ELR Citation: ELR 20172
No(s). 05-1244 (D.C. Cir. Jul 11, 2008)

The D.C. Circuit vacated the U.S. Environmental Protection Agency's (EPA's) Clean Air Interstate Rule (CAIR), which would have required 28 states and the District of Columbia to regulate sulfur dioxide (SO2) and nitrogen oxide (NOx) to eliminate "significant" contributions to downwind states' air pollution. North Carolina and several electric utility companies filed petitions challenging the rule. The court found that EPA's approach—regionwide caps with no state-specific quantitative contribution determinations or emissions requirements—was fundamentally flawed and ordered EPA to redo its analysis from the ground up. Clean Air Act (CAA) §110(a)(2)(D)(i)(I) prohibits sources "within the State" from "contribut[ing] significantly to nonattainment in . . . any other State . . . ." Yet, CAIR only assures that the entire region's significant contribution will be eliminated. EPA also failed to give independent significance to the "interfere with maintenance" language set forth in CAA §110(a)(2)(D)(i)(I) to identify upwind states that interfere with downwind maintenance. On remand, it must consider anew which states are included in CAIR, after giving some significance to the phrase "interfere with maintenance" in the statute. In addition, the 2015 deadline for upwind states to eliminate their "significant contribution" to downwind nonattainment ignores the plain language of §110(a)(2)(D)(i). EPA must decide what date, whether 2015 or earlier, is as expeditious as practicable for states to eliminate their significant contributions to downwind nonattainment. In addition, the trading program is unlawful because it does not connect states' emissions reductions to any measure of their own significant contributions. To the contrary, it relates their SO2 reductions simply to their Title IV allowances, tampering unlawfully with the Acid Rain Program. The SO2 regionwide caps are entirely arbitrary since EPA based them on irrelevant factors like the existence of the Title IV program. And the allocation of state budgets from the NOx caps is similarly arbitrary because EPA distributed allowances simply in the interest of fairness. Given these and other "fatal flaws" of the rule, the court vacated CAIR in its entirety.