The U.S. Supreme Court’s ruling on West Virginia v. the Environmental Protection Agency (EPA) delivered a significant setback to the Biden administration’s efforts to fight climate change. The court argued that the EPA lacks wide latitude under the current Clean Air Act to force the power industry to regulate greenhouse gas emissions from existing coal-fired power plants. Power plants are the second largest source of U.S. greenhouse gas emissions, according to the EPA.
The Biden administration’s goal is to cut total greenhouse gas emissions from 2005 levels in half by 2030 and to fully decarbonize the power sector by 2035. The EPA’s ability to regulate greenhouse gas emissions is a key factor in reaching these goals.
The 6-3 ruling may tie the administration’s hands in terms of taking more aggressive action against climate change, while also inviting challenges to related regulations imposed by other agencies.
Chief Justice Roberts, writing for the majority, determined that Congress, not the EPA, has the power to create regulations on fighting climate change.
“That’s a very ominous part of the opinion and could have a chilling effect on what agencies can do,” said Jody Freeman, director of the Environmental Energy Law Program at Harvard University, “There could be real trouble brewing across the administrative state.”
What are the implications of this ruling on the real estate industry? With real estate contributing to 40 percent of global carbon emissions, decarbonization not only addresses environmental challenges, but can also contribute to cost savings, social equity, tenant, and employee well-being and health. The Supreme Court’s ruling destabilizes the future of proposed climate change regulations of other U.S. agencies.
“The Supreme Court’s ruling may signal that ultimately as an industry, we may not achieve as green of a grid as fast as we’d like,” said Measurabl CEO, Matt Ellis. “The result is that real estate owners may have that much more energy efficiency work to do within the industry, and owners must lead with a continued focus on ESG programs that allow them to act on ESG data and decarbonize their portfolios.”
Measurabl actively helps customers automate ESG reporting and stay well ahead of potential climate-related regulations and industry-driven demands. We continue to introduce new features designed to help the real estate industry report and act on building and portfolio level emissions and climate risk data.
In a statement after the Court’s ruling, President Biden vowed to find ways for his administration to combat climate change, including through EPA action. “Our fight against climate change must carry forward, and it will,” he said.
Additionally, many of the nation’s largest companies, including Apple, Amazon, Google, and Netflix, disputed the Supreme Court’s decision in a friend-of-the-court brief, stating that while they are undergoing their own efforts to mitigate climate change, it’s “vital” that the EPA “play a lead role by regulating greenhouse gas emissions.”