What Now? the Future of Epa Transport Programs Following Vacatur of the Cross-state Air Pollution Rule

• Publication year: 2012

NORTH CAROLINA JOURNAL OF LAW & TECHNOLOGY 14 N.C. J.L. & TECH. ON. 103 (2012)

WHAT NOW? THE FUTURE OF EPA TRANSPORT PROGRAMS FOLLOWING VACATUR OF THE CROSS-STATE AIR POLLUTION

RULE

Carla M. Gray*

Transport programs provide a means for the Environmental Protection Agency to regulate states’ emissions that endanger human health in neighboring areas. The Clean Air Interstate Rule and the Cross-State Air Pollution Rule are transport programs implemented under the authority of the good neighbor provision. However, the Court of Appeals for the District of Columbia Circuit remanded the Clean Air Interstate Rule without vacatur in December 2008, citing statutory infirmities. The court also vacated the Cross-State Air Pollution Rule in August 2012, citing improper reliance on the good neighbor provision. Now it is unclear whether the Environmental Protection Agency can create a new transport program in accordance with the court’s interpretation of the good neighbor provision. It is also unclear how grandfathering of sources and fuel switching might play a future role in emissions reductions.

1. INTRODUCTION‌

   Air quality has the capacity to dramatically affect quality of life and health. The presence of harmful air pollutants from industrial sources was first recognized through several national and international pollution-induced events that caused injury and death.1 One prominent event occurred in Los Angeles in the

   
   

   * J.D. Candidate, University of North Carolina School of Law, 2014

   1. See Origins of Modern Air Pollution Regulations, U.S. ENVTL. PROTECTION AGENCY, http://www.epa.gov/apti/course422/apc1.html (last updated Jan. 29,

      2010). From 1930 to 1952, four major pollution-induced events caused deaths in the following cities: (1) Meuse River, Belgium in 1930; (2) Donora,

      
      

      103

      
      

      1940s, when smog, known today as ground-level ozone,2 caused city residents to endure health problems such as eye, respiratory, and gastrointestinal symptoms.3 Recognizing that clean air was an important public health issue, President Nixon created the Environmental Protection Agency (“EPA”), and Congress passed the Clean Air Act that the EPA enforced in 1970.4 Within that Act, the EPA created National Ambient Air Quality Standards (“NAAQS”) to set levels for harmful air pollutants based on the public health and welfare.5 However, setting pollutant standards and enforcing compliance became problematic because air pollution can travel long distances once emitted into the air.6 This is because pollutants can adversely affect regions downwind of those polluted areas, and both polluted areas and their downwind neighbors can suffer air pollution problems and public health issues.7

      The transient nature of air pollution, primarily its interference with and encroachment in downwind states and regions, has presented a modern regulatory challenge for the EPA. Air transport can cause the regulation of a particular source, region, or state to be complex because pollution from particular sources may be difficult to quantify.8 The EPA’s regulation of air pollution and

      
      

      Pennsylvania in 1948; (3) Poza Rica, Mexico in 1950; and (4) London, England

      in 1952. Id.

   2. Patricia Ross McCubbin, Michigan v. EPA: Interstate Ozone Pollution and EPA’s “NOx SIP Call,” 20 ST. LOUIS U. PUB. L. REV. 47, 48 (2001).

   3. Origins of Modern Air Pollution Regulations, supra note 1.

   4. Id.

   5 See 42 U.S.C. § 7409(b)(1) (2006).

   1. See Control Emissions Technologies—Transport & Dispersion of Air Pollutants, U.S. ENVTL. PROTECTION AGENCY, http://www.epa.gov/apti/

      course422/ce1.html (last updated Jan. 29, 2010) (“Because of the factors responsible for the transport and dispersion of pollutants, air pollution produced

      in the United States Midwest can have adverse effects on lakes and forests in the

      East coast of the country.”).

   2. Id.

   3. See U.S. ENVTL. PROT. AGENCY, THE BENEFITS AND COSTS OF THE CLEAN

      AIR ACT FROM 1990 TO 2020 1-11 (2011), available at http://www.epa.gov/oar/ sect812/feb11/fullreport.pdf.

      
      

      transport provides one way that pollutants can be reduced and controlled, not just within a state, but also on a regional, multi-state level.9 Recognizing that clean air is a public good shared by all,10 Congress explicitly charged the EPA with the duty to regulate pollutants that cross state lines in the Clean Air Act Amendments of 1990.11 These important amendments first granted the EPA authority to regulate air pollution through two new statutes: the Acid Rain Program,12 the first transport program based upon a cap and trade approach, and 42 U.S.C. § 7410(a)(2)(D)(i)(I) of the Clean Air Act, otherwise known as the “good neighbor provision.”13 The good neighbor provision is used as the source of authority for more recently litigated transport programs.14

      The concept of a cap and trade program provides the foundation for how the Title IV Acid Rain Program15 and more recent transport programs operate.16 A cap and trade program is

      
      

   4. See generally Finding of Significant Contribution and Rulemaking for Certain States in the Ozone Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone, 63 Fed. Reg. 57,356 (Oct. 27, 1998)

      (codified at 40 C.F.R. pts. 51, 72, 75, and 96) (implementing the NOx SIP Call).

