A federal appeals court unanimously struck down the Clean Air Interstate Rule (CAIR) on Friday and said that the Environmental Protection Agency (EPA) had overstepped its authority when it established the regulation in 2005.
 
“Because we find more than several fatal flaws in the rule and the [EPA] adopted the rule as one, integral action, we vacate the rule in its entirety and remand to EPA to promulgate a rule that is consistent with this opinion,” the U.S. Court of Appeals for the District of Columbia wrote in a per curiam opinion (PDF).
 
When it instituted the rule in March 2005, the EPA had said that CAIR would result in the “largest pollution reductions and health benefits of any air rule in more than a decade.” The rule’s purpose was to reduce sulfur dioxide (SO₂), nitrogen oxide (NO_x), and smog emissions from power plants in 28 midwestern and eastern states to lessen their impact on downwind areas.
 
The agency had planned that reductions would be achieved via interstate cap-and-trade programs, which would be implemented in two phases. The first phase for NO_x  reductions would have begun next year and those for SO_x in 2010. The second reduction phase for each pollutant was set to begin in 2015.
 
But the state of North Carolina and several utility companies—among them Entergy Corp. and FPL Group—had petitioned the appellate court, citing various objections to aspects of the regulation. Among other things, the state was opposed to the agency’s proposed trading programs. Some utilities disputed the EPA’s authority to set pollutant budgets or disagreed with reduction start dates, while electric utilities operating in Texas, Florida, and Minnesota argued against the inclusion of all or part of those states in CAIR.
 
Earlier this year, in New Jersey v. EPA (PDF), the court had thrown out the agency’s rule controlling mercury emissions from power plants. That decision considered, The New York Times commented, Friday’s ruling meant that virtually all new pollution controls imposed on the electric utility industry by the Bush administration had failed.

Hours after the appellate court’s decision Friday, EPA Administrator Stephen Johnson issued an advanced notice of proposed rulemaking (ANPR) soliciting public comment on whether the government should regulate greenhouse gases under the Clean Air Act.

The ANPR was issued in response to an April 2007 order by the Supreme Court (Massachusetts v. EPA) that required the agency to decide whether greenhouse gases endanger public health and welfare, or explain why it should not determine this.

The advanced notice—about 1,000 pages long—presents comments on the best-available science and asks questions about using the Clean Air Act to regulate greenhouse gases. It also reviews various petitions, lawsuits, and court deadlines before the agency.

From the outset—in introductory remarks at a press conference regarding the ANPR— Johnson was disparaging about the Act’s potential to regulate greenhouse gases. He said that potential regulations under the Act could result in “unprecedented expansion” of the agency’s authority, which would affect virtually every sector on the economy.

“Based on the analyses to date, pursuing this course of action would take decades and inevitably result in a very complicated and likely, convoluted set of regulations. If our nation is truly serious about regulating greenhouse gases, the Clean Air Act is the wrong tool for the job,” he said.
 
Concurrent with the EPA’s release of the ANPR, the White House agreed in a statement with House Energy and Commerce Committee Chairman John Dingell’s supposition that regulating greenhouse gas emissions under the Act would result in a “glorious mess.” The statement added that “the EPA staff draft would impose crippling costs on the economy in the form of a massive hidden tax, without even ensuring that the intended overall emissions reductions would occur.”

The Washington Post reported that the EPA’s solicitation for public comment ensures that the next administration will have to take up the question of regulating greenhouse gases. The newspaper noted that in June, the Senate had shelved  bipartisan legislation (the Lieberman-Warner bill) that would cap carbon dioxide emissions.

Sources: U.S. Court of Appeals for the District of Columbia, EPA, The New York Times, The White House, The Washington Post.