• Legislative Fix for Vacated Clean Air Interstate Rule Unlikely
  • September 27, 2008
  • Law Firm: Troutman Sanders LLP - Atlanta Office
  • As of this writing, it appears increasingly unlikely that federal lawmakers will legislate a codification of all or part of the Clean Air Interstate Rule (“CAIR”). Despite a widely held consensus by states, administrators, and legislators that a legislative fix is necessary, House lawmakers’ efforts this week to pass compromise legislation codifying portions of the vacated CAIR have stalled just days before the legislative session comes to a close.

    In July, the U.S. Court of Appeals for the District of Columbia vacated CAIR in its entirety. The court rejected the U.S. Environmental Protection Agency’s (“EPA”) use of a cap-and-trade system to achieve reductions in power plant emissions of SO2 and NOx under the Clean Air Act. Many states had relied on CAIR to meet Clean Air Act emissions reductions targets, and the July ruling left tremendous uncertainty surrounding the future of SO2 and NOx emissions regulation. The ruling likewise devastated nascent SO2 and NOx allowance markets.

    Legislative efforts to resuscitate CAIR appeared difficult from the beginning. The administration and some utilities supported a complete resuscitation of CAIR, including both Phase I and Phase II of the program. Leading Democrats and environmental groups, however, only supported resuscitating Phase I. A proposal circulated by the Democrats also included prohibitions on the administration proceeding with certain reforms to the new source review program.

    On September 15, two key Democrats, Sen. Tom Carper of Delaware and Rep. Rick Boucher of Virginia reached a tentative deal on a four-year plan that codifies the first phase of pollution limits from the original rule. However, reports began to circulate mid-week that Rep. Joe Barton of Texas would not support any legislative efforts on CAIR this year. Observers belief that with his opposition, it will not be possible to enact a bill in the short time remaining this year. The situation, however, remains fluid.