The climate-change agenda can survive the Supreme Court’s EPA ruling

Some background: In the latter part of the Obama Administration, the EPA proposed to regulate power plants through something it called the Clean Power Plan. The aim was not just to cut pollution on a plant-by-plant basis but to treat the power sector as a system. At the grid level, utilities would be required to shift some of their power production from coal to natural gas or renewables via a cap-and-trade system. This was a creative approach to reduce costs and hasten emissions reductions. But everyone was aware from the outset that there was a risk that courts would disapprove.

And indeed, the Supreme Court has now given the plan a definitive thumbs-down. After the court stayed the implementation of the Clean Power Plan in 2016, the rule never took effect. The Biden EPA had no plan of reviving it. But with its decision on Thursday, the court affirmatively rejected as outside the scope of the EPA’s authority both the plan and the systems-based approach it proposed.

This means that the EPA will have to implement simpler regulations on a plant-by-plant level. That’s a setback, but a lot can be achieved through such an approach. And more importantly, the path to decarbonizing the U.S. economy doesn’t look particularly different today than it did last week.

It will take some time for environmental lawyers to parse the nuances of this new decision to understand exactly where the limits on the EPA’s ability to regulate power plants lie. Some may worry that the current Supreme Court has enough skepticism about agency decisions that it will characterize nearly any aggressive regulatory move as too major for the executive branch to attempt on its own.

But that seems unduly pessimistic; the court gave a reasonably clear sense of what it objects to. The decision does not rule out the agency requiring that plants run more efficiently, burn cleaner fuel mixes or install equipment to capture carbon dioxide from exhaust. Such direct regulation may not achieve as much as a cap-and-trade system, but the cost of controlling carbon emissions via technology is improving as more projects are deployed.

The larger reality, however, is that success and failure at curbing climate change does not hinge on the scope of the EPA’s regulatory authority over power plants. Electricity generation accounts for 25 percent of U.S. greenhouse gas emissions and coal only half of power sector emissions. Recognizing the importance of other sectors, President Biden’s EPA has already written rules to reduce tailpipe emissions from cars and trucks, as well as methane emissions from oil and gas production.

Last year, Biden pledged that the United States would cut carbon emissions 50 percent by 2030. Such an ambitious goal, entirely justified as a waypoint on the road to climate safety, requires a major coordinated effort…