Cap and Trade Programs Under the Clean Air Act: Lessons from the Clean Air Interstate Rule and the NOx SIP Call
Patricia Ross McCubbin
Southern Illinois University School of Law
November 13, 2009
Penn State Environmental Law Review, Vol. 18, 2009
The Clean Air Interstate Rule (CAIR), adopted in 2005, was well recognized as the most important rule to improve air quality adopted by the Bush Administration. To alleviate high levels of smog and soot east of the Mississippi, the rule capped harmful emissions in 28 states, but allowed regulated facilities to participate in an emissions trading program. Such cap and trade programs have become a favored tool for EPA and many other parties because they allow industries to meet environmental goals cost-effectively. CAIR received widespread support from many quarters. States and environmental organizations viewed the rule as a good step toward addressing interstate air pollution. Even regulated industries leant their support because, while concerned about the stringency of the rule, they appreciated the flexibility of the emissions trading program.
Delivering a shocking blow, in July 2008 the U.S. Court of Appeals for the D.C. Circuit struck down CAIR in its entirety in North Carolina v. EPA, severely disrupting EPA’s plans to rely on the rule as the anchor for many regulatory efforts in the years to come. The court held, among other things, that the cap and trade program violated the Clean Air Act. The decision was particularly surprising because CAIR was modeled on an earlier rule, the NOx SIP Call, that the D.C. Circuit generally upheld in 2000.
The North Carolina ruling could have profound implications for the future of cap and trade programs under the Clean Air Act, not only for harmful ozone and soot, but also greenhouse gases. To consider those future ramifications, this article compares and contrasts CAIR and the NOx SIP Call, as well as the D.C. Circuit opinions on each, to understand why the court struck down CAIR even as it upheld the SIP Call.
Number of Pages in PDF File: 36
Keywords: interstate air pollution, cap and trade, emissions trading, Clean Air Act
Date posted: November 14, 2009