• Court of Appeals Rejects Clean Air Interstate Rule
  • August 9, 2008 | Authors: Peter A. Tomasi; Katea M. Ravega
  • Law Firms: Quarles & Brady LLP - Milwaukee Office; Quarles & Brady LLP - Phoenix Office
  • Finding "more than several fatal flaws," the Court of Appeals for the D.C. Circuit issued a decision on Friday, July 11, 2008, vacating the U.S. Environmental Protection Agency's Clean Air Interstate Rule ("CAIR"). The decision in State of North Carolina v. U.S. EPA determined that several provisions of the rule were contrary to the requirements of the Clean Air Act and vacated the rule in its entirety.

    The Clean Air Interstate Rule was issued in 2005. The centerpiece of the Bush Administration's plan to implement the 8-hour ozone rule, the PM2.5 rule, and regulations for control of impacts to visibility, the rule would have required 28 states and the District of Columbia to revise their state implementation plans to regulate emissions of nitrogen oxides and sulfur dioxide. The rule would have been implemented in two stages. The initial round of reductions would have applied in 2009 for nitrogen oxides and in 2010 for sulfur dioxide, while secondary reductions for both pollutants would have been implemented in 2015.

    In striking down the rule, the Court of Appeals relied heavily on a challenge brought by the state of North Carolina, which alleged that the rule issued by EPA would have prevented North Carolina from ever achieving compliance with the 8-hour ozone rule. The court also agreed in part with a challenge brought by industry, which alleged that EPA improperly connected the emissions trading reductions to the existing acid rain program and which would have limited the value of sulfur dioxide emission allowances currently allocated by statute.

    Although the decision vacates the rule, the vacatur has been stayed for a period of time to allow the parties to seek rehearing or petition for further review. In the short term, the rule casts in doubt the revised implementation plans of several states which relied on CAIR to achieve emissions reductions and to satisfy the requirements that they submit an attainment demonstration to satisfy the 8-hour ozone, PM2.5 and regional haze rules. The decision also makes murkier planning for utilities and state clean air agencies alike, as they try to determine what regulations utilities will be facing in the next five to ten years.

    The rejection of a central element of EPA's air quality planning efforts will have repercussions for regulators and industry alike. Although the extent of the fallout remains to be seen, and an appeal of the decision is still possible, Friday's decision is a significant development in air quality regulation.

    The Court's 60-page ruling may be found at: