As US Supreme Court reins in EPA’s climate authority, businesses must double down on action

The US Supreme Court (SCOTUS) dealt a harsh blow to climate action on June 30, 2022 with its ruling on West Virginia v. Environmental Protection Agency (WV v. EPA), which limits the Environmental Protection Agency’s (EPA) authority to regulate greenhouse gas (GHG) emissions and combat the planet’s unfolding environmental emergency. The decision may significantly curtail the Agency’s ability to reduce emissions from existing power plants and address environmental issues in other sectors, posing a major setback in tackling the global climate crisis.

On the heels of controversial rulings that limit access to reproductive health — an essential component of climate adaptation and resilience — and challenge progress on gun control, the 6-3 vote suggests that the Clean Air Act does not give the EPA the authority to impose wide-reaching GHG emissions regulations on the power sector. The move effectively reduces the tools the EPA has at its disposal to quickly and efficiently drive the grid towards decarbonization. Per the New York Times, “the decision stripped President Biden of a crucial tool in his efforts to control pollution.”

The ruling couldn’t come at a worse time. Scientists now generally accept that our best hope of limiting global warming to 1.5ºC and mitigating the worst case scenario of climate change is for humanity, and its institutions, to act decisively now. To achieve this, global GHG emissions must peak by 2025 and be reduced by 43% by 2030. For the United States to meet its national commitments under the Paris Climate Agreement, the Biden Administration has proposed to cut economy-wide emissions 50% by 2030, alongside a complete decarbonization of the power sector — one of the largest sources of GHG emissions in the US — by 2035. This will prove all the more challenging now that the Executive Branch’s ability to drive systemic change through regulation has been severely compromised.

The SCOTUS docket is discretionary and the decision to rule on WV v. EPA, which challenges a regulation that had never even taken effect, was an unusual one. There was no clear urgency to take up the case, making the ideological and political motive of the decision acutely clear. The Court’s conservative majority seems to be working their way down a list of agenda items on behalf of the American far right. What is perhaps the most troublesome aspect of this case, as Ian Millihiser of Vox points out, is that through the West Virginia decision the Supreme Court has “effectively placed itself at the head of much of the executive branch of the federal government.” This is particularly problematic for the environmental cause. As Justice Kagan persuasively argues in her dissenting opinion, the Court has effectively told the EPA’s climate experts that they are not authorized to do their job under the Clean Air Act. The judiciary is now, in effect, the ultimate arbiter in matters of climate policy.

That is, unless a gridlocked US Congress — which also notably lacks in environmental expertise — decides to pass the kind of sweeping climate legislation that has eluded it for decades. By punting the responsibility to Congress, SCOTUS has potentially mired environmental action to even more bureaucratic inaction. 

In terms of what this could mean for businesses, only time will tell. It’s at least true that this ruling doesn’t directly affect how companies are addressing their Scope 1 and 3 emissions but the unprecedented decision could beget more challenges to the EPA’s authority and governmental environmental action in general. In the long-run, the legal climate could make it increasingly difficult for businesses to meet their voluntarily set targets without regulation driving the economy toward decarbonization. 

Though it’s disheartening that US leaders are playing politics at the expense of the planet (and all those occupying it), we encourage our clients to not lose heart and continue to broaden, expand and accelerate their efforts to align with planetary boundaries. While governments can seem increasingly erratic in their handling of environmental matters, the business world continues to have an opportunity — and a duty — to drive positive change for the benefit of people and planet. We, at Quantis, have faith that businesses understand what’s in their own collective best interests. 

And it’s why we do what we do.