US Supreme Court decides AEP

On Monday, June 20, 2011, the US Supreme Court issued its decision in American Electric Power Co., Inc. v. Connecticut. The Supreme Court reversed the Second Circuit Court of Appeals and held that the Clean Air Act displaces any potential claim under federal common law to restrain emissions of greenhouse gases. The Supreme Court remanded the case back to the lower courts to decide whether the plaintiffs (a group of states and private land trusts) could sue for the same relief -- a cap on GHG emissions by large power companies -- under state nuisance law. The opinion did not take any position on that issue, but it was clear that at least some members, and perhaps all, of the Court would be skeptical of any claim that judges should determine GHG emissions. The decision was unanimous, with Justice Sotomayor recusing herself because she had participated in the Second Circuit decision below.

The upshot of this opinion is that it will increase the impetus for EPA to pursue comprehensive GHG regulation, even in the absence of further federal legislation. The Court made it clear that EPA is the agency charged under current federal law with regulation of GHGs, and that "[i]t is altogether fitting that Congress designated an expert agency . . . as best suited to serve as primary regulator" of GHG emissions. The Court explained that any EPA decision not to regulate GHG emissions would be subject to judicial review, and ultimately would end up back in the Supreme Court.

--Morgan

More on Judge Goldsmith's ruling and its impact

As the New York Times notes in this article, Judge Goldsmith's ruling is just part of a national retreat from a cap-and-trade approach.

--Morgan

GHG Regs

The most effective enemy of the California Cap-and-Trade regulations is turning out to be the environmental community. First, environmental groups sued to stop the California Air Resources Board from promulgating the cap-and-trade regulation without a further CEQA analysis -- and won. Now, the Sierra Club has asked Governor Brown to re-assess cap-and-trade. So many cliches come to mind, it's hard to know where to start: with friends like these, who needs enemies, don't let the perfect be the enemy of the good, don't throw the baby out with the bath water, etc., etc. Whatever one's view of cap-and-trade, it seems obvious that without a successful AB 32 program in California, national action on climate change is far less likely. Thus, it's strange to see environmentalists lining up in opposition.