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“The Vagaries of the Wind”: Recent Supreme Court Decision Affirms EPA’s Approach to Interstate Air Pollution

On April 29, 2014, the Supreme Court released a 6-2 opinion that was both a victory for states that are downwind of other polluting states, and, more broadly, for the Environmental Protection Agency’s rulemaking authority.

EPA v. EME Homer City Generation, L.P. (EME) revisited a familiar problem under the Clean Air Act (CAA) – how to account for pollution emitted in one state that affects CAA compliance in another state. Justice Ginsburg’s opinion reaffirmed both EPA’s authority to issue CAA Federal Implementation Plans when EPA finds State Implementation Plans inadequate, and more importantly, EPA’s authority to allocate responsibility and emission reductions among multiple pollution-emitting states.

The EPA Rule, and the D.C. Circuit’s Reasoning for Vacating It

The CAA directs EPA to establish national ambient air quality standards (NAAQS) for specific pollutants at levels that will protect public health.  EPA specifies “nonattainment” areas in which the concentrations of those pollutants exceed the NAAQS, and “attainment” areas where concentrations meet the NAAQS.  When EPA sets a new or revised NAAQS for a pollutant, a state has three years to submit a State Implementation Plan (SIP) showing how it plans to comply.  If EPA finds a SIP inadequate, it has two years to issue a Federal Implementation Plan (FIP).  One part of the CAA, the “Good Neighbor Provision,” requires a SIP to include measures sufficient to prohibit that state’s polluters from emitting pollutants in amounts that will prevent NAAQS attainment in other states.  42 U.S.C. § 7410(a)(2)(D)(i).  Essentially, this provision mandates that upwind states reduce their pollution emissions so that downwind states may be “in attainment” with applicable NAAQS.

In 2005, EPA issued a rule regarding the scope of the Good Neighbor Provision.  After the D.C. Circuit found significant fault with that rule, EPA in response issued the Cross-State Air Pollution Rule, called the “Transport Rule.”  Under the Transport Rule, as described by Justice Ginsburg, EPA must craft a solution to the complex problem of interstate air pollution that accounts for “the vagaries of the wind.”  The Transport Rule provides that an upwind state “contributes significantly” to downwind nonattainment, and thus must reduce its emissions, to the extent its exported pollution both (1) produces one percent or more of an NAAQS in at least one downwind state and (2) could be eliminated cost-effectively, as EPA determines.

When EPA promulgated the Transport Rule in 2011, it also promulgated a FIP for each state regulated under the rule.  In EME, state and local governments, as well as industry and labor groups, principally challenged two aspects of EPA’s Transport Rule.  Procedurally, the challengers argued that EPA should not have issued the Transport Rule and related FIPs contemporaneously, and should instead have given states a chance to comply with the Transport Rule in a subsequent SIP.  Substantively, the challengers disputed EPA’s apportionment methods under the Transport Rule, specifically its consideration of costs rather than proportional reduction based on each state’s emissions.  The D.C. Circuit agreed with these challenges and vacated the Transport Rule in its entirety.

The Supreme Court’s Reasoning

The Supreme Court reversed the D.C. Circuit’s decision and remanded the case for two main reasons.

First, the Court held that, once EPA finds a SIP inadequate to meet a NAAQS, EPA may immediately issue a FIP.  Justice Ginsberg wrote that the CAA’s text (42 U.S.C. § 7410(c)(1)) compelled this result, and that after EPA finds a SIP inadequate, it is “not obligated to wait two years [to issue a FIP] or postpone its action even a single day.”  Instead, the Court wrote, “nothing in the [CAA] places EPA under an obligation to provide specific metrics to [s]tates before they undertake to fulfill their good neighbor obligations.  By altering the schedule Congress provided for SIPs and FIPs, the D.C. Circuit … allowed a delay Congress did not order and placed an information submission obligation on EPA Congress did not impose.”  Thus, the CAA did not require EPA to give states a “second bite at the apple” to file a SIP.

Second, the Court held that EPA has authority to regulate pursuant to the Good Neighbor Provision and agreed with the EPA’s approach to reducing interstate air pollution to attain compliance with NAAQS.  Following the framework provided in Chevron U.S.A. Inc. v. National Resources Defense Council, Inc., 467 U.S. 837 (1984), the Court found that the Good Neighbor Provision’s silence on a method of apportionment to reduce upwind pollution effectively delegated authority to EPA to select among reasonable apportionment options.  Further, the Court held that EPA’s Transport Rule, which considers both the magnitude of upwind states’ emissions and the cost required to reduce those emissions, was a permissible construction of the Good Neighbor Provision of the CAA.  Such an interpretation, in the majority’s opinion, efficiently eliminates the “cheapest” emissions and equitably subjects to stricter standards states that have done less to control their pollution.

In dissent, Justice Scalia, joined by Justice Thomas, disagreed with the majority’s deference to EPA under Chevron.  Instead, the dissenters would have upheld the D.C. Circuit’s decision that each state should bear burdens in emissions reductions proportional to the size of their contributions, rather than in proportion to the ease of reducing them.

EME is a complex decision construing the CAA and affording substantial deference to EPA’s expertise. It has garnered significant attention in the media given its far-reaching implications for resolving complex interstate environmental problems.

 

 

About the Author

Jessica A. Wall – Associate

Jessica helps clients with environmental, municipal, and litigation matters.


Posted In: Air Pollution

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