Emmett Institute on Climate Change & the Environment

Text in Context: The Fate of Emergent Climate Regulation After Utility Air and EME Homer

Ann E. Carlson, Megan M. Herzog

39 Harvard Environmental Law Review 23 (2015)

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In a special issue of the Harvard Environmental Law Review, Professor Ann Carlson and Emmett/Frankel Fellow Megan Herzog discuss the two key Clean Air Act cases of the U.S. Supreme Court’s 2013 Term: EPA v. EME Homer City Generation and Utility Air Regulatory Group v. EPA.  In EME Homer, the Court upheld EPA’s reading of the Clean Air Act to allow for an innovative interstate emission-reduction program.  In UARG, the Court invalidated EPA’s interpretation applying two CAA permitting programs to greenhouse gas emissions, but nonetheless upheld the majority of EPA’s permitting scheme.  

In this essay, Carlson and Herzog propose that EME Homer and UARG will play a starring role in determining the viability 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).  Read together, EME Homer and UARG cases 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 text arguably points in another direction.  

Which context, or story, will prevail as courts evaluate the Clean Power Plan?  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?  Carlson and Herzog argue that, while it is impossible to foretell which context would prevail, the former story better suits EPA’s section 111(d) program.  And whatever the outcome, a battle of contextual stories is sure to be at the heart of judicial review of EPA’s emergent climate regulation.