On the last day of what was already an historic term, the Supreme Court issued another significant decision impacting EPA’s authority under the Clean Air Act to regulate greenhouse gas emissions and address climate change. As EPA embarks on a third attempt at a rule targeting CO2 emissions from existing power plants that will pass legal muster, the question now is how the Court’s decision will affect that new rule.

The legal implications of the decision in West Virginia are broad, as the Court relied on the “major questions” doctrine to determine the scope of EPA’s authority to regulate greenhouse gas emissions from power plants under the Clean Air Act. Although the dissent complains that the majority created a brand-new doctrine, the majority decision merely endorses a particular way of determining the intent of Congress in certain “extraordinary cases” involving administrative agency use of an old and ambiguous statutory provision to claim broad and sweeping powers with dramatic political and economic significance.

The majority’s reliance on the “major questions” doctrine means that going forward, administrative agencies will need to point to clear statements from Congress before using old authority, like the 1977-vintage provision at issue in West Virginia, to address new problems like climate change. In other words, as the Court has previously and repeatedly held, policy “elephants” don’t hide in statutory “mouseholes.” The concurring opinion notes that this approach to interpreting a statute is simply what the U.S. Constitution requires — laws must be written by democratically elected legislatures and then implemented, not rewritten, by unelected administrative officials.

Despite the broad implications of West Virginia, EPA may try to read the decision narrowly because the Court made clear that its holding was limited to finding that the Clean Power Plan — EPA’s first CO2 rule for existing power plants, written under the Obama administration — exceeded Congress’ grant of authority to EPA under the Clean Air Act. In specific, the Court found that a rule issued under Section 111 of the Clean Air Act, like the Clean Power Plan, cannot rely on “generation shifting,” i.e., forcing power plants to switch from one method of electricity generation to a cleaner method of generation. For the majority, the authority to determine the makeup of the nation’s energy mix is an immense power that Congress would have clearly delineated in the Clean Air Act if it had intended for EPA to wield it. EPA may also try to read the decision as merely ruling out one approach that EPA cannot use — generation shifting — since the Court did not specify exactly what approaches EPA can use.

Notably, the Court made no attempt to evaluate the legality of the Affordable Clean Energy (ACE) rule — EPA’s second CO2 rule for existing power plants, written during the Trump administration. That rule was based on an “inside-the-fenceline” reading of the Clean Air Act and relied solely on efficiency improvements that can be made at individual facilities. In the wake of West Virginia, the questions of whether ACE was legal and whether a Section 111 rule must rely solely on measures that a source can accomplish inside its own fenceline remain undecided. The answer will depend on what EPA decides to do next in its third rule for existing power plants, now promised in March 2023.