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The Inflation Reduction Act is probably protected from SCOTUS. New environmental regulations? Not so much.
Climate change is a huge danger to countless lives. All indications are the Biden administration takes the threat seriously. The Inflation Reduction Act, in particular, demonstrates that climate change has become a top priority for the Democratic coalition. But with Republicans in control of the House of Representatives, further sweeping legislation is off the table for at least two years.
The good news is Congress has already given the executive branch ample authority to address climate change. The bad news is it's highly likely that the Republican-controlled Supreme Court will stop it from using this authority. The Republican super-majority on the Court is coming for climate regulation.
The crucial harbinger of what is likely to come is the 2022 case West Virginia v. EPA. On one level, the decision’s effects were narrow, because the program it held to be unconstitutional (Obama’s Clean Power Plan) had never gone into effect. But the decision is ominous because of the grounds on which the Court struck down the CPP.
In an opinion written by Chief Justice Roberts and joined by other conservative justices, the Court held that the program ran afoul of the recently-invented “major questions” doctrine.” According to Roberts, the doctrine means when considering some “extraordinary cases” with heightened “economic and political significance,” the Court should “hesitate” and require that the administrative agency point to “clear congressional authorization” for its actions. Roberts asserted that the Environmental Protection Agency had failed to show a clear authorization, and hence the CPP exceeded the EPA’s authority.
The decision reflects an implausibly narrow view of the EPA’s authority. Section 111 of the Clean Air Act authorizes the EPA to regulate pollutants that “may reasonably be anticipated to endanger public health or welfare.” It also authorized the EPA to identify the “best system of emissions reduction” for power plants. The Clean Power Plan fell squarely within the statutory scheme. Greenhouse gases that accelerate climate change would seem to a paradigmatic example of what Congress wanted the EPA to regulate – carbon emissions are pollutants, and there can be no serious question that climate change poses a major threat to public welfare and safety. And the CPP’s measures to encourage power companies to either use cleaner sources or participate in a cap-and-trade program fall within its authority to select the best system for emissions reduction.
The majority’s holding that the CPP falling within the terms established by the statute was insufficient because a problem as big as climate change requires more specific authorization is perverse. As Justice Kagan observed in her dissent, a “key reason Congress makes broad delegations like Section 111 is so an agency can respond, appropriately and commensurately, to new and big problems.” Congress did not think it could anticipate every environmental problem that could be caused by air pollution, which is precisely why it delegated the authority to address unexpected problems to the EPA.
Indeed, environmental regulation is a classic example of why Congress’s authority to delegate should be deferred to rather than subjected to ad hoc rules created by the federal judiciary. Environmental science is not a static field. There are frequently new findings about the effects of various environmental hazards and new technologies for addressing these hazards in an economically feasible way. Even a highly functioning and efficient legislature filled with experts in environmental science and economics would not be able to issue specific regulations reflecting new evidence and technological developments, and the actually existing, frequently gridlocked Congress meets neither of these conditions. This is why the longstanding practice is for Congress to set the goals and for the EPA to issue regulations commensurate with these goals, subject to oversight by elected officials in the legislative and executive branches.
The next major legal battleground over environmental regulations is likely to be the new clean air rules being proposed by the EPA. These proposals are also an excellent illustration of how the process should work. The federal agency charged by Congress with helping to preserve the environment is taking advantage of the latest scientific discoveries to update rules for the first time in more than a decade in order to protect Americans from being exposed to dangerous pollutants. A legal universe in which any new set of rules triggers litigation in front of hostile federal judges frustrates the goals Congress sought to accomplish by establishing the EPA.
Indeed, the reason Republican judges are targeting this system is not because it doesn’t work, but because it does. When it invokes newly-minted rules like the “major questions” doctrine, the Court claims to be upholding the prerogatives of Congress. But it is easy to see that this is disingenuous ruse. As University of Texas Law professor Steve Vladeck points out, “*no* Congress will ever have the *capacity* to regulate across every issue with the specificity that "major questions" requires. It's not pro-democracy; it's anti-regulation.” West Virginia v. EPA does not reflect a desire to uphold the authority of Congress; it reflects the Republican Party’s hostility to environmental regulation.
