The U.S. Supreme Court’s Chevron Deference Ruling Will Disrupt Climate Policy

Alice Hill is the David M. Rubenstein senior fellow for energy and the environment at the Council on Foreign Relations.

Forty years ago, U.S. Supreme Court justices articulated what has become known as the Chevron deference doctrine, ruling that judges must defer to a federal agency’s “reasonable” interpretation of an ambiguous statute. Since then, federal courts have applied Chevron deference in thousands of cases. The June 2024 Supreme Court decision in Loper Bright Enterprises v. Raimondo upends this long-standing precedent, shifting power from federal agencies to the courts when it comes to interpreting ambiguous statutes. 

With this and other recent decisions, the Supreme Court has likely tilted the scales against federal agency action on climate change. Congress has passed few statutes directly addressing the climate challenge, leaving federal agencies to fill the vacuum by interpreting ambiguous statutes, some of which date from the 1970s, long before climate change was in the national discourse.

How does the ruling change regulatory policy?

Conservatives and business interests have for years sought to end Chevron deference, claiming that it gives federal agencies power that should instead rest with the courts. At the end of this year’s term, the current Supreme Court tossed deference aside. The majority opinion in Loper Bright holds that where a statute is ambiguous, judges need not and, in fact, cannot defer to an agency’s interpretation of the law. The courts can consider the agency’s view, but they themselves must determine the “best interpretation” of a statute. 

The Supreme Court has thus empowered judges to determine statutory meaning even when they lack any relevant technical, scientific, or policy expertise. Justice Elena Kagan predicted in her dissenting opinion that the majority’s decision “will cause a massive shock to the legal system.” The case will likely lead to greater litigation with more challenges to agencies’ decisions on areas from air pollution to workplace safety to nursing home staffing.

Within days of the decision, law firms jumped on what they saw as a business-generating opportunity. Hogan Lovells, one of the largest law firms in the United States, has advised clients to consider challenging existing rules, opining that the odds are with them. It has also recommended that parties shop for appellate courts more receptive to their arguments.

How will the ruling affect the U.S. response to climate change? 

It is unwelcome news for the climate and environment. The ruling will likely constrain federal agencies from regulating and spawn numerous litigation that could delay regulatory implementation. The ruling could also result in courts invalidating more environmental regulations. 

Environmental Protection Agency (EPA) Administrator Michael Regan anticipates that the Loper Bright decision will hit the agency “extremely hard,” he told the House Oversight and Accountability Committee in July. According to legal experts, the decision will likely yield more legal challenges to EPA actions, even past ones. Some EPA regulations rest on interpretations of older statutes, such as the Clean Air Act, originally passed by Congress fifty years ago. However, these statutes lack explicit authorization to address more contemporary issues such as climate change.

Besides the EPA, Loper Bright also affects whether other agencies can regulate and reduce environmental harm. Mere hours after the Supreme Court issued its decision, plaintiffs sought to raise the issue in a case that seeks to invalidate a Labor Department rule permitting fiduciaries to consider climate risk. Other agency actions ripe for attack include the proposed Securities and Exchange Commission (SEC) climate disclosure rules and the Federal Energy Regulatory Commission’s order that gave states more say on transmission lines.

Even actions taken pursuant to the Inflation Reduction Act, the Joe Biden administration’s signature climate law, could fall in litigation where the statute is ambiguous. According to an analysis by Cass Sunstein—a leading administrative law expert cited in both the majority and dissenting Loper Bright opinions, as well as in Justice Neil Gorsuch’s concurring opinion—Loper Bright could lead to both a “non-trivial” increase in courts invalidating environmental protection measures and a “significant increase in ideological divisions in the lower courts.”

But it’s not Loper Bright alone that could constrain federal agency climate action. Other recent Supreme Court decisions regarding administrative action, in West Virginia v. EPA and Corner Post, Inc v. Board of Governors of the Federal Reserve System, have introduced additional avenues for litigation and thus uncertainty. The 2022 West Virginia majority opinion ruled that agencies lacked the authority to regulate issues involving areas of significant economic or political import without specific congressional direction. Under Corner Post, a decision issued just days after Loper Bright, newly created businesses can now challenge long-standing regulations. 

