Justices Uphold Emission Limits on Big Industry

Source: By ADAM LIPTAK, New York Times • Posted: Tuesday, June 24, 2014

A coal-fired power plant in Ghent, Ky. CreditLuke Sharrett for The New York Times

WASHINGTON — In a big win for environmentalists, the Supreme Court on Monday effectively endorsed the Obama administration’s efforts to regulate greenhouse gas emissions from sources like power plants, even as it criticized what it called the administration’s overreaching.

The decision is one in a recent string of rulings upholding the Environmental Protection Agency’s authority to issue Clean Air Act regulations to curb climate change, and the agency celebrated the decision.

But the combative tone of Monday’s ruling, along with its rejection of one of the agency’s principal rationales for the regulations under review, suggests that the road ahead may be rocky for other initiatives meant to reduce carbon emissions.

The decision, said Richard J. Lazarus, a law professor at Harvard, “gave the agency a tongue-lashing and suggested the potential for some significant limitations on how the agency chooses to exercise its authority in the future.”

The Supreme Court on Monday endorsed the Obama administration’s efforts to regulate greenhouse gas emissions from sources such as power plants. CreditStephen Crowley/The New York Times

In carving out the small emitters, the court effectively agreed with the agency, which saw such broad regulations as an unwieldy nightmare.

“E.P.A. is getting almost everything it wanted in this case,” Justice Antonin Scalia said in summarizing the decision. “It sought to regulate sources it said were responsible for 86 percent of all the greenhouse gases emitted from stationary sources nationwide. Under our holdings, E.P.A. will be able to regulate sources responsible for 83 percent of those emissions.”

(“Stationary sources” are buildings like factories and power plants; the agency also regulates tailpipe emissions from cars and trucks.)

Chief Justice John G. Roberts Jr. and Justices Anthony M. Kennedy, Ruth Bader Ginsburg, Stephen G. Breyer, Sonia Sotomayor and Elena Kagan joined that part of the decision.

The agency expressed satisfaction with the ruling. “The Supreme Court’s decision is a win for our efforts to reduce carbon pollution because it allows E.P.A., states and other permitting authorities to continue to require carbon pollution limits in permits for the largest pollution sources,” the agency said in a statement.

Another part of Monday’s decision rejected the agency’s primary rationale for the regulations. The agency had contended that it would interpret the Clean Air Act to require the regulation of far fewer stationary sources of pollution than the law seemed to require.

“An agency has no power to ‘tailor’ legislation to bureaucratic policy goals by rewriting unambiguous statutory terms,” Justice Scalia wrote. Chief Justice Roberts and Justices Kennedy, Clarence Thomas and Samuel A. Alito Jr. joined that part of the decision, which was decided by a 5-to-4 vote.

The solution was not to require broader regulation, Justice Scalia said. Rather, he said, the practical problems identified by the agency were reason to think it was misreading the statute. “It would be patently unreasonable — not to say outrageous — for E.P.A. to insist on seizing expansive power that it admits the statute is not designed to grant,” Justice Scalia wrote

The National Federation of Independent Business, a plaintiff in the case, welcomed what it said was the Supreme Court’s refusal to allow the agency to rewrite the statute.

“If this rule had been allowed to stand, small-business owners such as ranchers, farmers, manufacturers, restaurant owners and others would have seen more paperwork, more oversight and fines,” the group said in a statement.

Supporters of President Obama’s climate change agenda said the ruling did not affect the administration’s recently proposed regulations to curb greenhouse gas emissions from coal-fired power plants.

“The E.P.A. has just proposed standards to reduce carbon pollution from power plants, and that critical work will move ahead to protect Americans from the worst impacts of climate change,” said David Doniger, director of the clean air and climate change program with the Natural Resources Defense Council, an advocacy group.

But legal experts said that Monday’s decision also included a warning that the court’s view of the E.P.A.’s regulatory authority has its limits.

“We are not willing to stand on the dock and wave goodbye as E.P.A. embarks on this multiyear voyage of discovery,” Justice Scalia wrote.

That statement was “a warning shot,” said Jody Freeman, a law professor at Harvard. “It suggests that the courts will look skeptically at assertions of authority that are very new and very far-reaching.”

Still, the agency has been on a winning streak. In April, the Supreme Court upheld its authority to regulate smog from coal plants that drifts across state lines, a ruling that Professor Lazarus called “one of E.P.A.’s biggest wins ever in the court.” After Monday’s ruling, he said, “E.P.A. walked away standing, but not quite as tall as before.”

The regulations challenged in Monday’s decision built on the Supreme Court’s 5-to-4 decision in 2007 in Massachusetts v. Environmental Protection Agency, which required the agency to regulate emissions of greenhouse gases from new motor vehicles if it found that they endangered public health or welfare.

The agency said its regulation of tailpipe emissions also required regulation of emissions from stationary sources under two permitting programs. While acknowledging that the relevant provisions of the Clean Air Act fit such emissions imperfectly, the agency said the law nonetheless compelled it to require permits.

The Clean Air Act says those programs cover all sources that can annually emit 100 tons or 250 tons of the relevant pollutant, a threshold that works tolerably well for conventional air pollutants like lead and carbon monoxide. But that threshold, applied to greenhouse gases, which are emitted in far greater amounts, would require the regulation of millions of sources of pollution.

Applying the law as written would increase the number of covered sources under one program to more than 80,000, from just hundreds, reaching commercial and residential sources and subjecting them to expenses averaging almost $60,000, according to a decision under review from the United States Court of Appeals for the District of Columbia Circuit.

A second program would reach six million sources, subjecting them to expenses of more than $20,000 each. The cost of administering the programs would rise to $21 billion from $62 million, and the new covered sources, Justice Scalia wrote, would face costs of $147 billion.

The agency said Congress could not have intended such an “absurd result.” Its solution was to raise the statutory emissions threshold to 75,000 to 100,000 tons per year, thus reaching far fewer facilities. This was, it said, a permissible exercise of discretion and one subject to tightening over time.

Justice Scalia, writing for five justices, rejected that approach. “It is hard to imagine a statutory term less ambiguous than the precise numerical thresholds at which the act requires,” he wrote.

Endorsing the agency’s approach, he added, “would deal a severe blow to the Constitution’s separation of powers.”

Justice Breyer, writing for the court’s four-member liberal wing in a partial dissent on this point, said the agency’s approach was a sensible attempt to apply the purpose of the Clean Air Act.

The dispute had little immediate practical effect, as the other part of Justice Scalia’s opinion, now speaking for seven justices, allowed the agency to get to largely the same place by a different route by sustaining regulation of carbon emissions from sources already subject to regulation for conventional pollutants.

“We are not talking about extending E.P.A. jurisdiction over millions of previously unregulated entities,” Justice Scalia wrote, “but about moderately increasing the demands E.P.A. (or a state permitting authority) can make of entities already subject to its regulation.” But he acknowledged that the two approaches are almost equally effective.

Justice Alito, joined by Justice Thomas, dissented from that part of the decision, Utility Air Regulatory Group v. Environmental Protection Agency, No. 12-1146.