EPA Releases Final Interstate Transport Rule, “Cross-State Air Pollution Rule”

July 7, 2011

On July 6, 2011, EPA released its final Cross-State Air Pollution Rule (CSAPR), also referred to as the “Transport Rule.” CSAPR establishes an allowance trading system to reduce emissions of nitrogen oxide (NOx) and sulfur dioxide (SO2) air pollutants from power plants in 27 upwind, eastern states that adversely affect efforts of other states to achieve or maintain EPA’s National Ambient Air Quality Standards (NAAQS). (76 Fed. Reg. 48,208). Together with several other recent or proposed EPA regulations of conventional air pollutants, the rule is projected to result in reductions of greenhouse gases from the power sector by accelerating retirements of older, inefficient coal-fired power plants.

CSAPR replaces the 2005 Clean Air Interstate Rule (CAIR), which was struck down in North Carolina v. EPA on the grounds that CAIR’s region-wide cap-and-trade structure did not address the effects of emissions from each particular state on downwind states. (531 F.3d 896, (D.C. Cir. 2008)). CSAPR addresses these concerns by establishing individual state emissions budgets based on the emissions reductions that each upwind state must achieve to prevent it from unlawfully interfering with other states efforts to achieve the NAAQS. CASPR also includes an “assurance provision” which requires a state’s covered sources to surrender additional allowances if the state’s overall emissions threshold is exceeded.

EPA estimates CSAPR will reduce emissions of CO2 from power plants by 25 million metric tons annually by 2014, equal to approximately 1.1% of total domestic electricity sector emissions. The reductions are projected to result from the accelerated retirement of inefficient, older power plants. (CSAPR Regulatory Impact Analysis, Docket ID No. EPA-HQ-OAR-2009-0491).

More information: Georgetown Climate Center summarized EPA’s regulation of greenhouse gases in its brief “What States Need to Know About EPA Regulation of Greenhouse Gas Emissions.”