It is true that other approaches taken by Congress may be less likely to face judicial hostility. The major climate provisions in the Inflation Reduction Act generally rely on direct federal spending, which is less likely to provoke a negative response from the judiciary. It would be premature to conclude there will be no effective legal challenges to these climate provisions, but generally clean energy spending is less likely to be struck down than new regulations. But while if this situation holds it gives Congress some leeway to establish some climate goals, it would not be sufficient. Protecting the environment and combating climate change requires the regulation of polluters, not just spending on clean energy.
And this is what makes West Virginia v. EPA such an ominous precedent. Even if a Democratic Congress and Democratic president of the future could overcome a Senate tilted in favor of fossil fuel-producing states and pass an updated Clean Air Act that more clearly authorized the EPA to regulate carbon emissions, it is not clear how they could overcome the obstacle of a Supreme Court that is both hostile to environmental regulation and willing to engage in bad faith readings of statutes to get its way. When Congress updated the Voting Rights Act to reject the narrow interpretation of its anti-discrimination provisions advanced by the Reagan administration, the Roberts Court just willfully misread the statute as if Reagan (and his lead Department of Justice spokesperson on the issue, John Roberts) had actually won the initial fight.
As long as conservatives control the Supreme Court, environmental regulators won't be allowed to do their jobs.
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Rob and Jesse talk with former Ford economist Ellen Hughes-Cromwick.
Over the past 30 years, the U.S. automaking industry has transformed how it builds cars and trucks, constructing a continent-sized network of factories, machine shops, and warehouses that some call “Factory North America.” President Trump’s threatened tariffs on Canadian and Mexican imports will disrupt and transform those supply chains. What will that mean for the automaking industry and the transition to EVs?
Ellen Hughes-Cromwick is the former chief economist at Ford Motor Company, where she worked from 1996 to 2014, as well as the former chief economist at the U.S. Department of Commerce. She is now a senior visiting fellow at Third Way and a senior advisor at MacroPolicy Perspective LLC.
On this week’s episode of Shift Key, Rob and Jesse chat with Ellen about how automakers build cars today, why this system isn’t built for trade barriers, and whether Trump’s tariffs could counterintuitively help electric vehicles. Shift Key is hosted by Jesse Jenkins, a professor of energy systems engineering at Princeton University, and Robinson Meyer, Heatmap’s executive editor.
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Here is an excerpt from our conversation:
Jesse Jenkins: I hear often that we’re also sending parts back and forth as well — that particularly near the border with Canada, we have manufacturing parts suppliers on both sides of the border. So it’s not just the final car, it’s also pieces of the car going back and forth. How does stuff move around in this sort of complicated trade network between, Canada, the U.S., and Mexico?
Ellen Hughes-Cromwick: There is a lot of back and forth, and as you mentioned, a lot of the automotive analysts track the travel of not just the vehicles, but the parts. And the latest estimates show that in some cases, we’re going back and forth across the Ambassador Bridge here in Detroit, you know, six, eight times.
So when you say all of a sudden, as of tomorrow, I’m going to put a 25% tariff on that — I mean, that basically shutters businesses. You can’t absorb a 25% hit, especially if it’s a part or an assembled vehicle. Part of that 25% you could probably absorb, but for the thin margins that parts suppliers work for day in and day out, I mean, there’s just no way. You’re better off shuttering your business. I hate to say that, but you know, you just can’t make the equation work, with a 25% hit.
Jenkins: So this is hypothetical structure, I don’t know if this is exactly right, but so you might have engine parts manufactured in Michigan being sent to Windsor, Ontario to assemble an internal combustion engine. And then it goes back to a plant somewhere else in the U.S. to be assembled into a vehicle. Maybe you get the glass from somewhere for the windows, you know, these are all moving back and forth on a regular basis after so many years of free trade agreements between the two countries, or the three.
Hughes-Cromwick: That’s right. That’s right. And again, coming back to Michigan, because we’re so close to the suppliers in Canada, and we have the lion’s share of automotive suppliers, especially small and mid-size suppliers — so the tier two, tier three. They’re supplying to a tier one big supplier like Magna or Borg.
So you’ve got a lot of these tier two, tier three suppliers in Michigan. Well, why? Because they’re getting a part from a Canadian supplier, putting it into theirs. And maybe that’s a component that goes into an internal combustion engine that’s being produced.
This episode of Shift Key is sponsored by …
Download Heatmap Labs and Hydrostor’s free report to discover the crucial role of long duration energy storage in ensuring a reliable, clean future and stable grid. Learn more about Hydrostor here.
