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Rebuilding Clean Air Policy

Challenges and Solutions for the Clean Air Interstate Rule

SOURCE: AP/Robert F. Bukaty

A truck in Maine makes its way through a foggy mist brought on by melting snow and warm temperatures earlier this year. The weather system that gave Maine its early thaw is also causing air quality problems; EPA had to issue a regional winter air pollution advisory for the first time in a decade.

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This is part one of a three part series on rebuilding clean air policy after the U.S. Court of Appeals’ Clean Air Interstate Rule decision.

The U.S. clean air program sustained a severe blow on July 9 when a three-judge court in Washington, D.C. overturned a sweeping Environmental Protection Agency rule—the Clean Air Interstate Rule —that was key to meeting air quality standards. CAIR mandated deep cuts in nitrogen oxide and sulfur dioxide emissions at fossil-fuel power plants in 28 Eastern states and the District of Columbia.

The U.S. Court of Appeals for the District of Columbia Circuit is the nation’s premier judicial watchdog of regulatory agencies, and it caught most observers by surprise when it rejected CAIR last month. The litigants challenging the rule sought narrow adjustments in its requirements. They did not expect CAIR’s demise.

The D.C. Circuit decision, if it stands, will throw the nation’s air quality program into turmoil and paralysis that could last years. CAIR was the Bush administration’s one tangible step to implementing the stronger air quality standards adopted under President Clinton over a decade ago. But with the rule nullified, progress in meeting these standards will come to a standstill, putting at risk millions of Americans who would have been protected from harmful pollution that can cause death and disease if the new standards had been met on schedule.

Industry, environmental groups, and state officials—not to mention EPA and the Bush White House—are now scrambling to see whether the damage inflicted by the court decision can be repaired, or at least minimized. Several members of Congress have weighed in as well. Sen. Tom Carper (D-DE) chaired a hearing on the decision on July 29, and along with other senators, raised the prospect of reviving proposed Clean Air Act amendments that had died in the last session of Congress.

There are many possible fixes to the decision, but none are simple or free from controversy. The first step will be to see if CAIR can be salvaged in the D.C. Circuit Court of Appeals or through further rulemaking, and if not, whether states can impose similar emission controls. These measures hold some promise and should be explored, but it is highly uncertain whether they are workable.

The burden will fall on Congress to amend the Clean Air Act if existing law cannot provide a timely solution. Because administrative and judicial options will take time to explore, Congress should immediately codify the first phase of CAIR emission controls, which must be in place for nitrogen oxides by 2009 and sulfur dioxides by 2010, before it adjourns. This would capture CAIR’s immediate benefits and restart the national air quality program without a lengthy hiatus.

Next year, if administrative and judicial strategies have failed, Congress and the president should decide what additional emission reduction targets and deadlines will best achieve clean air progress under existing and revised air quality standards. The Bush administration and some conservative members of Congress have proposed codifying the second phase of CAIR reductions required by 2015, but this would be the wrong approach to take since it is apparent that deeper, quicker, and broader nitrogen oxide and sulfur dioxide reductions are needed to meet air quality objectives. Congress should design a second phase of emission reductions that is more aggressive and far-reaching than the CAIR phase 2 provisions.

Congressional intervention offers perils as well as opportunities. Congress should not overreach in filling the gap created by the CAIR court decision. The biggest priority should be to keep the national air quality program on track by requiring deep and expeditious cuts in nitrogen oxide and sulfur dioxide emissions by power plants. A broader reassessment of the Clean Air Act that addresses mercury and carbon dioxide emissions could inject controversial issues into the mix that are best resolved elsewhere and will only cause delay in tackling the most urgent air quality challenges.

How the Clean Air Act works

The Clean Air Act is built around science-based national ambient air quality standards for dangerous pollutants. These standards must be set by EPA to protect public health with an ample margin of safety. Since the early days of the Act in the 1970s, national ambient air quality standards have been in place for two ubiquitous pollutants—ozone and particulate matter—and the nation has focused its resources on reducing emissions of these pollutants from vehicles, household products, and industrial pollution sources. States have held the major responsibility for achieving these reductions, and must develop State Implementation Plans and submit them to EPA for review and approval. EPA has backstopped the states by setting national emission requirements for cars, trucks, and large emissions sources like power plants.

EPA Administrator Carol Browner strengthened the national ambient air quality standards for these pollutants in 1997 as scientific evidence mounted about the health effects of ground-level ozone and particulate matter. She replaced the existing 1-hour ozone standard with an 8-hour standard of 0.08 parts per million. EPA for the first time also adopted a standard for PM 2.5 (small particulate matter particles distinct from large particles and PM 10) based on scientific studies showing an association between exposure to these particles and aggravated asthma, chronic bronchitis, reduced lung function, irregular heartbeat, heart attack, and premature death in people with heart or lung disease. The new small particle standard was 15.0 micrograms per cubic meter on an annual basis and 65 micrograms per cubic meter over a 24-hour period.

