Supreme Court Sides with Utilities in Landmark Greenhouse Gas Decision

The US Supreme Court on Monday unanimously rejected a greenhouse gas (GHG) lawsuit brought against five major utilities by six states.

The decision in American Electric Power Company v. Connecticut is the most significant climate change ruling since the Supreme Court ruled in 2007 that GHG are pollutants that should be regulated under the Clean Air Act. 

While Monday’s ruling reinforces the 2007 decision, it must be considered a loss for environmental interests that hoped to set a new precedent for state-level action on GHG reductions in the absence of strong federal policy.

Connecticut, California, Iowa, New York, Rhode Island, and Vermont sued the five largest polluting utilities – AEP, Southern Company, Xcel Energy, Cinergy and TVA – to force them to upgrade their plants to reduce their GHG pollution.

Power plant smokestacks are the single largest source of carbon pollution in our nation, responsible for nearly 40% of all U.S. emissions.

The Supreme Court ruled, however, the states could not force utilities to clean up their act claiming a "common law nuisance" because regulating GHG is the EPA’s responsibility under the Clean Air Act.  

The decision is a victory for the power companies and for the Obama administration, which backed the position of the utilities in arguing that the EPA, and not states, should regulate GHG emissions.

However, President Obama’s efforts to impose EPA regulations are being assaulted by numerous lawsuits and Republican legislative initiatives. Fearing that federal efforts to cap rising GHG levels might fail, environmental groups supported the states’ position in the suit.

But the decision should not be viewed as a major setback, according to Environmental Defense Fund President Fred Krupp.

"The most important thing about this decision is that it buttresses the foundation for EPA to do its job," says Environmental Defense Fund President Fred Krupp. "The Supreme Court strongly underscored EPA’s responsibility under the law to address climate pollution that threatens the health and well-being of our nation."

The Court’s opinion holds that a 2007 Supreme Court decision "made plain that emissions of carbon dioxide qualify as air pollution subject to regulation under" the Clean Air Act, and that the Act "’speaks directly to emissions of carbon dioxide from the defendants’ plants."

The Court describes at length the EPA’s development of GHG New Source Performance Standards for new and existing power plants, a major source of global warming pollution, under the nation’s Clean Air Act and its commitment to complete action by May 2012:

"EPA is currently engaged in a [Clean Air Act] rulemaking to set standards for greenhouse gas emissions from fossil-fuel fired power plants. [T]he agency agreed to complete that rulemaking by May 2012. [citation omitted]. The Act itself thus provides a means to seek limits on emissions of carbon dioxide from domestic power plants – the same relief the plaintiffs seek by invoking federal common law. We see no room for a parallel track."

The Court also reiterates the importance of relying on EPA’s expertise in addressing air pollution problems: "It is altogether fitting that Congress designated an expert agency, here, EPA, as best suited to serve as primary regulator of greenhouse gas emissions."

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