EME Homer City v. EPA: Another Victory for Clean Air

 Summary: While many of the U.S. Supreme Court’s decisions this term were controversial, the air quality cases were marked victories for the environment. One of the Supreme Court’s recent decisions, EME Homer City Generation v. EPA, upheld the Cross-State Air Pollution Rule, (CSAPR). By reinstating CSAPR, the Court sustained EPA’s efforts to improve the National Ambient Air Quality Standards (NAAQS) program and the overall efficacy of the Clean Air Act (CAA).

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By Ashley Welsch

Welsch_Homer CityEPA promulgated CSAPR to address the interstate nature of air pollutants in 28 states, affecting over 75% of the population. CSAPR codified a program to achieve the goals of the CAA’s Good Neighbor Provision in the NAAQS framework.  That provision’s goal is to prevent upwind states from polluting in amounts that significantly contribute to downwind states’ nonattainment with the NAAQS.  EPA focused on SO2 and NOx emissions in CSAPR since they most significantly contribute to particulate matter (PM2.5) and ozone.  Reducing these pollutants will reportedly prevent 13,000–34,000 premature deaths, hundreds of thousands of illnesses and hospitals visits, and 1.8 million days of missed work or school.  The $800 million spent annually on CSAPR (in addition to the investments of a previous rule, the Clean Air Interstate Rule (CAIR)) will result in $120–$280 billion in annual benefits.

CSAPR imposes emissions reductions on electric generating units because they present the most cost-effective opportunities for regulation.  EPA developed annual budgets of emissions allowances for each regulated state. The allowances were determined by considering the magnitude of a state’s contribution to upwind nonattainment, the air quality benefits of the reductions, and the cost of controlling pollution from the various sources.  EPA also developed an allowances trading program that permits banking allowances from year-to-year.  In order to expedite CSAPR’s implementation, EPA promulgated a Federal Implementation Plan (FIP) instead of calling for State Implementation Plans (SIPs).

Industry and state petitioners sued in the D.C. Circuit Court of Appeals, arguing that EPA overstepped its statutory authority when it adopted CSAPR.  The Circuit Court vacated CSAPR in its entirety.  The court held that EPA upset the CAA’s cooperative federalism by issuing a FIP without letting the states make their own SIPs.  The court also held that EPA was prohibited from considering costs because it would require uneven, over- or under-reductions by the states.  The Supreme Court granted certiorari and reversed.Scotus

From the beginning, the Court emphasized that it would be conducting a Chevron analysis to review CSAPR since EPA was interpreting a CAA provision. Thus, the Court elaborated on the Good Neighbor Provision’s text, its legislative history, its purpose, and case law that supported EPA’s rulemaking.  The Court determined that EPA rightfully complied with the statutory deadline to have any implementation plan in place within 2 years, especially since the D.C. Circuit Court had previously directed EPA to fix CAIR’s problems quickly.  Furthermore, given that the Good Neighbor Provision does not lay out a particular method for implementation, the Court held that EPA had reasonably allocated responsibility amongst upwind states for pollution in downwind states.  Since Congress had been silent, it was up to EPA to “select from reasonable options.”

The biggest flaw in the majority opinion is that it did not point out the irony of petitioners’ advocacy, in effect, for overregulation. The majority erred when it claimed that a strictly proportional allowances allotment (without cost considerations) was impermissible. If it is within EPA’s discretion to adopt a methodology to implement the Good Neighbor Provision, couldn’t a proportional allotment be reasonable? The irony is that EPA factored costs into its methodology to help petitioners avoid costly overregulation. Industry should be grateful that EPA took this route because proportional allotments could have cost more.

The dissent argues that EPA should not have been able to consider costs.  However, Whitman v. American Trucking Ass’n held that EPA cannot consider costs when setting the NAAQS themselves. In fact, it says that EPA cannot take costs into account for implementation, and CSAPR is implementation of the CAA.

The Supreme Court did leave the door open for as-applied challenges. This means that individual affected states could file suit, but they would need to prove actual injury. Nevertheless, the facial challenge to CSAPR failed. Since it was sustained, environmental and public health organizations hope that the CSAPR program can be applied throughout all 50 states.

AshleyWelsch_1006Ashley Welsch is a JD and Master of Environmental Law and Policy ’15 candidate at Vermont Law School. She has served as an Articles Editor with the Vermont Journal of Environmental Law, Chair of the Campus Greening Committee, Environmental Legal Research Assistant to the Environmental Law Librarian, Co-Chair of Women’s Law Group, and Public Relations Officer for Phi Alpha Delta. Ashley graduated summa cum laude from the University at Buffalo in 2012 with a double major in Social Sciences Interdisciplinary and Political Science. She also served as the Climate Neutrality Coordinator for the UB Undergraduate Student Association. Ashley has interned with the Clean Air Coalition of Western New York and Amdursky, Pelky, Fennel & Wallen, P.C. in Oswego, NY. This summer, Ashley is an intern with the New York State Office of the Attorney General’s Environmental Protection Bureau in Buffalo. She will be interning with the New York State Department of Environmental Conservation’s Office of General Counsel in Albany this fall. After graduation, she would like to practice environmental law with a focus on compliance and enforcement.