Browner’s decision faced fierce opposition from industry and naysayers in Congress who brought court challenges to the new standards that were ultimately rejected when the U.S. Supreme Court ruled in EPA’s favor in 2001. Scientific literature linking ozone and PM 2.5 to adverse health effects has become stronger since then, refuting the arguments of EPA’s critics. Based on the new data, the EPA Clean Air Scientific Advisory Committee recommended making both standards more stringent. To the dismay of CASAC, EPA Administrator Johnson declined to adopt the new standard levels CASAC had proposed, although he reluctantly made smaller changes in the particulate matter national ambient air quality standards in 2006 and the ozone national ambient air quality standards in 2008.

Meeting the new air quality standards

Adoption of the new particulate matter and ozone standards in 1997 set in motion a national process for determining which states were not meeting the new air quality limits and what steps these states would need to take to come into attainment. Many states had been struggling to attain the existing standards and faced even bigger challenges as the standards became more stringent. It was apparent that efforts to drive down emissions would have to be redoubled, particularly in Eastern states where the bulk of non-attainment areas were concentrated.

The Browner EPA took important initial steps to support the states, including precedent-setting regulations to sharply cut diesel particulate matter and nitrogen oxide emissions from trucks and drive down summer emissions of nitrogen oxides from power plants in 20 Eastern states. But it was clear that more would have to be done, particularly by coal-burning utilities whose emissions of nitrogen oxide and sulfur dioxide played an important role in the formation of ozone and particulate matter. Recognizing that these emissions were transported over long distances and often affected air quality in distant states, policymakers agreed that individual states could not effectively act on their own and that region-wide emission-reduction strategies for power plants would be needed.

What CAIR does

CAIR, which was finalized in March 2005, establishes declining emission caps for power plant emissions of nitrogen oxide and sulfur dioxide in the Eastern United States. The nitrogen oxide caps are 1.5 million tons in 2009 and 1.3 million tons in 2015, resulting in a 60 percent reduction below 2003 levels. The sulfur dioxide caps are 3.7 million tons in 2010 and 2.6 million tons in 2015, resulting in a 70 percent reduction below 2003 levels.

The rule establishes nitrogen oxide and sulfur dioxide “budgets” for covered states, which they can meet by opting into a multistate cap-and-trade program implemented by EPA. Under this program, individual power plants would be issued allowances setting limits on their emissions. Plants could meet these limits by installing emission controls or buying allowances from other facilities in the CAIR trading region. In the case of sulfur dioxides, plants would be required to “retire” 50 percent and then 67 percent of the allowances they received under the acid rain provisions (Title IV) of the 1990 Act.

According to EPA, CAIR is expected to deliver $85 billion to $100 billion in annual health benefits, preventing 17,000 premature deaths annually, millions of lost work and school days, and tens of thousands of non-fatal heart attacks and hospital admissions. On the environmental side, CAIR is predicted to produce nearly $2 billion in annual visibility benefits in southeastern national parks and to significantly reduce the number of acidic lakes and streams in the Eastern United States. EPA projected that the initial 2009-2010 emission caps in CAIR would alone prevent 13,000 premature deaths and 19,000 heart attacks by the end of 2010.

The costs of implementing CAIR are projected to be far smaller than their benefits—$2.36 billion annually for the 2010 emission reductions and $3.57 billion for the 2015 reductions. These costs are mainly to install emission-control equipment at coal-fired power plants. EPA anticipates that, by 2020, 80 percent of the coal-fired capacity in the CAIR region will have controls for sulfur dioxide (scrubbers) and/or nitrogen oxide (primarily selective catalytic reduction).

The Bush record on air quality

When the Bush administration arrived on the scene in 2001, interest was building in an integrated multi-pollutant approach for fossil-fuel power plant emissions that would achieve region-wide nitrogen oxide and sulfur dioxide reductions while also placing controls on utility emissions of toxicant mercury and carbon dioxide. Based on EPA’s successful sulfur dioxide trading program under the acid rain provisions of the 1990 Act, a system of emission caps and tradable allowances was viewed as the preferred mechanism for reducing emissions of three of these pollutants, with differences of opinion over how best to reduce emissions of mercury.

Multi-pollutant legislation was initially a bipartisan priority in Congress. But the battle lines were quickly drawn when the Bush administration removed CO2 from the mix of pollutants, proposed weak emission limits for mercury, limited the scope and magnitude of nitrogen oxide and sulfur dioxide reductions, and sought to exempt power plant modifications from the Act’s new source review program. The Bush legislative proposal, called the Clear Skies Act, met with determined resistance and was ultimately shelved following an unsuccessful markup in the Senate Environment and Public Works Committee in March 2005. Sens. Thomas Carper (D-DE) and Lamar Alexander (R-TN) introduced their own, more stringent versions of multi-pollutant legislation, but these bills did not advance in Congress.

EPA turned to accomplishing the Bush air agenda administratively through a series of rulemakings. The fruits of these efforts were meager. The D.C. Circuit Court of Appeals in February 2008 overturned the agency’s controversial Clean Air Mercury Rule, which set anemic targets and timelines for mercury reductions. An EPA rule weakening the new source review program by exempting from review a broad range of repair and maintenance activities at power plants with the potential to increase emissions suffered the same fate in June of 2005. CAIR was the remaining pillar of the Bush air program until it, too, was found wanting by the DC Circuit Court of Appeals.

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