Why the IRA Does Not "Grant" the EPA "Broad Authority to Shift America Away from Burning Fossil Fuels"

A New York Times story creates a false impression about the effects of the Inflation Reduction Act's Climate Provisions

On Monday, the New York Times published a story proclaiming that the Inflation Redution Act is a "game changer" because it amended the Clean Air Act to "make new regulations much tougher to challenge in court." This would be an incredibly important development if it were true, but it's not, for reasons I will explain.

Here is how the NYT story begins:

When the Supreme Court restricted the ability of the Environmental Protection Agency to fight climate change this year, the reason it gave was that Congress had never granted the agency the broad authority to shift America away from burning fossil fuels.

Now it has.

Throughout the landmark climate law, passed this month, is language written specifically to address the Supreme Court's justification for reining in the E.P.A., a ruling that was one of the court's most consequential of the term. [West Virginia v. EPA, which I discussed here.] The new law amends the Clean Air Act, the country's bedrock air-quality legislation, to define the carbon dioxide produced by the burning of fossil fuels as an "air pollutant."

That language, according to legal experts as well as the Democrats who worked it into the legislation, explicitly gives the E.P.A. the authority to regulate greenhouse gases and to use its power to push the adoption of wind, solar and other renewable energy sources.

There is quite a bit that is problematic about this framing, and what follows.

The IRA does include multiple provisions designed to accelerate the reduction of greenhouse gas emissions, including multiple provisions (in Title VI of the law) that amend the Clean Air Act to create various incentive programs. Most of these are various types of subsidy programs, though one authorizes a "waste emissions charge" on excess methane emissions from oil and gas facilities. The IRA does not grant the EPA new regulatory authority with regard to GHGs. Nor does it address the Supreme Court's reasons for rejecting a broad view of EPA's regulatory authority in West Virginia v. EPA.

Nor is it quite accurate to say the IRA "amends the Clean Air Act . . . to define the carbon dioxide produced by the burning of fossil fuels as an 'air pollutant.'" Nothing in the IRA modifies the CAA's existing definition of air pollutant in Section 302 of the Act.

What the IRA does instead is to provide several section-specific definitions of greenhouse gases that read like this:

Definition of Greenhouse Gas.–In this section, the term `greenhouse gas' means the air pollutants carbon dioxide, hydrofluorocarbons, methane, nitrous oxide, perfluorocarbons, and sulfur hexafluoride.

This language does not speak at all to the issues in WVa v. EPA, as nothing in that case turned on whether greenhouse gases are air pollutants. Moreover, these definitional provisions—which refer to various air pollutants as greenhouse gases for the purposes of the specific sections of the CAA in which they are included—do not address or adjust any of the CAA provisions at issue in WVa. Nor do these provisions alter or affect any of the CAA provisions at issue in prior legal challenges to GHG regulations, nor do they address any of the provisions the EPA is likely to use for future GHG regulations.

Later on in the article, it is suggested that because these provisions define greenhouse gases as a set of air pollutants, this makes clear that GHGs may be considered air pollutants under the Act, and that this will be "'a powerful disincentive' to new lawsuits." Don't bet on it.

In Massachusetts v. EPA the Supreme Court concluded that the CAA's definition of "air pollutant" is sufficiently broad to include greenhouse gases, at least for the purposes of Section 202. This conclusion was reaffirmed in the Supreme Court's UARG v. EPA decision, albeit with the important caveat that just because GHGs are air pollutants under some provisions of the CAA, they are not air pollutants under other portions of the Act.

The new IRA provisions are certainly consistent with the Mass v. EPA holding, but they are consistent with the UARG holding as well. Indeed, because the relevant definitional provisions in the IRA are all section-specific, they actually reinforce UARG's conclusion that GHGs may be air pollutants for some portions of the Act, but not others. In other words, these provisions will not stop red-state AGs and others from challenging efforts to regulate GHGs through provisions of the CAA that had not been used previously for that purpose. There is one provision in the IRA that references EPA's use of "existing authorities" of the CAA to reduce GHGs, but that too is as consistent with UARG and WVa. as it is with Mass v. EPA, and so does not move the needle much either.

These provisions are not going to discourage litigation, nor do they do much of anything to protect future EPA regulation of GHGs from legal attack. Serious challenges to future EPA regulations will not seek to overturn Mass v. EPA or claim that the EPA has no authority to regulate GHGs. Rather, these suits will (as in UARG) challenge the EPA's authority to regulate GHGs under specific provisions of the CAA, argue that the EPA's regulations are arbitrary or unreasonable, or (as in WVA v. EPA) that the manner in which the EPA is seeking to regulate GHGs exceeds the scope of the EPA's power. Nothing in the IRA will help the EPA fend against these sorts of arguments.

It is fair to argue that the IRA evinces Congress's intention that the EPA concern itself with greenhouse gas emissions, including from the power sector. But that's not the terrain upon which future challenges to EPA regulation of greenhouse gases will be fought. If, for example, the EPA responds to WVa v. EPA by issuing new regulations mandating co-firing or the use of carbon capture technology at coal-fired power plants, those rules will be challenged on various grounds, and some of these challenges will be serious, but the serious challenges will not include the claim that GHGs cannot be air pollutants under the CAA.

There is one way there IRA may help the EPA make new regulations stick, but it has nothing to do with the new CAA language hyped by the NYT. That is that insofar as the IRA's subsidies reduce the costs of reducing GHG emissions, the EPA may be able to adopt more aggressive regulations without risking judicial invalidation. (Robinson Meyer notes this point here, though I disagree with those portions of the article that echo the NYT's mistaken analysis.)

One other (somewhat pedantic) point about the NYT story is that it misrepresents how endangerment works for purposes of triggering regulation under the CAA. The story claims that the EPA's 2009 conclusion that GHGs could be reasonably anticipated to endanger health or welfare "meant carbon dioxide could be legally defined as a pollutant and regulated." This is backwards. It is not that something must be considered dangerous before it can be considered an air pollutant under the Act. Rather, if something is an air pollutant (because it satisfies the Act's definition, which does not require dangerousness), then the EPA may regulate that pollutant under certain CAA provisions if the EPA subsequently concludes that emissions of that pollutant cause or contribute to air pollution that may endanger health or welfare. In other words, just because something is an air pollutant under the Act does not necessarily mean that it is dangerous or that the EPA can or must regulate it.

None of this means the IRA is not significant climate legislation. It is not only the most significant climate legislation ever enacted by Congress [low bar, admittedly]. It represents the most serious and substantial legislative effort to begin decarbonizing the American economy, and this effort may well bear fruit. (For a sober take on its likely effect, see Ron Bailey's assessment.) But the significance of the IRA as a climate policy measure is not that it bulletproofs the EPA against legal challenges to its regulations, because that is not what the IRA does.