Text in Context: The Fate of Emergent Climate Regulation after UARG and EME Homer

Abstract

The 2013–14 term of the U.S. Supreme Court was obviously significant for the U.S. Environmental Protection Agency. In EPA v. EME Homer City Generation, the Court upheld EPA’s reading of the Clean Air Act to allow for an innovative interstate emission-reduction program. In Utility Air Regulatory Group v. EPA, the Court invalidated EPA’s interpretation applying two Clean Air Act permitting programs to greenhouse gas emissions, but nonetheless upheld the majority of EPA’s permitting scheme. Read together, EME Homer and UARG offer an important lesson: in reviewing an agency’s interpretation of statutory language, context matters significantly in deciding what a text allows — even when the statutory text arguably points in another direction. We suggest this lesson will be extremely important as courts determine the viability of the legality of EPA’s most ambitious rulemaking to date, the proposed Clean Power Plan for regulation of existing power-plant GHG emissions under Clean Air Act section 111(d).

If a challenge to the Clean Power Plan reaches the Court, at least two different readings of the statutory context, leading to opposite outcomes, seem possible. In designing its program for state-based control of GHG emissions from existing power plants, is EPA interpreting section 111(d) “sensibly” by issuing a rule that takes into account cost-effectiveness, historical state action to regulate GHG emissions, and the complexity of the problem, thus warranting the leeway that EME Homer accorded EPA? Or is the agency engaged in an “enormous and transformative” power grab as in UARG, imposing on power plants and states a rule that extends far beyond the bounds of what the CAA intends? While it is impossible to foretell which would prevail, we believe the former story better suits EPA’s section 111(d) program. Whatever the outcome, a battle of contextual stories is sure to be at the heart of judicial review of EPA’s emergent climate regulation.

Keywords: climate regulation, Clean Air Act, EPA v. EME Homer City Generation, Supreme Court, Environmental Protection Agency