In my prior posts on CAIR, I analyzed the real world impacts of the Court’s decision to vacate the program.  In my final post on CAIR, I highlight some of the legal implications from the Court’s decision on business and policy makers.  This is not meant to be a legal brief for lawyers, but rather a quick summary of what matters most from the CAIR decision.

 

 

• Congressional Action Needed- Remember "Clear Skies"?  This was the precursor to CAIR.  It was the Bush Administration’s attempt to get Congressional action on a power plant cap and trade program.  Congressional failure to pass "Clear Skies" has now led to CAIR getting tossed out. The Court declared EPA’s rulemaking approach "fundamentally flawed" (page 59). It appears U.S. EPA cannot legally construct a cap and trade program for power plants directed at ozone and soot through administrative rulemaking.  Therefore, the only way this program gets replaced (and as discussed in my two other posts- it should be) is through Congressional action amending the Clean Air Act.

 

• Deadlines and Dates-  I had the pleasure of testifying in the U.S. Senate on the issue of ozone/soot deadlines and implementation of federal control programs.  The Court made an astute conclusion in finding that U.S. EPA should have coordinated attainment deadlines for ozone and soot that are applicable to the States with the reductions required under the CAIR program.  The Court held "EPA ignored its statutory mandate to promulgate CAIR consistent with provisions in Title I (of the Clean Air Act) mandating compliance deadlines in downwind state’s."  (page 25) 

 

• Coordination with State Pollution Control Plans- It is illogical to create federal air pollution reduction programs for power plants and vehicles that take 10-25 years to fully implement while requiring States meet federal air quality standards in 3-5 years. Depending on the State, power plants and vehicles make up roughly 30-50% of the ozone problem.  You are handcuffing the State’s by designing federal programs that won’t assist their efforts to meet federal air quality standards until after applicable deadlines have past.  Especially when much of the ozone and soot problem is regional in nature, not local. (see CAIR II:  Short Term/Long Term Implications)

 

• Cap and Trade "on the ropes"-  For pollutants with both regional and local consequences it may be enormously challenging to create a valid trading program using the current authority in the Clean Air Act. Both CAIR and CAMR have been vacated by the Courts.  Both represent the newest  cap and trade pollution trading programs developed by U.S. EPA.  Is this the end of cap and trade?    Examine the following quotes from the Court’s decision attacking the very foundations of a regional cap and trade program:
  • "Theoretically, sources in Alabama could purchase enough NOx and SO2 allowances to cover all their current emissions, resulting in no change in Alabama’s contribution to Davidson County, North Carolina’s non-attainment." (page 16)
  • "In Michigan we never passed on the lawfulness of the NOx SIP Call’s trading program."  (page 17)  Seems like a less then subtle suggestion the Court may have thrown out the NOx SIP Call if similar challenges were made.
  • "EPA’s approach-regionwide caps with no state-specific quantitative contribution determinations or emissions requirements-is fundamentally flawed." (page 59)

 

• Economics of Compliance, Costs Cannot be the Driver-The Courts have rebuked EPA efforts to increase the relevance of the economic cost of pollution controls.  The CAIR decision once again declares costs secondary to environmental consequence. 
  • "EPA can’t just pick a cost for a Region, and deem significant any emissions that sources can eliminate more cheaply." (pg. 37)
  • "EPA’s interpretation cannot extend so far as to make one State’s significant contribution depend on another state’s cost of eliminating emissions." (page 39)
  • The Court strongly criticized EPA’s fuel adjustment method of granting more allowances to states with coal burning power plants versus gas or oil.  "The net result will be that states with mainly oil- and gas-fired EGUs (electric generating units) will subsidize reductions in states with mainly coal-fired EGUs…EPA’s appraoch contravenes [the Clean Air Act]." (page 41)