The U.S. Supreme Court upheld the U.S. Environmental Protection Agency’s Cross State Air Pollution Rule, otherwise known as CSAPR or the “Transport Rule,” reversing a lower court decision that had vacated that rule.  The decision means that large sources of nitrogen oxide and sulfur dioxide emissions in upwind states – especially coal-fired power plants – will be subject to more stringent air pollution control requirements going forward.

Yesterday's decision is an important victory for EPA and for the downwind states and other entities that supported the Transport Rule.  Indeed, the decision not only reinstates the Transport Rule, but also holds that EPA did not act prematurely in issuing federal implementation plans (FIPs) for that rule.

But the decision does leave room for some state-specific implementation-related challenges on remand.  Most notably, the Supreme Court held that EPA lacks authority to require certain types of “over-control,” meaning that EPA cannot require an upwind state to reduce its emissions beyond (i) the amount needed to achieve attainment with applicable air quality standards in every downwind state to which it is linked or (ii) the point at which the upwind state is no longer contributing more than one percent of the air pollution problem in every downwind state to which it is linked.  Thus, to the extent that the Transport Rule, or an individual FIP, requires such “over-control,” the affected upwind state should be able to challenge that aspect of the rule, or the FIP, on remand.  In the Supreme Court’s words:  “If any upwind State concludes it has been forced to regulate emissions below the one-percent threshold or beyond the point necessary to bring all downwind States into attainment, that State may bring a particularized, as applied challenge to the Transport Rule, along with any other as-applied challenges it may have.”

Nevertheless, the overall takeaway from today’s decision is that the lower court was wrong to vacate the Transport Rule and that EPA is entitled to considerable deference in how it implements the Clean Air Act’s “good neighbor” provision.  The Supreme Court endorsed EPA’s overall approach to reducing interstate air pollution, even if it left open the possibility that some individual states may be able to challenge the state-specific application of that approach.