Page 28 - October 19-November 1, 2022 Law & Accounting WORLDWIDE LOCATIONS United States Europe, Middle East Asia, Latin America Greenberg Traurig is a service mark and trade name of Greenberg Traurig,LLP and Greenberg Traurig,P.A.©2022 Greenberg Traurig, LLP. Attorneys at Law. All rights reserved. Attorney Advertising. °These numbers are subject to fluctuation. 37090 GREENBERG TRAURIG, LLP | 2500 AT TORNEYS | 43 LOCATIONS WORLDWIDE ° 1144 15th Street | Suite 3300 Denver, CO 80202 | 303.572.6500 GTL AW.COM GT Denver’s Real Estate Team Christopher Neumann Katy O’Brien Neil Oberfeld Keith Pockross Carlos Schidlow Paul Seby Christopher Thorne Matthew Tieslau Mark Baker Alex Cain Stephen Goler Peter Kelley Brady McShane Our goal is to provide more than just legal services to our clients. We aim to be a partner to clients, supporting their business objectives through innovative legal offerings in the real estate sector. I n 2015, the Obama-Era Environmental Protection Agency promulgated the Clean Power Plan, a first-of-its-kind rule by which EPA sought to regulate and reduce coal and natural gas-fired power plants’ carbon dioxide emissions from across the national generation system. Relying on the 2007 U.S. Supreme Court holding in Mas- sachusetts v. EPA, which found that carbon dioxide is a pollutant within the meaning of the Clean Air Act and for the first time directed EPA to regulate it, the CPP vested EPA with the abil- ity to regulate carbon emissions from both new power plants and existing power plants pursuant to Section 111(d) of the act. The CPP has since been aban- doned; it was replaced by the Trump-era Affordable Clean Energy Plan, which was later abandoned by the Biden admin- istration. n The court’s decision. None- theless, the U.S. Supreme Court recently held in West Virginia v. EPA that Congress did not grant EPA with authority to devise and implement systemwide emis- sions limits under Section 111(d) of the act. Rather, according to West Virginia, Congress’ intent under the act vested EPA with the authority to set emissions limits on an individual source basis. In other words, the court held that the CPP e x c e e d e d the author- ity granted to EPA via the Clean Air Act by seeking to regulate the nation’s g e n e r a t i o n system – reg- ulation that likely would have involved measures such as fed- eral cap and trade policies. These measures would encourage a shift away from coal (and to a lesser extent, natural gas) in favor of advanced energy and renew- able sources like wind and solar. In so holding, the court relied on the major questions doctrine, which requires that Congress must clearly authorize admin- istrative agency action when that regulation action involves matters of “vast economic and political significance” – such as climate change regulation – and particularly where that agency action would be novel. The EPA was clear in its prom- ulgation of the CPP that the plan’s intent was to “improve the overall power system” rather than the emissions performance of individual power plants. While this holding represents a setback to EPA’s ability to regu- late carbon dioxide as a pollut- ant from existing power plants, the act still requires the EPA to set standards for existing power plants, as long as the new pollu- tion reduction system does not mandate a shift in generation technologies to advanced energy. Congress could (explicitly and specifically) expand EPA’s authority to more closely match that sought in the CPP, though doing so in the near term would require consideration and adop- tion of new legislation by both chambers as well as by the exec- utive branch, all in a time of fiscal uncertainty and volatility. Potentially more troubling, however, is the precedent West Virginia may set. The West Vir- ginia court relied on the major questions doctrine, and in so doing the court may be opening a door to review, revision and rescission of other regulations. The effects of West Virginia are likely to extend beyond federal climate policy and chemical reg- ulation. Going forward, expect all federal agencies to show that their actions are supported by clear, express congressional authority, particularly where their regulatory actions might be viewed as yielding “vast eco- nomic and political significance,” where the agency is taking novel action, or where Congress has tried, but failed, to authorize the agency action at issue. Similarly, the effect of West Vir- ginia will be felt at state and local levels, though perhaps in a less direct fashion. Federal inaction or inability to act has long been a reasonable vehicle to fuel state action. n Making local economies greener. In the greenhouse gas reduction and climate change mitigation space, states can, have and will continue to take a vari- ety of novel steps to decarbonize regional economies. An increasing number of states, for instance, have adopted aggressive goals to reduce green- house gas emissions and curb their impact on the environment. Seven states as well as Puerto Rico and Washington, D.C., have legislatively committed to reach- ing 100% clean electricity genera- tion by 2050, while another eight states have set similar, though nonbinding, goals. State zero-emission building mandates may be another area of increased focus in the com- ing years. States have realized they can drive significant build- ing decarbonization by expand- ing energy-efficiency resource standards. These standards gen- erally provide between $2 and $5 in economic benefits for each dollar invested to decarbonize, and these investments can take a variety of forms: energy-efficient windows, doors and installation; solar or wind-fueled applianc- es (and related infrastructure); and new heaters that provide heat via water or air sources as opposed to gas. Businesses should expect that each of these steps, if and when adopted, would require new regulatory structuring at util- ity levels as well as infrastruc- ture investment and expansion. Subsidization of energy-efficient building equipment and appli- ances would be a critical aspect. n Conclusion. Given the administrative restrictions sig- naled by the Supreme Court in West Virginia and the potential expanded use of the major ques- tions doctrine as one means to limit novel federal agency action, as well as challenges inherent in congressional action of this mag- nitude, businesses and citizens should expect states to increas- ingly take steps to independent- ly address carbon pollution via energy efficiency subsidization and encouragement of advanced energy technology adoption. This will be of major importance to real estate developers in Colo- rado and beyond. s W. Virginia : Commercial, economic impacts & implications Christopher W. Scolari Attorney, Moye White LLP