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D.C. Circuit Gives EPA's Cross-State Air Pollution Rule the Green Light--For Now

The United States Court of Appeals for the District of Columbia Circuit has lifted a nearly three-year-old stay on EPA's Cross State Air Pollution Rule ("CSAPR"), a contentious rule designed to regulate air pollution that is generated in certain states and drifts downwind to others. EPA promises that CSAPR will create billions of dollars in public health benefits, but a number of states and industry groups maintain that the rule is too onerous.

EPA promulgated CSAPR in 2011 after being ordered by the D.C. Circuit in North Carolina v. EPA to replace the Clean Air Interstate Rule. 531 F.3d 896 (2008). Both rules seek to regulate cross border air pollution under the Clean Air Act, but the D.C. Circuit invalidated CAIR after finding "more than several flaws in the rule."

CSAPR remedies the flaws in CAIR because it includes state-specific limits on emissions of nitrogen oxides and sulfur dioxide. These emissions limits will apply to utilities in states that "contribute significantly" to the violation of Clean Air Act standards downwind. CSAPR also contemplates the establishment of trading programs for emissions allowances that EPA will assign to various emissions sources.

The D.C. Circuit had imposed the stay on CSAPR in December of 2011 before vacating CSAPR and remanding it back to EPA. EPA subsequently petitioned the Supreme Court for a writ of certiorari, and the Supreme Court reversed the D.C. Circuit earlier this year. Environmental Protection Agency v. EME Homer City Generation, L.P. 134 S. Ct. 1584 (2014). It was this reversal of the D.C. Circuit that prompted EPA's successful motion back in the circuit court to lift the stay.

So what is next for CSAPR? EPA is "reviewing the court's order to determine whether any further guidance or administrative action is necessary to begin implementation of" the rule. In addition, while the court did not explicitly grant all of EPA's requests in its motion (e.g., extending certain upcoming compliance deadlines), "EPA considers the court to have granted the entire motion."

In addition, EPA's motion to lift the stay was but one CSAPR issue of many in the EME Homer City litigation. When granting EPA's motion, the D.C. Circuit also denied motions to dismiss the case in its entirety, and oral arguments on the remaining issues are scheduled for March 11, 2015. Therefore, the final fate of CSAPR is far from settled.

Stay tuned to the Periconi, LLC Environmental Law Blog for further updates on CSAPR, as well as other federal and state initiatives to regulate climate change and air pollution.

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