Interstate Air Pollution

Question 1

Interstate Air Pollution

Answer 1

• one of the og justifications for the CAA but not really until last couple of decades that it kicks in
• very challenging - tough to figure out what state is doing what and how much

Question 2

Tall Stack Phenomenon

Answer 2

• designed to meet in-state NAAQSs cheaply (by sending to other states)
• super tall stacks, + figured out intermittent controls so would only run the power plant when wind blows in a certain direction
• Congress responds w/ 1977 amendments - you can have the stacks, but you don’t get credit for them in efforts to reduce air pollution (no credit for intermittent controls or stacks over a certain height)

Question 3

Section 110(a)(2)(D)

Answer 3

• Clean Air Act Amendments 1990
• says that SIPs need to “contain adequate provisions prohibiting “any source” “from emitting any air pollutant in amounts” which will “contribute significantly” to nonattainment in another state

Question 4

Section 126(b)

Answer 4

• deals with Interstate Pollution Abatement
• allows states to petition if they think another state is messing with their attainment or maintenance of NAAQSs

Question 5

Tradeable Emissions - Cap/Trade

Answer 5

• multiple states with downwind effects may mean fungibility -> cap and trade system might be effective

Opportunities:
- bring existing sources into regulatory fold
- create market to take advantage of lowest cost reductions
- address bottom line amount
- promote economic efficiency

Question 6

Cap and Trade - General Concept/Advantages

Answer 6

• FUNGIBILITY KEY
• cost-effective - may cost more for some facilities to reduce their emissions, and cap and trade can allow you to achieve the same level of reduction at a lower cost (those for whom it’s more expensive will buy reductions from others)
• better to let the market figure it out than try to set out definitively which is most cost-effective

Question 7

Challenges of Cap and Trade

Answer 7

• determine overall amount emitted
• determine overall reduction required
• address nonfungibility issues
• allocation: auction vs give away
• monitor
• possibility of weird incentives (companies may pollute max amount possible)

Question 8

Section 176A

Answer 8

• Interstate Transport Commissions
• EPA can establish a “transport region” if it determines interstate transport of air pollutants from one or more states in the region contributes significantly to violation of NAAQS in one or more other states
• can establish Transport Commissions for those regions -> the commissions can recommend measures and request a SIP call (request that EPA issue a finding that a state’s SIP is substantially inadequate)

Question 9

Major EPA Interstate Pollution Initiatives

Answer 9

• Acid Deposition CAA Title IV (Bush I)
• NOx SIP Call (1998, Clinton)
• Clean Air Interstate Rule (2005, Bush II)
• Cross State Air Pollution Rule (2011) (Obama) (“Transport Rule”)

Question 10

Acid Deposition

Answer 10

• Midwest to Northeast -> the 111 “Big Dirties” causing major harm to forests + paint on buildings in NE (lots of ecosystem + property damage)
• Bush defeated logjam in 1990 CAA amendments -> creates Acid Deposition program (found a way to reduce acid in a way midwestern industries found pallatable)
• TITLE IV DEALS WITH ACID DEPOSITION CONTROL

Question 11

Acid Deposition - Nationwide Cap

Answer 11

• plan to reduce SO2 by 10M tons per yr below 1980
• reduce NOx by 2M tons per yr below 1980

Question 12

Acid Deposition - Phase 1

Answer 12

1990-2000
- designed to achieve half of all emissions reductions sought
- applies to largest coal-fired power plants (>100MWe)
- allocation of pollution allowance to plants based on SO2 emission rates of 2.5 lbs SO2 per million BTU produced
- plants can buy and sell allowances (although allowances explicitly not a property right)
- bonus allowances for certain technologies and locations

Question 13

Acid Deposition - Phase II

Answer 13

Begins in 2000
- adds additional industrial sources (>75 MWe)
- allowance formula reduces from 2.5 lbs SO2 per million BTU to 1.2 lbs SO2 per million BTU
- bonus allowance provisions for “clean coal technology,” to ease transition in 10 Midwestern States and reward cleaner states

Question 14

Successes of Acid Rain Program

Answer 14

• cost of compliance dropped dramatically (cost of scrubbers down, encouraged energy conservation as well as fuel shift to low sulfur coal)
• smaller plants opted into Phase 1 (trying to take advantage of market)
• 2005 - Cost benefit ratio found to be favorable - estimated 40:1 bens to costs (bens $122B annual)
• achieved 40% plus reduction since 1990 by 2006

Question 15

Ozone Pollution

Answer 15

• secondary pollutant
• created by other emissions in the atmosphere that combine
• no company actually emits ozone, they just emit volatile organic compounds and NOx that react when there’s heat to produce ozone

Question 16

NOx SIP Call

Answer 16

• Oct 1998
• singles out 23 states (including DC) as significant contributors to downwind nonattainment of ozone (based on magnitude, frequency and relative amount)
• invokes on 110(k)(5)
• each state needs to reduce its contribution only by the amount achievable with “highly cost-effective controls” (less than $2K/ton)

Question 17

NOx SIP Call - State Options

Answer 17

• based on the “highly effective controls”, EPA puts a cap on each state’s emissions