Music for Shift Key is by Adam Kromelow.
For now at least, USAID’s future looks — literally — dark.
Elon Musk has put the U.S. Agency for International Development through the woodchipper of his de facto department this week in the name of “efficiency.” The move — which began with a Day One executive order by President Trump demanding a review of all U.S. foreign aid that was subsequently handed off to Musk’s Department of Government Efficiency — has resulted in the layoff or furloughing of hundreds of USAID employees, as well as imperiled the health of babies and toddlers receiving medical care in Sudan, the operations of independent media outlets working in or near despotic regimes, and longtime AIDS and malaria prevention campaigns credited with saving some 35 million lives. (The State Department, which has assumed control of the formerly independent agency, has since announced a “confounding waiver process … [to] get lifesaving programs back online,” ProPublica reports.) Chaos and panic reign among USAID employees and the agency’s partner organizations around the globe.
The alarming shifts have also cast enormous uncertainty over the future of USAID’s many clean energy programs, threatening to leave U.S. allies quite literally in the dark. “There are other sources of foreign assistance — the State Department and the Defense Department have different programs — but USAID, this is what they do,” Tom Ellison, the deputy director for the Center for Climate and Security, a nonpartisan think tank, told me. “It is central and not easily replaced.”
In addition to “saving and improving lives around the world in an altruistic sense,” USAID has “a lot of benefits for U.S. national interests and national security,” Ellison went on. Though USAID dates back to the Cold War, its Power Africa initiative launched under President Barack Obama in 2013, and energy investment projects around the world followed. Of its $42.8 billion budget request for 2025, the agency had earmarked $4.1 billion for global infrastructure and investment programs, including energy security and excluding its additional targeted energy investment in Ukraine.
Some of these benefits are immediate and obvious. For example, USAID invested $422 million in new energy infrastructure in Ukraine, including more than a thousand generators and a solar and battery storage project, all to brace against Russia’s weaponized flow of fossil fuels. (USAID was also reviewing the deployment of Musk’s Starlink Satellite Terminals to the Ukrainian government prior to his gutting of the agency, per The Lever.)
But USAID is in the power business for other strategic reasons, too. USAID initiatives such as assisting Georgia and Kosovo in running their first renewable energy auctions help to secure energy stability and independence among countries where Russia is trying to gain sway. By the same token, rural electrification efforts in Africa help the U.S. remain a leader on the continent even as China is looking to make inroads. “China’s infrastructure and assistance programs around the world, like the Belt and Road Initiative — they consider that very explicitly a lever to peel U.S. allies away,” Ellison said. “Russian propagandists are already cheering the potential shutdown of USAID or a cut to their programs, for those reasons.”
Likewise, USAID has also rolled out energy projects in Indonesia, helping to deploy rooftop solar plants at airports and investing $200 million into a geothermal plant and two hydropower plants. Such efforts in the Indo-Pacific “pay dividends in strengthening relationships with allies and partners critical to that competition with China,” the Council on Strategic Risks, the parent institute of the Center for Climate and Security, wrote in a memo Tuesday.
That’s part of what makes the USAID whiplash so severe. Not only is the concern and uncertainty of the agency’s shutdown in complete opposition to the administration’s purported goal of “efficiency,” but Trump’s knee-jerk reaction to anything that suggests the idea of a U.S. handout — much less one that includes programs explicitly addressing “climate change” — runs counter to his stated goals of protecting U.S. troops and national security interests. USAID programs “are very cost-effective investments in terms of being a cent or less on the U.S. taxpayer dollars,” Ellison told me. “They’re paying for themselves over and over again in terms of humanitarian or military spending averted in the future.”
The American Clean Power Association wrote to its members about federal guidance that has been “widely variable and changing quickly.”
Chaos within the Trump administration has all but paralyzed environmental permitting decisions on solar and wind projects in crucial government offices, including sign-offs needed for projects on private lands.
According to an internal memo issued by the American Clean Power Association, the renewables trade association that represents the largest U.S. solar and wind developers, Trump’s Day One executive order putting a 60-day freeze on final decisions for renewable energy projects on federal lands has also ground key pre-decisional work in government offices responsible for wetlands and species protection to a halt. Renewables developers and their representatives in Washington have pressed the government for answers, yet received inconsistent information on its approach to renewables permitting that varies between lower level regional offices.
