The United States Supreme Court today ruled that the U.S. Environmental Protection Agency’s (EPA) regulation of air pollution crossing state borders did not violate the Clean Air Act. Environmental Protection Agency. et al. v. EME Homer City Generation, L. P., et al., __ U.S. __ (April 29, 2014).
The High Court’s decision overturns an August 2012 D.C. Circuit ruling vacating the Cross-State Air Pollution Rule (CSAPR) under the theory that the EPA reasonably interpreted the Clean Air Act’s “good neighbor” provision when it issued the CSAPR in 2011. The Clean Air Act mandates State Implementation Plan (SIP) compliance with the “good neighbor” provision, which requires SIPs to “contain adequate provisions . . . prohibiting . . . any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will . . . contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to any . . .” EPA-promulgated national air quality standard. 42 U.S.C. §7410(a)(2)(D)(i).
The Supreme Court’s ruling will have great effect on power companies whose emissions often cross state borders, compelling them to install new pollution control measures and potentially forcing them to close down older coal-fired power plants.
Under the CSAPR, the EPA set strict sulfur dioxide and nitrogen oxide emissions limits designed to reduce such emissions from coal-fired power plants to significantly below 2005 levels. These limits were intended to reduce acid rain and smog in “downwind” states caused by coal-fired power plants in 27 “upwind” states, mainly in the Midwestern and Southern United States, and to reduce the effect of emissions crossing state borders. The CSAPR also included a cap-and-trade system that allowed power producers to comply with the limits by buying, trading, and selling pollution permits.
The case began when “upwind” states such as Texas, Virginia, and Ohio, along with the National Mining Association, the International Brotherhood of Electrical Workers, and several power generators, challenged the CSAPR, asserting EPA had overstepped its discretion in denying states an opportunity to set up their own SIPs to reduce cross-border pollution. The power generators further argued that compliance would cost them hundreds of millions of dollars annually, increasing volatility in the power production market and creating an undue financial burden.
Writing for the majority, Justice Ruth Bader Ginsburg disagreed with the assertion that EPA had not allowed sufficient time for states to implement their own plans, saying that EPA’s input was a prerequisite to state action under the Clean Air Act. In adopting the CSAPR, EPA noted the financial burden on the power producers would be far outweighed by the savings in health care costs from cleaner air. The agency suggested that the rule would prevent nearly 30,000 premature deaths and hundreds of thousands of illnesses each year.
Justices Antonin Scalia and Clarence Thomas dissented; Justice Samuel Alito took no part in consideration of the case. Justice Scalia’s dissent was especially critical of Justice Ginsburg treating the text of the Clean Air Act not as the limits between which the EPA may regulate air pollution, but merely as an obstacle that must be overcome in achieving reduced interstate pollution.