A three-judge panel of the US Court of Appeals for the District of Columbia held in a 2-1 opinion that the US Environmental Protection Agency (EPA) had overstepped its authority with the Cross-State Air Pollution Rule (CSAPR), and, as a result, vacated the regulation (USCA Case #11-1302). CSAPR (also called the Transport Rule) was finalized in July 2011 and replaced and strengthened the requirements of the 2005 Clean Air Interstate Rule (CAIR), which the US Court of Appeals for the DC Circuit ordered EPA to revise in 2008. (Earlier post.)
Carried long distances across the country by wind and weather, power plant emissions of sulfur dioxide (SO2) and nitrogen oxide (NOx) continually travel across state lines. The rule was intended to improve air quality by cutting SO2 and NOx emissions that contribute to pollution problems in other states. (The so-called “good neighbor” provision.)
The rule defined emissions reduction responsibilities for 28 upwind states based on those states’ contributions to downwind states’ air quality problems. The CSAPR limits emissions from upwind states’ coal- and natural gas-fired power plants, among other sources. By 2014, the rule and other state and EPA actions would have reduced SO2 emissions by 73% from 2005 levels, and NOx emissions by 54%.
EPA calculated that the final rule would yield $120 to $280 billion in annual health and environmental benefits in 2014, including the value of avoiding 13,000 to 34,000 premature deaths. EPA estimated annual costs of CSAPR at $800 million in 2014.
In response, a number of states, local governments, industry groups, and labor organizations petitioned for review of the rule (all the cases were consolidated). In the decision for the panel, Judge Brett Kavanaugh wrote:
Although the facts here are complicated, the legal principles that govern this case are straightforward: Absent a claim of constitutional authority (and there is none here), executive agencies may exercise only the authority conferred by statute, and agencies may not transgress statutory limits on that authority.
Here, EPA’s Transport Rule exceeds the agency’s statutory authority in two independent respects. First, the statutory text grants EPA authority to require upwind States to reduce only their own significant contributions to a downwind State’s nonattainment. But under the Transport Rule, upwind States may be required to reduce emissions by more than their own significant contributions to a downwind State’s nonattainment. EPA has used the good neighbor provision to impose massive emissions reduction requirements on upwind States without regard to the limits imposed by the statutory text. Whatever its merits as a policy matter, EPA’s Transport Rule violates the statute.
Second, the Clean Air Act affords States the initial opportunity to implement reductions required by EPA under the good neighbor provision. But here, when EPA quantified States’ good neighbor obligations, it did not allow the States the initial opportunity to implement the required reductions with respect to sources within their borders. Instead, EPA quantified States’ good neighbor obligations and simultaneously set forth EPA-designed Federal Implementation Plans, or FIPs, to implement those obligations at the State level. By doing so, EPA departed from its consistent prior approach to implementing the good neighbor provision and violated the Act. For each of those two independent reasons, EPA’s Transport Rule violates federal law. Therefore, the Rule must be vacated.
In so ruling, we note that this Court has affirmed numerous EPA clean air decisions in recent years when those agency decisions met relevant statutory requirements and complied with statutory constraints...In this case, however, we conclude that EPA has transgressed statutory boundaries. Congress could well decide to alter the statute to permit or require EPA’s preferred approach to the good neighbor issue. Unless and until Congress does so, we must apply and enforce the statute as it’s now written. Our decision today should not be interpreted as a comment on the wisdom or policy merits of EPA’s Transport Rule. It is not our job to set environmental policy. Our limited but important role is to independently ensure that the agency stays within the boundaries Congress has set. EPA did not do so here.
Judge Rogers, dissenting, said that by vacating the rule, the court was disregarding limits Congress placed on its jurisdiction, the plain text of the Clean Air Act (“CAA”), and this court’s own settled precedent interpreting the same statutory provisions at issue.