EPA Regulations To Reduce Cross-State Air Pollution Vacated Again

Previously published by New York Law Journal, October 25, 2012.

On Aug. 21, 2012, the U.S. Court of Appeals for the D.C. Circuit vacated the most recent regulation adopted by the U.S. Environmental Protection Agency (EPA) to reduce cross-state air pollution from the electric generating sector. The purpose of the regulation was to aid downwind states in achieving attainment of the National Ambient Air Quality Standards (NAAQS) for ozone and fine particulate matter under the Clean Air Act (CAA).

In a 2-1 decision, the D.C. Circuit held that EPA exceeded its statutory authority in adopting the Cross-State Air Pollution Rule (CSAPR or Transport Rule) because (a) the rule would require some upwind states to reduce emissions by more than the states' contribution to air quality exceedances—e.g., ambient air quality that exceeds National Ambient Air Quality Standards—in downwind states (the "good neighbor" provision)1 and (b) the rule denied states the first opportunity to develop regulations to be incorporated into State Implementation Plans (SIPs) to address precursors to ozone and fine particulate emissions in neighboring states prior to EPA's imposing Federal Implementation Plans (FIPs) on each state. See EME Homer City Generation v. EPA, 2012 WL 3570721 (D.C. Cir. Aug. 21, 2012).

The Transport Rule

On July 6, 2011, EPA adopted CSAPR to replace the Bush Administration's Clean Air Interstate Rule (CAIR), which the D.C. Circuit had found unlawful in 2008.2 CSAPR was intended to address the deficiencies identified by the D.C. Circuit in CAIR and would have required 27 states to improve air quality by reducing power plant emissions that contribute to ozone and fine particulates in other states (referred to as the CAA's "good neighbor" provision). Emission reductions were to take effect on Jan. 1, 2012, for sulfur dioxide and annual nitrogen oxide (NOx) emissions, and May 1, 2012, for ozone season NOx emissions.3

'EME Homer City Generation'

Judge Brett Kavanaugh, joined by Judge Thomas Griffith, found that CSAPR violated EPA's statutory authority to implement the good neighbor provision in three different ways. First, the court found that the emissions reduction requirement imposed on upwind states was disproportionate to each upwind state's actual contribution to downwind air quality. Under EPA's method, EPA would first determine if the upwind state was subject to the good neighbor provision by examining whether the state contributed at least a certain threshold amount to air pollution in the downwind state, which the court referred to as the "floor." Pollution below this threshold was not considered a "significant contribution" to the downwind state's nonattainment by...

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