How Obama Could Lose His Big Climate Case

It looked likelier than ever at this week’s “Super Bowl of climate law.”

President Barack Obama hosts CEO roundtable on climate change at the White House in Washington (Kevin Lamarque / Reuters)

WASHINGTON—There’s a commonplace when writing about climate change, a juxtaposition so familiar it almost deserves a name. It resembles CSPAN, but directed by Michael Bay. First, a speaker points to the prospect of 21st century ecological collapse: sloshing waves, ravenous forest fires, fathers weeping as their crops succumb to a drought.

Then, the camera reveals the rooms where people make climate-change policies today. They are wood-paneled, document-strewn, and full of briefcases. Compared to the Hollywood blockbuster that preceded them, they seem boring. They are boring. But then the punchline: In this room—this bureaucratic, tedious room—the fate of the whole planet is decided.

On Tuesday, during the most important legal hearing for climate-change policy in the United States this year (Politico compared it to the Super Bowl, World Series, and Quidditch World Cup happening all at once), a George W. Bush-appointed federal judge made a similar point about the absurdity of the circumstances.

“Why isn’t this debate on the floor of the Senate, instead of in a courtroom in front of a panel of unelected judges?”, Judge Thomas Griffith asked.

He and nine of his colleagues, who sit on the U.S. Court of Appeals for the District of Columbia Circuit, were hearing arguments about whether the Obama administration’s signature domestic climate policy passes muster under the Clean Air Act and the Constitution. No one doubted the reality of the science, and they recognized their decision meant more than just a change to federal administrative law.

“The earth is warming. Humans are contributing,” said Judge Brett Kavanaugh, another George W. Bush appointee. “There is a moral imperative. There is a huge policy imperative. The pope’s involved.”

The enormity of global warming, they seemed to say—should it really be fixed by us, sitting in this puny room?

* * *

In the past two years, President Obama has converted climate change from a Democratic wedge issue into a major party plank. American diplomats worked with their Chinese and Indian counterparts to secure the Paris Agreement, and, with it, an international consensus to mitigate greenhouse-gas emissions; now John Kerry labors to bring the treaty into legal force by the end of the year. Obama speaks of climate change as a critical aspect of his legacy—and a likely focus of his work after the presidency.

But his accomplishments are precarious. The Paris Agreement supposes that the United States will reduce its emissions by 2025. Yet after the Senate failed to approve a carbon-market bill during his first term (even though it passed the House), the White House has advanced emissions-reduction policy primarily by introducing new regulations.

The most critical of these—and the White House’s last best hope to make significant domestic climate policy—is the Clean Power Plan, a complicated set of Environmental Protection Agency regulations that aim to reduce greenhouse-gas emissions from power plants by 2030. If fully implemented, the new rules would cut emissions from the electricity sector by about 30 percent compared to 2005 levels, according to the government’s estimates. It would also help the United States keep the emissions-reductions promises it made at Paris.

It is a last-ditch plan, the president trying to mitigate climate change however he can. It is also a legally risky one. Regulations must not only comport with the Constitution but also with the law passed by Congress that delegated power to the agency in question—in this case, the Clean Air Act. The rules could also easily be undone by his successor.

On Tuesday, 10 judges of the D.C. Circuit gathered to hear oral arguments in the sweeping legal challenge to the plan, which was filed last year by 27 Republican-governed states, the U.S. Chamber of Commerce, and the coal industry. The hearing was careful, sometimes agitated, and unusually long: Excluding a short break for lunch, the arguments ran almost seven hours.

On a simplistically partisan basis, the D.C. Circuit leans liberal. Six of its judges were appointed either by Obama or Bill Clinton; the other four were appointed by a Bush. An 11th member, Merrick Garland, recused himself from the case while his nomination to the Supreme Court is held up by Senate Republicans. Even in a 5-5 tie, the government has the advantage, and the regulation would still stand.

The hearing felt a tad provisional. Whoever loses this round will almost certainly appeal to the Supreme Court. This assumption is not only common wisdom but also legal decree: In February, the high court ruled that it must hear the challengers’ case before the Clean Power Plan can enter legal force. It was an extremely unusual action—normally, federal regulations take effect despite ongoing litigation—and one of Antonin Scalia’s last official actions as a justice.

Scalia loomed in Tuesday’s hearing. If the Obama administration loses, it will be thanks in part to his deciding opinion in a case two years ago, Utility Air Regulatory Group v. EPA. It was one of three critical Supreme Court rulings that seemed to weigh heavily on the judges’ thinking.

