Thursday, June 23, 2011

The Supreme Court and Carbon Dioxide

On Monday June 20th 2011 the Supreme Court unanimously (8-0 with Justice Sotomayor recused) rejected a lawsuit that had sought to force major electric utilities to reduce their greenhouse gas emissions without waiting for federal regulators to act. The case was originally filed in July of 2004 when eight states, California, Connecticut, Iowa, New Jersey, New York, Rhode Island, Vermont and Wisconsin and New York City filed the suit in Federal Court. Later New Jersey and Wisconsin dropped out. The six remaining states were joined by several Land Trusts and legal foundations dedicated to litigating their way to their envisioned better future. The suit was filed against by AEP, Xcel Energy Inc., Duke Energy Corp., Southern Co. and the Tennessee Valley Authority who were ultimately joined in their fight by legal foundations with the opposite or differing world view.

The states claimed that the utilities contribute to global warming by pumping 650 million tons of carbon dioxide into the atmosphere each year, representing about 25% of emissions from U.S. power plants and 10 % of emissions from all U.S. sources. The suit sought to have the courts force cuts in emissions from these plants.

The utilities had questioned the states legal right, or (in legal speak) standing, to sue because they couldn’t show that they were harmed by anything the utilities did or that they would benefit from a ruling against the power companies. On the standing issue the court was split 4-4 with Justice Sotomayor recused (she had heard the case on appeal in New York) so the court made no ruling. It is truly difficult to see how the plaintiffs could have shown harm from the utilities or benefit from the reduction of emissions even if the utilities shut all their plants down. First, the states would have had to demonstrate global warming is occurring and is caused by the utilities operations and then demonstrated how the states were harmed by global warming as well as demonstrating how the states would benefit from a reduction in carbon dioxide released by the plants. Nonetheless, the court did not rule on standing. The court should stick to questions of law and leave interpretation of science and scientific speculation to agencies.

In the opinion written by Justice Ruth Bader Ginsburg, the court held that the states and other plaintiffs can’t use federal public-nuisance law to seek court-imposed limits on carbon dioxide emissions. Federal common law is displaced and no nuisance claim is within the powers of the court to decide because Congress authorized EPA to regulate greenhouse gas emissions under the federal Clean Air Act (CAA). In a previous Supreme court decision in Massachusetts v EPA (2007), the Supreme Court had ruled that the Clean Air Act did authorize federal regulations on greenhouse gas emissions, and that the agency was required to issue them unless it had a scientific basis for its refusal.

Justice Ginsburg said the plaintiffs were making their case in the wrong forum, Clean Air Act authority precludes federal common law even when the agency has not exercised its statutory authority. Justice Ginsburg emphasized EPA’s plans to regulate utility greenhouse gas emissions under Section 111 of the Clean Air Act, which governs establishment of New Source Performance Standards (NSPS).

The decision noted that the Clean Air Act Section 111(d) confers authority to the EPA to set new NSPS for existing sources as well as new sources. However, EPA has infrequently used its authority under Section 111(d). Though it appears that EPA intends to regulate greenhouse gases under the Clean Air Act, EPA does have another option that it has used more frequently in the past. EPA can choose to regulate greenhouse gases and carbon dioxide under the National Ambient Air Quality Standards, NAAQS, where costs of the regulation cannot be considered. Under Section 111(d) of the Clean Air Act costs of the regulation must be considered.

When EPA regulates using the NAAQS provisions the result is more stringent regulations because costs cannot be considered under NAAQS. However, Justice Ginsburg seemed to be identifying the Clean Air Act as the source of the authority to regulate carbon dioxide in her decision. The current science, political and economic environment is one where costs must be considered. The science of climate is still beyond our full understanding and methods of regulation as well as their costs must be considered if our nation is to continue to maintain anything close to our standard of living and the financial ability to respond to natural disasters, severe weather and changes in climate. We are poorer than we once were and no other nation will race to our assistance.

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