If the federal government wants to restructure an entire sector of the economy, it needs explicit authority from Congress, the Supreme Court held Thursday. Its ruling in EPA v. West Virginia will save consumers billions of dollars in energy costs. More importantly, it takes power away from unelected bureaucrats and returns it to the people’s elected leaders.
A number of states with large coal economies had challenged an Obama-era regulation from the Environmental Protection Agency that essentially capped the carbon emissions that could be emitted by existing coal power plants. The Obama EPA regulation came after Congress had specifically debated and rejected an economy-wide cap-and-trade policy in 2010.
After winning reelection in 2012, however, President Barack Obama famously told his Cabinet, “I’ve got a pen, and I’ve got a phone,” meaning he would use his pen to sign executive actions bypassing Congress wherever possible. The EPA’s subsequent 2015 Clean Power Plan was part of Obama’s “pen and phone” strategy.
For decades, the EPA had regulated coal power plants through Section 111 of the 1970 Clean Air Act that empowered the EPA to identify a “best system of emission reduction” and then force existing power plants to meet that standard. Importantly, the “best system of emission reduction” must be “adequately demonstrated,” meaning the EPA couldn’t force a “best system” that was deliberately impossible as to put them all out of operation.
But this is exactly what Obama’s Clean Power Plan tried to do. Instead of setting a best-practice standard for coal plants to meet, it set a cap on carbon emissions and said that once a plant reached that cap, it either had to stop producing electricity, invest in a clean power plant, or buy emissions allowances. Instead of making sure individual coal plants were being run as cleanly as possible, Obama was trying to shut them all down entirely. The Obama EPA was essentially trying to repurpose the 1970 Clean Air Act to create the very industry-wide cap-and-trade system that Congress had specifically rejected five years earlier.
Writing for the majority, Chief Justice John Roberts noted when the regulation in question is a “major policy decision,” courts are to presume that Congress intends to make those decisions itself, not to delegate them to federal agencies. When a federal agency is using an old regulation to assert a brand new power, as Obama’s EPA was doing here, there must be “clear congressional authorization” for that new power in the existing statute. In this case, nothing in the 1970 Clean Air Act can be read as intended to give the EPA the authority to set up a nationwide cap-and-trade system for the entire energy sector.
This principle, known as the “major questions doctrine,” has provided a huge win for democratic governance. It will undoubtedly be used against presidents from both parties who seek to increase their own power unjustly. For decades now, as Congress has become more polarized and new consequential legislation has become rarer, presidents from both parties have increasingly turned to federal agencies to devise creative interpretations of existing statutes. This is a dangerously autocratic road to go down.
The ruling in EPA v. West Virginia is a much-welcome turn back toward a federal government that is accountable to its democratically elected legislative branch.