Increased litigation of climate regulation brings a significant risk of delaying efforts to address the climate threat. According to the United States’ Fifth National Climate Assessment, a congressionally mandated report issued in November 2023, climate efforts to date have been insufficient. However, the report writes, actions taken now to reduce each increment of warming can still lessen harmful climate impacts, including deeper droughts, more intense storms, longer heat waves, and accelerating sea-level rise. In particular, the assessment urges “rapid and deep reductions” in heat-trapping pollution, noting that the benefits of such actions will likely far exceed the costs.

Is Congress likely to provide more clarity on climate and environmental policies?

Congressional reactions to the recent Supreme Court rulings have fallen along party lines. Democratic members of Congress have introduced the Corner Post Reversal Act and the Stop Corporate Capture Act to negate the Loper Bright and Corner Post decisions. Meanwhile, Republicans have proposed the Sunset Chevron Act to force the sunset of federal rules upheld by courts on Chevron deference grounds. It is unlikely that Congress will take up any of this legislation before the end of the year. Republican lawmakers have also asked federal agencies, including the EPA, to identify which Biden administration regulations could be affected by Loper Bright.

The demise of Chevron deference increases pressure on Congress to assume a role it has not played for many years, requiring members and their staff to create legislation covering issues in which federal agencies have deep expertise. To meet the challenge, Congress could hire more experts or increase reliance on lobbyists (with their own vested interests) to help draft legislation.

How might this ruling affect U.S. diplomacy on climate and environmental issues?

Chevron’s reversal makes it more difficult for the United States to assure international partners of its promises to reduce greenhouse gas emissions. Some of the major climate levers constructed by the Biden administration—such as EPA rules on power plants and cars and SEC rules on climate disclosure—are vulnerable to judicial invalidation. The uncertain fate of such climate regulations raises new questions about U.S. commitment to addressing climate change. 

Foreign countries already view U.S. climate policy with skepticism. President Donald Trump withdrew the country from the Paris Agreement, the UN climate accord, in 2017. When Biden took office in 2021, the United States rejoined. The November presidential election thus presents high stakes for the country’s climate policy. And if Congress is the best hope for decisive climate action, worsening political polarization could further erode confidence in U.S. resolve. Furthermore, the Loper Bright decision will make it harder for any administration to make progress on reducing climate harm in cases where Congress fails to act. 

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What’s at stake if climate regulation stalls?

When it comes to the environment—and curbing climate change in particular—the United States does not have time to waste. Heat-trapping carbon in the atmosphere, primarily the product of humans burning fossil fuels for energy, is at the highest level in human history, close to 420 parts per million. The last time atmospheric carbon was this high was about three million years ago, when sea levels were about 16–82 feet (5–25 meters) higher than they are today.

If countries continue to meet growing energy demand mostly with fossil fuels, atmospheric carbon dioxide could reach eight hundred parts per million, levels not seen on the planet in close to fifty million years, when sea levels were hundreds of feet higher and palm trees grew in the Arctic. That level of pollution, and the heat that accompanies it, would have profound consequences for ecosystems, weather patterns, and human civilization. 

The United States is the largest source of emissions historically, the second-largest currently, the global leader in oil production, and the world’s largest economy, so its commitment to reducing greenhouse gas emissions matters not only for the health and well-being of Americans, but also that of the rest of the globe and future generations. If the United States does not act swiftly on reducing the climate threat, other countries have less incentive to do so themselves. 

The last decade has seen the ten hottest years on record, and 2024 promises to be even hotter. More extreme weather has accompanied those temperature increases, inflicting ever greater economic damage and human suffering. The world has no time to waste in curbing heat-trapping pollution. Recent Supreme Court decisions, however, have assured even greater delay. 

This work represents the views and opinions solely of the author. The Council on Foreign Relations is an independent, nonpartisan membership organization, think tank, and publisher, and takes no institutional positions on matters of policy.