   5. Jonathan Baert Wiener, On the Political Economy of Global Environmental

      Regulation, 87 GEO. L.J. 749, 752 (1999).

   6. See Kati Kiefer, A Missing Market: The Future of Interstate Emissions Trading Programs After North Carolina v. EPA, 54 ST. LOUIS U. L.J. 635, 636

      (2010); see also Clean Air Act Amendments of 1990, Pub. L. No. 101-549, 104 Stat. 2399 (1990).

   7. See Clean Air Act Amendments of 1990 § 401.

   8. See infra pp. 13–14 and note 81.

   9. See North Carolina v. Envtl. Prot. Agency, 531 F.3d 896, 913 (D.C. Cir. 2008) (remanding the Clean Air Interstate Rule because the EPA exceeded its

      good neighbor statutory authority); see also EME Homer City Generation, L.P.

      v. Envtl. Prot. Agency, 696 F.3d 7, 11–12 (D.C. Cir. 2012) (vacating the Cross- State Air Pollution Rule because the EPA improperly applied the good neighbor statute).

   10. Kiefer, supra note 11, at 636.

   11. See Federal Implementation Plans: Interstate Transport of Fine Particulate Matter and Ozone and Correction of SIP Approvals, 76 Fed. Reg. 48,208, 48,211 (Aug. 8, 2011) (to be codified at 40 C.F.R. pts. 51, 52, 72, 78, and 97)

       (finalizing the Cross-State Air Pollution Rule in 2011). See generally Rule to

       Reduce Interstate Transport of Fine Particulate Matter and Ozone (Clean Air Interstate Rule); Revisions to Acid Rain Program; Revisions to the NOx SIP

       
       

       created when an emissions cap is set for each polluting source included in the program.17 Sources are given a certain amount of emissions allowances, which provide for the maximum amount that a source can emit under the program.18 Even if a particular source emits more emissions than its allowances permit, it is still required to comply.19 This strategy pushes sources to determine how they will meet their emissions requirements, which can be achieved through acquiring allowances from other sources to cover their additional emissions.20 Allowances can also be met when sources use technologies to curb emissions.21 Thus, cap and trade is hailed as both an economically and environmentally viable solution because compliance strategies “require no prior approval, allowing sources to respond quickly to market conditions and government regulators.”22

       The Acid Rain Program garnered early success primarily because of its cap and trade approach.23 Specifically, the Acid Rain Program was successful because it implemented a cap and trade structure by giving sulfur dioxide (“SO2”) allowances to those plants that used least-cost energy conservation plans to reduce SO2 emissions.24 Thus, the explicit Title IV authority Congress granted the EPA to regulate air pollutants paved the way to modern air pollution regulation because this first program established that the EPA was able to create an effective cap and trade program to reduce air emissions.25

       
       

       Call, 70 Fed. Reg. 25,162 (May 12, 2005) (codified at 40 C.F.R. pts. 51, 72, 73,

       74, 77, 78, and 96) (finalizing the Clean Air Interstate Rule in 2005).

   12. Cap and Trade: Essentials, U.S. ENVTL. PROTECTION AGENCY, http:// www.epa.gov/captrade/basic-info.html.

   13. Id.

   14. See id.

   15. See id.

   16. See id.

   17. Id.

   18. See Kiefer, supra note 11, at 636.

   24 See 42 U.S.C. § 7651c(f)(2)(B)(iii)(I) (2006).

   1. See Kiefer, supra note 11, at 673.

      
      

      More importantly, the Clean Air Act Amendments created a second source of authority that the EPA now uses to regulate emissions of power plants outside of Title IV. The amendments created the good neighbor provision, which expanded the EPA’s authority to regulate emissions that cross state lines and contribute to the nonattainment of another state’s air quality standards.26 However, private individuals and states have often litigated transport programs founded upon this good neighbor provision, ultimately challenging the EPA’s statutory authority.27

      The United States Court of Appeals for the District of Columbia Circuit has had multiple opportunities to define the scope of the provision. The first of these was in Michigan v. United States Environmental Protection Agency,28 where the court upheld the EPA’s reliance on the good neighbor provision to regulate nitrogen oxides (“NOx”) in the NOx SIP Call Program.29 Under the NOx SIP Call Program, the EPA required many states in the eastern part of the United States to revise their State Implementation Plans (“SIPs”) in order to regulate NOx emissions and meet good neighbor provision requirements.30 The NOx SIP Call Program also provided for a NOx Budget Trading Program, a cap and trade program for NOx emissions.31

      
      

   2. See infra pp. 13–14 and note 81.

   3. See EME Homer City Generation, L.P. v. Envtl. Prot. Agency, 696 F.3d 7, 11 (D.C. Cir. 2012); North Carolina v. Envtl. Prot. Agency, 531 F.3d 896, 906

   (D.C. Cir. 2008); Michigan v. U.S. Envtl. Prot. Agency, 213 F.3d 663, 669

   (D.C. Cir. 2000).

   28 213 F.3d 663 (D.C. Cir. 2000).

   1. See id. at 695 (denying petitions against the NOx SIP Call rule...