EPA Finalizes Long-Awaited Transport Rule To Replace CAIR

On July 6, 2011, the U.S. Environmental Protection Agency ("EPA") issued its final Cross-State Air Pollution Rule ("CSAPR" or "Final Rule") pursuant to Section 110(a)(2)(D)(i)(I) of the Clean Air Act, 42 U.S.C. § 7410(a)(2)(D)(i)(I).1 The CSAPR requires significant reductions of emissions of sulfur dioxide ("SO2") and nitrogen oxide ("NOx") from power plants in 27 states in the eastern half of the U.S. that, according to the EPA, contribute to "downwind" ozone or fine particle pollution in other states. The EPA estimates that the CSAPR will achieve a 73% reduction in SO2 and a 54% reduction in NOx power plant emissions from 2005 levels in the covered states. The CSAPR is available on the EPA's website, at http://www.epa.gov/airtransport/pdfs/TR_070611_WEB.pdf, but has not yet been published in the Federal Register.

The CSAPR was initially proposed on July 6, 2010 and was generally referred to as the Transport Rule. The CSAPR replaces the EPA's 2005 Clean Air Interstate Rule ("CAIR"), which the U.S. Court of Appeals for the D.C. Circuit invalidated in North Carolina v. Environmental Protection Agency, 531 F. 3d 896 (D.C. Cir. 2008), modified on rehearing, 550 F. 3d 1176 (D.C. Cir. 2008) based on the court's finding that the program had "fatal flaws." More specifically, the D.C. Circuit ruled that:

According to the Clean Air Act,2 the EPA must achieve "something measurable toward the goal of prohibiting sources 'within the State' from contributing to nonattainment or interfering with maintenance 'in any other State.'"3 To do so, the EPA must measure each individual state's significant contribution to a downwind state's nonattainment.4 The EPA erred by quantifying "significant contribution" (and thus, state budgets) solely based on levels that could be achieved by implementing "highly costeffective controls."5 "[R]egionwide caps with no state-specific quantitative contribution determinations or emissions requirements . . . [are] fundamentally flawed."6 The trading program is illegal in its failure to link emissions reductions for each state to any measure of that state's significant contribution.7 Thus, both the SO2 and NOx trading programs are arbitrary.8 The CSAPR requires the following states to reduce power plant SO2 and NOx emissions that cross state lines and contribute to ground-level ozone and fine particle pollution in other states: Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland...