The Supreme Court of the United States (SCOTUS) recently took on a case questioning the Environmental Protection Agency’s (EPA) ability to limit carbon emissions. In the case, West Virginia v. EPA, the government questioned whether the EPA could put carbon emissions caps on power plants.
Ultimately, SCOTUS used a legal concept known as the major questions doctrine to come to its decision. This doctrine basically limits government agencies to powers explicitly granted by Congress. Upon review of the laws challenged by West Virginia under the purview of this doctrine, the justices found the EPA had exceeded its authority. SCOTUS held Congress had not given the EPA the power to force these caps and ruled in favor of West Virginia.
Three takeaways for businesses throughout the nation from this case are discussed below.
#1. The target caps will not go into effect as originally planned
There is debate on whether these power plants would reach these emission goals without the caps in place, and they still may. But, because of this ruling, the EPA cannot currently require the carbon emissions cap at issue in this case.
#2. Additional Congressional action is possible
The holding specifically states Congress did not give the EPA this authority. As such, Congress could enact legislation to expand the EPA’s authority. We will provide updates if any such legislation seems likely. At this time, it does not.
#3. Consumers continue to support clean energy
Some businesses may choose to move forward with a shift towards clean energy even though not mandated. Renewable energy is booming, in part due to an increased focus from the public and investors on environmental, social, and governance factors.