The first case in this set is more than three decades old. Known as Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., it gives rise to the most famous concept in administrative law (something like being the world’s most famous organist), the idea of “Chevron deference.” Chevron says that a federal agency should have latitude to interpret the statutes that empowered it if those statutes are unclear. The question isn’t whether the court thinks the agency’s interpretation is best; the question is whether the agency’s interpretation is valid.

“If the intent of Congress is clear, that is the end of the matter,” wrote Justice John Paul Stevens in that 1984 decision. “If the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.”

Chevron deference has since become an increasingly important idea in federal law. During the Reagan and Bush presidencies, it generally permitted the White House to neglect to regulate industries that had previously faced greater agency oversight. But during the Obama presidency, and as Congress has proved less willing to meet societal problems with new laws, it has been applied in the other direction.

As a court case, Chevron concerned how Reagan’s EPA handled the Clean Air Act, but the idea of Chevron deference holds sway far beyond environmental law. When the Supreme Court decided that the Federal Communications Commission could legally enforce net neutrality, for instance, it did so in a case shaped by Chevron deference.

Chevron came up early in Tuesday’s session. Elbert Lin, the solicitor general of West Virginia and the counsel representing the 26 other states challenging the Clean Power Plan, began his argument by saying the rule was really “about constructing a new energy economy.”

Griffith, a Bush appointee, immediately interrupted him, saying that the Clean Power Plan only appeared to accelerate current trends, not replace them. “That hardly sounds transformative,” he said. “Isn’t this a Chevron issue? What didn’t Congress delegate?”

Judge David Tatel, a Clinton appointee, agreed. “The only authority the EPA has invoked is Clean Air. What’s really novel is regulating CO₂, but the Supreme Court did that work in Massachusetts v. EPA,” he said.

Which brings us to the second major case. In 2005, Massachusetts and other states sued the EPA, alleging that the agency was abusing Chevron deference by refusing to find CO₂ dangerous. The Bush administration’s EPA had recently declined to say whether greenhouse gases counted as a pollutant under the Clean Air Act.

In a 5-4 opinion, Stevens wrote that the petitioning states were right. Greenhouse gases clearly fell under the Clean Air Act’s definition of an “air pollutant,” and the consequence of their emission—that is, climate change—plausibly endangered the public welfare. The agency’s refusal to address the issue seemed “arbitrary, capricious, [or] an abuse of discretion”—making it a violation of Chevron, he said.

Massachusetts v. EPA laid the foundation for the Clean Power Plan: Without it, executive action to address climate change would be on much weaker ground. But it also faces a legal wrinkle, which was placed by Scalia in a deciding opinion seven years later.

In 2014, the Supreme Court ruled on another Clean Air Act case, Utility Air Regulatory Group v. EPA, in an unconventional mishmash of decisions. Overall, the court unanimously upheld the EPA’s ability to regulate greenhouse gases. But it did so in three overlapping opinions. In Scalia’s controlling opinion—which Justices Roberts, Kennedy, Thomas, and Alito joined in full (the liberal justices joined it in part)—he rejected the EPA’s approach to expanding the number of CO₂ sources it was trying to regulate.

He did it via something called the clear-statement rule. You could see this as adding a “just making sure” clause to Chevron deference, though in effect it is far broader. The clear-statement rule says that courts shouldn’t interpret a new power into a statute unless Congress clearly intended that that power should be there in the first place.

In Utility Air, Scalia alluded to the clear-statement rule in a now fateful passage:

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.

As the EPA’s counsel, Eric Hostetler of the Department of Justice, began his argument, this section took center stage.

“It might have been written with this case in mind,” marveled Kavanaugh. (Indeed, some partisan commentators suspect exactly this.) The conservative judge then cited another clear-statement rule case, FDA v. Brown & Williamson, in which the Supreme Court forbade the FDA from regulating cigarettes.

“No matter how important, conspicuous, and controversial the issue, and regardless of how likely the public is to hold the Executive Branch politically accountable, an administrative agency’s power to regulate in the public interest must always be grounded in a valid grant of authority from Congress,” wrote Justice Sandra Day O’Connor in that 2000 decision.

Griffith seized on these cases, noting that Hostetler had begun his argument by calling climate change the most important environmental crisis of our time. Doesn’t that make it pretty economically and politically significant?, he said, adding that he had heard about his own case on NPR that morning. If this is so important, isn’t it clear that Congress should act?

But Griffith later suggested that the clear-statement issue had to be resolved in the EPA’s favor because of the clarity of Massachusetts. His liberal colleagues suggested they agreed.

“The Supreme Court already said the EPA gets to [regulate CO₂]. We handled the clear-statement aspect then, we can’t step back in now,” said Judge Judith Rogers, a Clinton appointee.