In other words, despite years of the Republican Party inching slowly toward “all of the above” energy and climate rhetoric that seemed to leave room for renewables, solar and wind developers have so far found themselves at times shut out of the second Trump administration.
ACP’s memo, which is dated February 3 and was sent to its members, states that companies are facing major challenges getting specific sign-offs and guidance from the Army Corps of Engineers, which handles wetlands permits, as well as the Fish and Wildlife Service, our nation’s primary office for endangered species and migratory bird regulation.
Federal environmental protection laws require that large construction projects — even those on state and private lands — seek direction from these agencies before building can commence. Wetlands permitting has long been the job of the Army Corps, which determines whether particularly wet areas are protected under the Clean Water Act. Wetlands have historically been a vector for opponents of large pipelines and mines, as such areas are often co-located with sensitive ecosystems that activists want to preserve.
Fish and Wildlife, meanwhile, often must weigh in on development far from federal acreage because, according to the agency, two-thirds of federally listed species have at least some habitat on private land. FWS also handles the conservation of bird species that migrate between the U.S. and Canada, which are protected under the Migratory Bird Treaty Act. Any changes to federal bird consultation could impact wind developers because turbine blades can kill birds.
Now, apparently, all those important decision-makers are getting harder to read — or even reach. Army Corps district activity has become “widely variable” and is “changing quickly,” per the memo, with at least two districts indicating that for “wind or solar projects” they “will not be issuing any JDs,” meaning jurisdictional determinations for federally protected wetlands — that is, they won’t even say whether federal wetlands are present at a construction site or not. According to the Army Corps, receiving a JD is optional, but it is nevertheless an essential tool for developers trying to avoid future legal problems in the permitting process.
In addition, emails from staff in FWS’ migratory birds protection office now apparently include a “boilerplate notice” that says the office “is unable to communicate with wind facilities regarding permitting at this time.”
Usually, renewables developers just get a simple go-ahead from the government saying that they don’t have wetlands or bird nests present and that therefore work can begin. Or maybe they do have one of those features at the construction site, so guardrails need to be put in place. Either way, this is supposed to be routine stuff unless a project is controversial, like the Keystone XL pipeline or Pebble Mine in Alaska.
It’s not immediately clear how solar and wind developers move forward in this situation if they are building in areas where wetlands or protected species even may be present. Violating wetlands and species protection laws carries legal penalties, and with the Trump administration arranging itself in such an openly hostile fashion against renewables developers, it’s probably not a good idea to break those laws.
Unfortunately for industry, the ACP memo describes a confusing state of affairs. “Written guidance from ACOE [Army Corps of Engineers] to industry has been expected but members have not seen it yet. Actions and communications from regional districts appear to be guided by internal ACOE emails,” the document states. Staffing within the Army Corps is “uncertain” due to questions over whether money from the Inflation Reduction Act — which provided funds to hire permitting personnel — will be “available to continue funding staff positions in some offices,” or whether permitting staff will take the administration’s voluntary resignation offer, which the memo claims “is apparently still actively being pushed on staff with emails.”
Meanwhile, at Fish and Wildlife, ACP’s members “have indicated some staff are still taking phone calls and responding to emails to answer questions, while others are not.”
As with a lot happening in the early era of Trump 2.0, much of the permitting mess is still unclear. We don’t know who is behind these difficulties because there have been no public policy or guidance changes from the Army Corps or Fish and Wildlife. Trump did order agencies to stop issuing “new or renewed approvals” for wind projects shortly after entering office, but the ACP memo describes something altogether different: agency staff potentially refusing to declare whether an approval is even necessary to build on state or private lands.
Another example of how confusing this is? Interior had issued a 60-day pause on final decisions for solar projects, but the Army Corps isn’t under Interior’s control — it’s part of the Defense Department.
It’s also unclear if the contagion of permitting confusion has spread to other agencies, such as the Federal Aviation Administration, which we previously reported must regularly weigh in on wind turbines for aviation safety purposes. As I reported before Inauguration Day, anti-wind activists urged the Trump administration to essentially weaponize environmental laws against wind energy projects.
ACP didn’t respond to a request for comment. I also reached out to the Army Corps of Engineers and Fish and Wildlife Service, so I’ll let you know if and when I hear back from any of them.