Jun 23, 2014 - 3:30pm

EPA Goes Overboard on Greenhouse Gas Overreach, Supreme Court Rules

Senior Editor, Digital Content


United States Supreme Court
Photographer: Andrew Harrer/Bloomberg.

As EPA works to impose costly carbon regulations on America's electrical system, the Supreme Court ruled that it was unconstitutional for EPA to decree that millions of small businesses are greenhouse gas polluters. There are limits to EPA's efforts to regulate greenhouse gas emissions.

Law professor Jonathan Adler at the Volokh Conspiracy explains what the case, UARG v. EPA, was about:

At issue in UARG v. EPA was the EPA’s conclusion that its regulation of greenhouse gases from motor vehicles triggered mandatory regulation of GHGs from large stationary sources under the PSD (Prevention of Significant Deterioration) and Title V programs, and EPA’s subsequent decision to rewrite the statutory emission thresholds for regulation under these portions of the Clean Air Act in order to facilitate GHG regulation.

The court ruled that EPA’s greenhouse gas rules on new vehicles didn’t trigger the regulation of greenhouse gas emissions for stationary sources.

The court also ruled that EPA unconstitutionally rewrote greenhouse gas emissions thresholds. Environmental scholar Stephen Hayward at Power Line explains:

The [Clean Air] Act says any stationary source that emits as little as 100 tons a year of a pollutant must get annual permits from state agencies and the EPA.  100 tons is a lot if you’re looking at pollutants like volatile organic gases (unburned hydrocarbons) that contribute to ozone, but is a tiny amount for carbon dioxide. Your average fast-food restaurant or donut shop or apartment building easily emits 100 tons of CO2.  Right now about 14,000 stationary sources have to get annual emission permits under the Act.  By regulating CO2 through the Clean Air Act, the number of businesses that will require EPA permits will be over 6 million.

EPA admitted that monitoring this level of greenhouse gas emissions would require 230,000 new federal workers. EPA issued a “tailoring” rule in May 2010 that rewrote the threshold under the PSD and Title V programs to 75,000 tons of carbon dioxide per year.

The court ruled that EPA went overboard. In a majority opinion, Justice Antonin Scalia went nautical in tearing apart EPA’s efforts to ignore Congress and rewrite the law [emphasis mine]:

In the Tailoring Rule, EPA asserts newfound authority  to regulate millions of small sources—including retail stores, offices, apartment buildings, shopping centers, schools, and churches—and to decide, on an ongoing basis and without regard for the thresholds prescribed by Congress, how many of those sources to regulate. We are not willing to stand on the dock and wave goodbye as EPA embarks on this multiyear voyage of discovery. We reaffirm the core administrative-law principle that an agency may not rewrite clear statutory terms to suit its own sense of how the statute should operate. EPA therefore lacked authority to “tailor” the Act’s unambiguous numerical thresholds to accommodate its greenhouse-gas-inclusive interpretation of the permitting triggers.

Justice Scalia goes on to state that Congress never intended the Clean Air Act to have such broad reach:

EPA’s interpretation is also unreasonable because it would bring about an enormous and transformative expansion in EPA’s regulatory authority without clear congressional authorization. When an agency claims to discover in a long-extant statute an unheralded power to regulate “a significant portion of the American economy,” we typically greet its announcement with a measure of skepticism. We expect Congress to speak clearly if it wishes to assign to an agency decisions of vast “economic and political significance.” The power to require permits for the construction and modification of tens of thousands, and the operation of millions, of small sources nationwide falls comfortably within the class of authorizations that we have been reluctant to read into ambiguous statutory text. Moreover, in EPA’s assertion of that authority, we confront a singular situation: an agency laying claim to extravagant statutory power over the national economy while at the same time strenuously asserting that the authority claimed would render the statute “unrecognizable to the Congress that designed” it. Since, as we hold above, the statute does not compel EPA’s interpretation, it would be patently unreasonable—not to say outrageous—for EPA to insist on seizing expansive power that it admits the statute is not designed to grant.

U.S. Chamber President and CEO Tom Donohue hailed the ruling:

Today’s Supreme Court decision demonstrates what we’ve said all along: the Clean Air Act is ill-suited to address greenhouse gas emissions. The Court recognized that EPA’s attempt to sweep small businesses into its greenhouse gas agenda was an unconstitutional power grab.  EPA is now on notice that it does not have unlimited authority to impose massive costs on the U.S. economy and mandate a fundamental redesign of America’s electricity system.

As EPA moves ahead with its costly proposed carbon regulation, this ruling is a reminder that no federal agency--even the EPA--has a regulatory blank check.

[H/t memeorandum]

Follow Sean Hackbarth on Twitter at @seanhackbarth and the U.S. Chamber at @uschamber.

About the Author

About the Author

Sean Hackbarth
Senior Editor, Digital Content

Sean writes about public policies affecting businesses including energy, health care, and regulations. When not battling those making it harder for free enterprise to succeed, he raves about all things Wisconsin (his home state) and religiously follows the Green Bay Packers.