State has three choices for how to meet this cap:
- can revise the SIP to set a cap on the state and tell sources what to do
- can do initial in-state allocation then let sources trade
-can op into FIP (creates national cap and trade program for the 23 states)

Question 18

Michigan v. EPA - DC Cir. 2000

Answer 18

• response to the NOx SIP Call - petitioners are upset because EPA considered costs rather than trying to determine how much each state was contributing
• DC Circuit says it IS permissible for EPA to consider costs
• Sentelle dissents - says need to figure out based on actual amounts of pollution, not $

Question 19

NOx SIP Call Result

Answer 19

• basically, huge success
• 100% compliance by 2,500 covered units
• by 2006, power plant NOx reductions were 60% lower than in 2000
• by 2006, 80% of 104 areas nonattainment for ozone in 2004 had reached attainment

Question 20

Clean Skies Proposed Bill

Answer 20

• proposed by Bush admin
• trying to cut SO2, NOx, and mercury from power plants
• Congress doesn’t passed this -> Bush admin turns to regulations

Question 21

Clean Air Interstate Rule (CAIR)

Answer 21

• 2005
• designed to achieve the lowered (1997) NAAQSs for ozone and PM2.5 by lowering SO2 and NOx emissions (these are precursors to the other two)
• directed at 28 states in Midwestern and Eastern US
• imposed budgets and caps on fossil fuel-fired power plants
• apportioned emissions based on what could be controlled by “cost-effective” controls (no guarantee states keep within own caps)

Question 22

North Carolina v. EPA

Answer 22

• 2005
• CAIR gets struck down by DC Cir - distinguished from NOx + said can’t do the cost-effective idea
• BUT court agreed not to vacate because really only NC wanted to strike the rule down -> wound up staying in place for yrs

Question 23

Cross-State Air Pollution Rule (CSAPR)

Answer 23

• 2011
• Obama EPA
• HUGE problem of nonattainment ozone + particulate matter, plus all agreed best way to address was cap and trade (spaghetti matrix - impossible to figure out what’s specifically going where, doesn’t precisely fit the lingo but doing the best it can)
• core element: 1% threshold, THEN emissions reductions
• significant contribution threshold - state subject to CSAPR if its contribution exceeds 1% of relevant NAAQSs

Question 24

CSAPR Reduction Requirements

Answer 24

• EPA uses a computer model to figure out how much overall reduction is necessary to achieve attainment or sufficiently curb downwind nonattainment
• then figures out cost-effective controls that will reach necessary overall reduction
• annual state budgets determined by applying applicable cost per ton to all existing sources in each state

Question 25

CSAPR FIP

Answer 25

- imposed simultaneously (states can't avoid, prior EPA determination SIP inadequate) - assigns allocations to power plants and requires compliance - creates interstate trading program to allow cost-effective trading - states can't avoid the FIP in the first instance, but CAN submit SIPs in future to replace the FIP

Question 26

EME Homer City Generation v. EPA

Answer 26

- 2012 - DC Circuit strikes down CSAPR - says not okay that a state could be required to reduce its emissions by an amount greater than the "significant contribution" - focused on idea that states are only responsible for whatever amounts "contribute significantly"

Question 27

EPA v. EME Homer City - Questions Presented for SCOTUS

Answer 27

- whether court of appeals lacked jurisdiction to consider challenges on which it granted relief - whether states are excused from adopting SIPs prohibiting emissions that "contribute significantly" to air pollution problems in other states until after EPA has adopted a rule quantifying each state's interstate pollution obligations (did EPA err in not giving chance to come up with SIPs) - whether EPA permissibly interpreted the statutory term "contribute significantly" so as to define upwind states' "significant" contributions in light of cost-effective emission reductions they can make to improve air quality

Question 28

EPA v. EME Homer City - EPA Oral Argument

Answer 28

- says EPA accepts premise that each state should decrease by fair share, but there are multiple ways to figure that out + cost-effectiveness is just one way (ex of dunking - less effort required for someone who's taller) - significant contributions to a bad result (layups vs. missed three-pointers)

Question 29

EPA v. EME Homer City - Whether EPA needs to provide reasonable time to develop SIP

Answer 29

- not required by statute - states submit the SIPs, once EPA finds inadequate, it has statutory duty to issue FIP at any time within two yrs - DC Circuit had tried to say you had to give states "reasonable" period of time to propose SIPs implementing their allocated budget -> SCOTUS says this just isn't in the statute

Question 30

EPA v. EME Homer City - Cost-Effectiveness Decision

Answer 30

- SCOTUS upholds on Chevron II (gap to be filled by Chevron deference) - says EPA is just answering the question of how to efficiently and equitably allocate responsibility for downwind state's nonattainment among multiple contributing upwind states - caveat: if a state wants to show being overpenalized/controlled as applied, SCOTUS will review and reduce (upholds facially, but leaves room for as applied challenge)

Question 31

EPA v. EME Homer City - Scalia Dissent

Answer 31

- claims EPA trying to smuggle in costs "again" and cites Whitman .v. American Trucking - he's actually wrong on this though cause in that case EPA was saying it could NOT consider costs