The U.S. Supreme Court on June 30 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 and could constrain various agencies on other issues.

The court’s 6-3 ruling restricted the EPA’s 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 EPA and White House said that administration lawyers are analyzing the decision and seeking ways to address emissions under existing laws.

“President Biden will not relent in using the authorities that he has under law to protect public health and tackle the climate change crisis,” a White House spokesperson said.

UPDATE:

Back to the Drawing Board: US Supreme Court Upends Biden Climate Agenda

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. Conservative legal activists have long advocated to reduce agency power in what has been dubbed a “war on the administrative state.”

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 appeared to embrace 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 court’s invocation of this doctrine sends a signal that the justices will be a major obstacle to federal agencies seeking to implement broad policies of national importance.

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.

‘Federal Overreach’

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. Other challengers included coal companies and coal-friendly industry groups. Coal is among the most greenhouse-gas intensive fuels.

West Virginia Attorney General Patrick Morrisey called the ruling a “huge victory against federal overreach and the excesses of the administrative state.”

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.”

Writing in dissent, liberal Justice Elena Kagan said the court had chosen to hobble Biden’s climate agenda before the administration has even issued its rule

“The limits the majority now puts on EPA’s authority fly in the face of the statute Congress wrote,” Kagan added. In doing so, the court “deprives EPA of the power needed—and the power granted—to curb the emission of greenhouse gases.”

On the broader scope of the ruling, Kagan said the court has a clear goal: “Prevent agencies from doing important work, even though that is what Congress directed.”

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.

The rule proposed by Trump was meant to supplant Democratic former President Barack Obama’s Clean Power Plan mandating major reductions in carbon emissions from the power industry. The Obama plan had used Section 111 to spur an electric generation shift from coal to cleaner energy sources.

Democratic-led states and major power companies including Consolidated Edison Inc., Exelon Corp. and PG&E Corp. sided with Biden’s administration, as did the Edison Electric Institute, an investor-owned utility trade group.

California Governor Gavin Newsom said the Supreme Court “sided with the fossil fuel industry, kneecapping EPA’s basic ability to tackle climate change.”

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

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.

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