Supreme Court Questions Scope of EPA’s Climate-Change Powers

(Bloomberg) -- U.S. Supreme Court justices debated putting new limits on the Environmental Protection Agency’s power to tackle greenhouse-gas emissions, as they considered a case that threatens to undercut President Joe Biden’s climate agenda.

Hearing two hours of arguments in Washington, the justices gave a mixed reception to Republican-led states and coal companies seeking to bar the EPA from issuing a sweeping plan to reduce carbon emissions from power plants. The Biden administration is defending the agency’s authority, with backing from power companies and environmental groups.

Justice Samuel Alito, one of the court’s conservatives, questioned the administration’s assertion that it can broadly push electricity generation away from high-emission sources, as long as it doesn’t impose unreasonable costs or threaten grid reliability.

“I really don’t see what the concrete limitations are in any of what you said,” he told U.S. Solicitor General Elizabeth Prelogar. “So long as the costs are not absolutely crushing for the society, I don’t know why EPA can’t go even a lot further.”

But another conservative, Justice Clarence Thomas, indicated he wasn’t convinced by the distinction the EPA’s opponents sought to make between permissible and impermissible regulation. The states say the agency can regulate “inside the fence-line” of power plants but can’t try to restructure the entire industry.

“I don’t know how you can draw such clean distinctions,” Thomas said.

The case could jeopardize the country’s ability to meet Biden’s pledge to at least halve greenhouse gas emissions by the end of the decade. It’s impossible to hit that target without regulations to stifle greenhouse gases from oil wells, automobiles and power plants, as well as tax incentives designed to spur clean energy that can edge out fossil fuels, according to several analyses. 

The argument came hours after the release of a United Nations panel report warning that the world has a “brief and rapidly closing window of opportunity” to slow the pace of global warming.

The companies and states are asking the court to preemptively bar anything resembling former President Barack Obama’s Clean Power Plan, which pushed states to shift electricity generation from coal-burning plants toward lower-emitting options, such as renewable power. The Supreme Court blocked the Clean Power Plan in 2016, and it never took effect.

Exelon Corp., Consolidated Edison Inc. and National Grid USA are among the power companies joining the Biden administration in defending the EPA’s authority. The challengers include a Nacco Industries Inc. unit and Westmoreland Mining Holdings LLC.

The case centers on a Clean Air Act provision requiring the EPA to identify the “best system of emission reduction” for existing pollution sources. The law then tasks states to implement plans that reflect those findings.  

The dispute could produce a defining moment for the movement to rein in the so-called administrative state. Legal conservatives say unaccountable regulators are usurping a role the Constitution entrusts to Congress.

(Updates with questions from Alito, Thomas starting in third paragraph.)

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