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States, EPA Try to Tackle Interstate Air Pollution
Interstate air pollution has posed significant challenges for environmental regulators for decades. Although some air pollutants only affect air quality locally in the states where they are emitted, some emissions cross state lines and affect downwind states. EPA's latest effort to address interstate air pollution, the Cross-State Air Pollution Rule (CSAPR, often pronounced "Casper"), was invalidated Aug. 21, 2012, by the U.S. Court of Appeals for the District of Columbia. The decision in EME Homer City Generation, L.P. v. E.P.A. raises important legal and practical questions regarding EPA's approach to this important public policy issue.
Under the Clean Air Act, Congress has tasked EPA with addressing air pollution. Through cooperative federalism, the agency identifies criteria pollutants and sets national ambient air quality standards to protect public health and welfare. The states determine how to meet these standards by preparing State Implementation Plans (SIPs), which must be reviewed and approved by EPA. If a SIP fails to provide for adequate implementation, maintenance, and enforcement of these standards, EPA may impose and enforce a Federal Implementation Plan (FIP) against the state or it may impose a sanction on the state.
Interstate air pollution is addressed in the Good Neighbor provision of the Clean Air Act. It prohibits states from contributing significantly to nonattainment with these standards in other states or interfering with maintenance of attainment in other states. For nearly 15 years, EPA has attempted to use emissions trading to address interstate pollution under the Good Neighbor provision, and 1998 the agency persuaded 22 states to adopt a trading program to address interstate nitrogen oxides. But in 2005, EPA made mandatory the use of emissions trading to address interstate pollution through the Clean Air Interstate Rule (CAIR), which expanded the trading program to include 28 states and address sulfur dioxide as well. After several states challenged this rule in court, the D.C. Circuit Court invalidated it in North Carolina v. E.P.A in 2008, but it allowed the agency to continue administering the rule in the meantime because of the benefit of environmental protection it provided.
EPA's response was CSAPR, which it finalized in August 2011. To comply with the court decision, the agency employed modeling to determine each covered state’s specific contribution to downwind nonattainment and established for each state an individual budget that would eliminate its "significant contribution" to nonattainment. But, ultimately, emissions reductions were based on cost-effectiveness rather than these contributions.
The D.C. Circuit Court held that CSAPR exceeded EPA's statutory authority in several respects. First, the emissions reduction requirements imposed on upwind states were not based on their contributions to downwind pollution. Second, the rule made no attempt to calculate reduction requirements based on the proportionate contributions of all upwind states. Third, the reduction requirements created unnecessary "over-control" in downwind states by imposing requirements more than necessary to meet standards.
This decision has important implications. It is questionable whether EPA can implement the Good Neighbor provision through an emissions trading program as it has been struck down twice in this effort. The agency and environmental groups have petitioned the D.C. Circuit Court for a rehearing, and some members of Congress have discussed amending the Clean Air Act to address the problem.
The states have another remedy: Section 126 of the Clean Air Act allows individual states to file petitions with EPA to stop interstate air pollution. The agency may prevent industrial facilities from operating if it finds they are violating the Good Neighbor provision. In fact, it was a series of Section 126 petitions by northeastern states that led EPA to develop CAIR and CSAPR in the first place. While EPA has preferred the emissions trading approach to this injunctive approach, Section 126 may be the most effective legal tool available after the D.C. Circuit Court's decision. The question is how aggressively EPA would pursue it.
Christopher Ahlers is a Staff Attorney in the Environmental and Natural Resources Law Clinic, having previously been an LLM Fellow. He helps to manage projects in collaboration and partnership with the Toxics Action Center. Chris brings to the clinic more than 16 years of experience as an attorney, including work in environmental due diligence investigations, environmental auditing, enforcement actions, CERCLA litigation, and brownfields redevelopment. He also teaches a course in Air Pollution Law and Policy. He earned a BA in government from Cornell University (Phi Beta Kappa), a JD from Boston College Law School, and an LLM, summa cum laude, from the Environmental LLM program at Vermont Law School in 2013. He is a member of the New York and Vermont bars. He is fluent in French and proficient in Spanish, Latin, and Ancient Greek.
Will Bittinger, a second-year Vermont Law School JD student from Hanover, New Hampshire, is a staff editor at the Vermont Journal of Environmental Law (VJEL). Before attending VLS, he worked for U.S. Sen. Patrick Leahy, D-Vt., on the Senate Judiciary Committee, on President Obama's campaign, and at the Small Business Administration. He plans to practice business and energy law, and enjoys playing tennis and reading history books.