Federal Court Reinstates Clean Air Interstate Rule

The United States Court of Appeals for the District of Columbia Circuit today reversed its earlier decision that struck down the Clean Air Interstate Rule (CAIR), and reinstated the rule until the EPA drafts new regulations.

In 2005 the EPA issued CAIR, which established an emissions trading program to control nitrogen oxide (NOx) and sulfur dioxide (SO2) from power plants in 28 states.  The rule was challenged by the state of North Carolina and a number of electric utility companies.

In its July 2008 decision, the court vacated the regulation ruling that EPA’s method for allocating emissions allowances for upwind states and its interpretation of protections for downwind states violated the Clean Air Act. (North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008)).

Shortly after the court’s decision the EPA and most of the opposing parties petitioned the court for a rehearing.  As a result of this extraordinary position, the court requested that the parties address whether any party wanted the court’s vacatur decision to stand.  In addition, the court asked the parties whether the court should stay a mandate implementing its decision until EPA issued a revised rule. 

In its opinion today reversing its prior decision, the court ruled:

Having considered the parties’ respective positions with respect to the remedy in this case, the court hereby grants EPA’s petition only to the extent that we will remand the case without vacatur for EPA to conduct further proceedings consistent with our prior opinion.

The court’s decision today has ramifications throughout the country, including Wisconsin.  The court’s previous decision vacating CAIR had caused uncertainty, leaving many companies unsure of how much they should invest in emissions controls. While today’s decision provides some short-term certainty, Scott Segal, a electric utility lobbyist, told Greenwire that the opinion “still left significant uncertainty about the future fate of the rule.”