U.S. Supreme Court limits federal power to curb carbon emissions

© Reuters. FILE PHOTO: A person walks past the United States Supreme Court Building in Washington, D.C., U.S., May 13, 2021. REUTERS/Andrew Kelly/File Photo

By Lawrence Hurley

WASHINGTON (Reuters) -The U.S. Supreme Court on Thursday imposed limits on the federal government's authority to issue sweeping regulations to reduce carbon emissions from power plants in a ruling that will undermine President Joe Biden's plans to tackle climate change.

The court's 6-3 ruling restricted the Environmental Protection Agency's (EPA) authority to regulate greenhouse gas emissions from existing coal- and gas-fired power plants under the landmark Clean Air Act anti-pollution law. Biden's administration is currently working on new regulations.

The court's six conservatives were in the majority in the decision authored by Chief Justice John Roberts, with the three liberals dissenting.

The ruling is likely to have implications beyond the EPA as it raises new legal questions about any big decisions made by federal agencies. The Supreme Court's conservative majority has signaled ongoing skepticism toward expansive federal regulatory authority.

The justices overturned a 2021 decision by the U.S. Court of Appeals for the District of Columbia Circuit that had struck down Republican former President Donald Trump's Affordable Clean Energy rule. That regulation, which the Biden administration has said it has no intention to retain, would impose limits on a Clean Air Act provision called Section 111 that provides the EPA authority to regulate emissions from existing power plants.

The ruling was based on what is called the "major questions" legal doctrine that requires explicit congressional authorization for action on issues of broad importance and societal impact. The justices in January embraced that theory when it blocked the Biden administration's vaccine-or-test policy for larger businesses, a key element of its plan to combat the COVID-19 pandemic.

The decision will constrain the EPA's ability to issue any regulations on power plants that push for an ambitious a national shift in energy policy toward renewable sources. As such, the ruling will hamstring the Biden administration's ability to curb the power sector's emissions - representing about a quarter of U.S. greenhouse gases.

Roberts wrote that while capping carbon emissions at a level that would force a nationwide energy transition might be a sensible policy solution "it is not plausible that Congress gave EPA the authority to adopt on its own such a regulatory scheme."

The case was centered around Trump's Affordable Clean Energy rule intended to impose limits on a Clean Air Act provision called Section 111 that provides the EPA authority to regulate emissions from existing power plants.

A group of Republican-led U.S. states led by major coal producer West Virginia asked the justices to limit the EPA's ability to regulate greenhouse gas emissions from existing power plants under the Clean Air Act. Other challengers included coal companies and coal-friendly industry groups. Coal is among the most greenhouse gas-intensive fuels.

Democratic-led states and major power companies including Consolidated Edison Inc (NYSE:ED), Exelon Corp (NASDAQ:EXC) and PG&E (NYSE:PCG) Corp sided with President Joe Biden's administration, as did the Edison Electric Institute, an investor-owned utility trade group.

The Biden administration wants the U.S. power sector decarbonized by 2035. The United States, behind only China in greenhouse gas emissions, is a pivotal player in efforts to combat climate change on a global basis.

The United Nations on Feb. 28, the same day as the Supreme Court's oral arguments in the case, released a 3,675-page report urging global action to combat climate change.

The rule proposed by Trump, a supporter of the U.S. coal industry who also questioned climate change science, was meant to supplant Democratic former President Barack Obama's Clean Power Plan mandating major reductions in carbon emissions from the power industry.

The Supreme Court blocked Clean Power Plan implementation in 2016 without ruling on its lawfulness.

The decision was issued on the final day of rulings for the court's current nine-month term.