels states to overhaul their electricity sectors to meet emissions mandates unilaterally set by the EPA.” If it means “coal-fired power plants to shut down or reduce operations, consumers and businesses to use less electricity and pay more for it,” so be it. The CPP’s objective was to coerce “the transfer of power generating capacity from existing sources to wind and solar,” regardless of costs. The EPA claimed a rarely used statute in the Clean Air Act had granted the agency the broad authority.
The implementation of the CPP would have an enormous economic cost. The EPA’s own estimate showed that the CPP would “entail billions of dollars in compliance costs (to be paid in the form of higher energy prices), require the retirement of dozens of coal-fired plants, and eliminate tens of thousands of jobs across various sectors.” The Energy Information Administration projected that the CPP would cause retail electricity prices to remain persistently 10% higher in many States, and would reduce GDP by at least a trillion 2009 dollars by 2040.”
When the CPP was announced, energy-related businesses and many Republican-led states challenged its legality. In his testimony to the House Energy and Commerce Committee in 2015, Harvard Professor Laurence Tribe stated that the “EPA lacks the statutory and constitutional authority to adopt its plan.” Furthermore, he argued that the EPA’s attempt to usurper state power “raises serious questions under the separation of powers, Article I, and Article III, because EPA is attempting to exercise lawmaking power that belongs to Congress and judicial power that belongs to the federal courts.”
It seemed the Supreme Court listened. In 2016, the Court halted the CPP’s implementation without addressing the plan’s legality. In 2019, the Trump administration replaced the CPP with industry-friendly new rules. But in January 2021, a federal appeals court in the District of Columbia struck down his administration’s replacement rule, which would have allowed the incoming Biden administration to reenact the CPP.
Thankfully, the Supreme Court ruling on this case put a definite stop to it. The Court’s opinion points out that the EPA’s interpretation of the Clean Air Act was problematic. For the past 50 years, the Clean Air Act has only granted EPA authority to regulate sources of air pollution of individual power plants that endanger “public health or welfare.” By the EPA’s own admission, it had no expertise regarding electricity transmission, distribution, and storage. Yet under the CPP, the agency claimed it had sweeping power to regulate all these areas because the vague language in “a long-extant, but rarely used statute” in the Clean Air Act gives the agency “implied” or inherent” transformative power.
The Supreme Court said no so fast because it “doubts that Congress ever intended to delegate . . . decision[s] of such economic and political significance,” i.e., how much coal-based generation there should be over the coming decades, to any administrative agency. In his concurring opinion, Justice Neil Gorsuch affirmed that our Constitution authorizes only the U.S. Congress to pass legislation, and “Congress means for its laws to operate in congruence with the Constitution rather than test its bounds.” If the Executive Branch begins to exercise legislative power, Gorsuch warned, future legislation “would risk becoming nothing more than the will of the current President, or, worse yet, the will of unelected officials barely responsive to him.”
Besides the Constitutionality of the EPA’s action, the Court also noted that some of the EPA proposed to do under the CPP were directly contradictory to what the U.S. Congress wanted. For example, the EPA was going to enact a cap-and-trade for carbon program, which Congress had already considered and rejected numerous times.
Additionally, some of the CPP’s requirements contradict the CCP’s stated goal. For instance, the EPA’s emissions limit under the CCP for existing power plants was “actually stricter than the cap imposed by the simultaneously published standards for new plants.” Why would the EPA want to do that when the objective of the CCP was to “compel the transfer of power generating capacity from existing sources to wind and solar?”
Ultimately, the Supreme Court ruled that the EPA didn’t have such expansive authority to impose the CPP because “a decision of such magnitude and consequence rests with Congress itself.” The ruling is a welcomed move to rein the seemingly out of control of the administrative states, with government agencies expanding their authorities and making major policy decisions without Congress’s explicit approval. One recent example was how the Centers for Disease Control and Prevention (CDC) went beyond its authority to impose a nationwide eviction moratorium during the pandemic.
Ironically, Senate Majority Leader Chuck Schumer (D, NY) and many Democrats denounced the Supreme Court’s decision. They often warn Americans that our democracy is in danger. Yet, they are angry over a ruling that strengthens our democracy by returning the power to the people through their elected officials and re-affirming the separation of power.
If the left genuinely cares about the environment, they’d better revisit United Nations’ Emissions Gap Report 2020, which was done before the pandemic, and the UN is not a known right-wing source. The report showed that United States’ overall Greenhouse Gas (GHG) emissions “have been in decline (0.4 percent per year)” over the last decade. What’s especially noticeable is that GHG emissions in the United States continued to go down even after the Trump administration withdrew from the Paris Accord. The continued reduction came when the United States was experiencing a booming economy.
The UN report demonstrated that the United States is on an excellent trajectory to address climate-related issues and has made consistent and meaningful progress. We do not have to sacrifice our economy and the jobs of American workers. The lower GHG emissions in the United States resulted from technology innovations, including clean coal technology, fracking, and the broader usage of natural gas. When left alone to make business decisions, the creativity and entrepreneurs spirits have done more to better our environment than all the climate legislation combined.
Ignoring these facts, President Biden has shown he is more than willing to trade the American economy and jobs for unrealistic climate goals. Fortunately, the latest Supreme Court ruling will make it harder for him to impose his climate agenda unilaterally through government agencies’ expansive powers. He will have to work with the U.S. Congress for any new climate legislation, to “any new laws would enjoy wide social acceptance, profit from input by an array of different perspectives during their consideration” (Justice Gorsuch). Therefore, the Supreme court ruling on the EPA is an unmistakable win for the U.S. Constitution and the free market.
Helen Raleigh, CFA, CDI.D, owner of Red Meadow Advisors, LLC and nationally recognized writer and speaker. You can follow her Twitter:@HRaleighspeaks.