These were not the only legal questions at issue, of course. The Clean Power Plan works in part by pushing fossil-fuel plant owners to buy carbon credits from wind and solar plants. Peter Keisler, a former acting U.S. attorney general under George W. Bush, argued that the EPA was muddying its own terms.

Keisler framed carbon crediting as a kind of subsidy for the competition—something which he said the EPA had no authority to force. What’s more, wind and solar plants don’t even fall under the domain of the Clean Air Act, he said, as the law only regulates “sources” which emit air pollutants. Wind and solar power don’t release any pollutants at all, so they’re outside the act’s purview.

But the EPA forces power plants to buy certain technologies all the time, countered Judge Nina Pillard, an Obama appointee. How was buying a carbon scrubber any different from buying renewable credits? “This is an incident of any kind of regulation,” she said.

There are other constitutional issues in play as well. The conservative commentator and attorney David Rivkin, Jr., argued that the Clean Power Plan commandeered the power of states to regulate their own local affairs. In particular, he alleged that the federal government would now force the states’ hands in local affairs such as permitting new power plants; this abused the states’ authorities as “coequal sovereigns,” he said.

Tatel, who is blind, asked Rivkin if the Americans with Disabilities Act would also abuse the state’s local permitting powers. (The ADA more or less forces states to approve certain curb or wheelchair ramp designs.) Rivkin could not supply a coherent answer.

But Larry Tribe could. Tribe, Obama’s one-time legal mentor and a lion of liberal constitutional law, has famously become one of the Clean Power Plan’s most unrelenting critics. The ADA itself was perfectly legal, he said. The better comparison would be if an executive agency went to the states and forced them each to pass a mini-ADA or give in to federal control.

Tatel replied that this, in effect, was not dissimilar from what the Clean Air Act already allowed. “If the regulations comply with the statute, are you saying the Clean Air Act is unconstitutional?” he asked.

Tribe’s larger argument is that the Clean Power Plan abuses the separation of federal powers. “The solution is to go to Congress. The structural integrity of our federal government can’t depend on this court’s evaluation of whether Congress is being productive or not,” he said.

The entire atmosphere had been poisoned by Congress’s failure to do anything, he said. But even so, the EPA has limited authority: “It’s not the Enactment Parliamentary Agency, nor even the Energy Policy Agency,” he told the judges.

Amanda Shafer Berman, another counsel for the EPA, argued that the Clean Power Plan presented states with a classic choice of either regulating themselves or letting the federal government step in. “This is bread-and-butter federalism,” she said.

It doesn’t help that the 10 judges and the 16 attorneys at argument on Tuesday also had to deal with two different versions of the same law. As Coral Davenport details at The New York Times, the Senate and the House passed conflicting versions of the same amendment when they expanded the Clean Air Act’s powers in 1990. The two amendments both made it into the final law, which was then signed by the president. One of these versions seems to allow the EPA to regulate a single source under two different schemes, and the other doesn’t, or maybe it does. The court heard more than an hour of discussion about these two sections, but, by the end, no one seemed quite sure about how to interpret either of the clauses.

* * *

“Law is the boring side of many interesting topics,” writes Jedediah Purdy in a recent Harvard Law Review article about environmental regulations. On Tuesday, it seemed more like the calmer if sometimes tedious side.

The day before the hearing, I talked to an expert on climate change and armed conflict. The kinds of natural disasters that global warming will create more of—droughts, cyclones, forest fires—seem to trigger armed conflict in countries that are already ethnically factionalized, he said.

Of particular worry to him was the Mediterranean Basin: Many climate models predict that water will grow more scarce in North Africa. Empty aquifers could push ethnic divides there into open conflict, where their consequences risk spilling over into Western Europe. In some ways, I thought, this was not prediction but description: This decade, almost 5 million people have already fled a drought-triggered (and climate-addled) civil conflict in the Mediterranean world. Many of them have sought refuge in Europe, whose politics and governing norms have already been roiled.

I was reminded that what frightens me most about climate change—which will by itself cook forests, kill thousands of species, and alter the chemistry of the oceans—are the famines, mass migrations, and wars that could follow.

In this marbled court room, as the judges considered how this new footnote-filled regulation comports to the American rule of law, those concerns seemed far away.

It was not clear on Tuesday that the Clean Power Plan could recognizably survive judicial review. Most energy-industry representatives assume that the entire thing will not make it through. If it’s remanded, the EPA will likely have an opportunity to adjust it. But no matter what, the Democratic presidency will have largely exhausted its approaches to dealing with climate change by then. Tribe and Kavanaugh, two unlikely bedfellows, are correct that Congress must act. And for that to happen, at least some Republicans must first recognize the reality of climate change—an avoidable emergency that nonetheless imperils global society. If they don’t, things won’t always seem this civil.