Environmental Law - Clean Air Act - D.C. Circuit Rejects EPA'S Attempt to Quantify and Implement Interstate Air Pollution Reductions
The Clean Air Act (1) (CAA) embodies "cooperative federalism," (2) an arrangement in which the federal government sets national air quality standards while the states enforce those standards. (3) But the allocation of state and federal responsibilities blurs in the context of interstate air pollution. The Environmental Protection Agency's 2011 Transport Rule (4) quantified upwind states' "significant contribution[s]" to downwind air quality problems and implemented a federal program to achieve the necessary emissions reductions. (5) Recently, in EME Homer City Generation, L.P. v. EPA, (6) the D.C. Circuit vacated and remanded the Transport Rule, holding that the Rule (1) improperly required upwind states to reduce emissions by more than the amount necessary to prevent their own significant contributions to nonattainment downwind and (2) improperly gave the federal government rather than the states the first opportunity to implement those reductions. (7) While the panel was correct in its first holding, the reasoning underlying its second holding was flawed. In looking past the plain text of the statute, the court overstated the absurdity of the EPA's interpretation of the CAA and applied the Act's "federalism bar" (8) too rigidly.
Under the CAA, the EPA sets National Ambient Air Quality Standards (NAAQS), which establish minimum allowable concentrations of certain air pollutants. (9) Each state then has "primary responsibility" (10) for achieving these NAAQS by promulgating State Implementation Plans (SIPs) designed to cut in-state emissions. (11) If a state fails to submit an adequate SIP by the statutory deadline, the EPA must promulgate a replacement Federal Implementation Plan (FIP). (12) Because certain pollutants cross into downwind states, (13) the CAA's "'good neighbor' provision" (14) requires that SIPs prevent in-state emissions that "contribute significantly to nonattainment in ... any other State." (15)
The EPA has had mixed success implementing the good neighbor provision. In Michigan v. EPA, (16) the D.C. Circuit upheld the Agency's use of cost considerations to reduce an upwind state's good neighbor obligations. (17) But eight years later, in North Carolina v. EPA, (18) the D.C. Circuit rejected the EPA's Clean Air Interstate Rule (19) (CAIR), holding that while cost considerations could reduce each state's good neighbor obligation, they could not increase a state's obligations beyond the state's individual contribution to downwind nonattainment. (20) Rather than vacate CAIR, the court ultimately left it in place as a backstop while the EPA devised a new rule. (21)
The EPA finalized CAIR's replacement, the Transport Rule, in 2011. The Rule first designated as significant contributors all those upwind states whose individual emissions contributed at least one percent of the NAAQS pollutant concentration in downwind nonattainment areas. (22) The EPA then quantified each significant contributor's "significant contribution" based on multi-state regional emissions modeling, taking the cost of reducing emissions into account. (23) Significant contribution quantities were based on the emissions a state could eliminate at a designated, cost-effective cost-perton threshold for its region. (24)
The states that the EPA had deemed to be significant contributors had already submitted SIPs to achieve the NAAQS for ozone and fine particle pollution, but those SIPs failed to address adequately the Transport Rule's newly quantified good neighbor requirements. (25) Accordingly, the EPA promulgated replacement FIPs in the Transport Rule. (26) The FIPs would go into effect immediately, but the states could submit replacement SIPs. (27) Various state and local governments and industry groups petitioned the D.C. Circuit for direct review of the Transport Rule, (28) and the court stayed the Rule pending a decision on the merits. (29)
A divided panel of the D.C. Circuit vacated and remanded the Transport Rule for exceeding the EPA's authority under the CAA. …