Supreme Court's Chevron decision opens up an entire new world

Supreme Court's Chevron decision opens up an entire new world

The U.S. just set sail into a new era of climate and environmental policy.

Why it matters: A Supreme Court ruling Friday constrains what the Beltway's vast bureaucracies can do without detailed instruction from Congress.

🏃🏽‍♀️ Catch up quick: The conservative majority ended "Chevron deference" — the 40-year-old doctrine that gave regulators a wide berth when underlying laws are ambiguous.

• It follows a 2022 ruling that already curtailed executive running room on "major questions" absent clear Capitol Hill marching orders.

Here's a field guide to this new world ...

📄 It puts more weight on the IRA. White House climate policy is a carrots-and-sticks approach — the 2022 climate law offers huge subsidies for low-carbon energy, while regulations are the stick.

• Now the power to effectively force energy companies, automakers, manufacturers and more to curb pollution has been reduced — unless Congress steps in.

🏭 Meeting U.S. climate goals got harder. The ruling means even more legal peril for recent EPA rules on power plants, cars, and more, analysts say.

• "The power plant rule is now more likely than ever to be stayed or overturned — just in time to assist construction of new power plants to meet data center demand," Capital Alpha Partners' James Lucier said in a note.
• The "Chevron" ruling and the 2022 decision will play into challenges to other agencies' efforts, such as SEC climate disclosure rules.
• Going forward, it will likely be harder to write new climate rules based on the nation's bedrock environmental laws, which are decades old.

⚖️ The balance of power changed a lot. It "authorizes a more muscular posture by the judiciary when reviewing decisions of administrative agencies," said Cary Coglianese, a UPenn law school expert on regulations, in a statement.

• It's hard to imagine given Capitol Hill's polarization, but down the line the ruling could help spur revisions to decades-old environmental laws.
• "Arguably, the effective removal of Chevron deference from power regulations may improve the chances for more mainstream congressional activity to fill the void," Scott Segal, a partner at Bracewell LLP who represents energy companies, tells Axios.

✍️ Agencies have new homework assignments. The two rulings will force bureaucratic officials to operate under very different parameters.

• "If I were making a new rule today I would seek to document and clarify the extent to which the central aspects of the rule are tied to factual, technical, and policy determinations," said Michael Burger, executive director of Columbia University's Sabin Center for Climate Change Law.
• "I would spend a lot less time offering legal rationales for why the decision represents a reasonable or permissible interpretation of an ambiguous statute," he said via email.

💼 Lobbying just changed, too. Major business groups like the U.S. Chamber of Commerce joined conservative activists in urging SCOTUS to nix "Chevron."

• Now, business lobbyists and lawyers hope to influence the shape of future regulations in the post-Chevron world.
• U.S. Chamber CEO Suzanne P. Clark, in a statement, said the powerful group would "urge courts to faithfully interpret statutes that govern federal agencies and to ensure federal agencies act in a reasonable and lawful manner."
• Leah Dempsey of the firm Brownstein Hyatt Farber Schreck tells Politico the ruling will "create a lot more work for trade associations, K Street and law firms."

The bottom line: Washington is waking up to a new world.

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