All states in designated non-attainment area must include Reasonably Attainable Control Measures and Technologies in State Implementation Plans (acronyms omitted!)

by Hannah Dankbar

Sierra Club v Environmental Protection Agency
Federal 6th Circuit Court of Appeals, March 18, 2015

In 2011 the EPA reported that the Cincinnati-Hamilton metropolitan area attained national air quality standards for particulate matter. A regional cap-and-trade program helped the area reach this standard. The EPA gave the area “attainment” status, even though the three States that administer its pollution controls never implemented the provisions known as “reasonably available control measures” (RACM) that apply to nonattainment areas. Sierra Club filed a complaint against the EPA for acting illegally.

The Clean Air Act (CAA) allows the EPA to add different kinds of emissions that can damage public health to the National Ambient Air Quality Standards. When an emission is added to this list each state must submit a State Implementation Plan (SIP) for achieving the standard. After receiving the plan the EPA will designate areas in each state as “attainment areas” (areas that attain the standard), “nonattainment areas” (areas that do not) or “unclassifiable areas”. If a state has “nonattainment areas” the state, or states, must revise their plan to meet additional requirements. One requirement is “RACM”, or “RACT”, which requires that the SIP “provide for the implementation of all reasonable available control measures (RACM) as expeditiously as practicable (including such reductions in emissions from existing sources in the area as may be obtained through the adoption, at a minimum, or reasonably available control technology (RACT) and shall provide for attainment of the national primary ambient air quality standards.” Id. 7502(c)(1). There are five conditions that must be met in order for the EPA to switch a “nonattainment area” to an “attainment area.”

To address areas of concern along state lines, the EPA created a cap-and-trade system. A “cap” is set on allowable emissions; anybody who has emissions above this limit can either invest in clean technology or “trade” emission credits with another entity.

Sierra Club argued that the improvement in area quality that could be attributed to the cap-and-trade program was not “permanent and enforceable reductions in emissions” required under the CAA, and that the nonattainment State Implementation Plan (SIP) had never been implemented. The State of Ohio and the local utility company joined the EPA in disagreement. The EPA claims that Sierra Club does not have standing in this matter and they challenge the interpretation of the CAA.  After addressing the standing questions (it was determined that the Sierra Club did have standing) the court addressed the CAA interpretation argument.

Sierra Club first questioned EPA’s interpretation of a provision of the CAA that bars redesignation to attainment unless “the Administrator determines that the improvement in air quality is due to permanent and enforceable reductions in emissions resulting from implementation of the applicable implementation plan and applicable Federal air pollutant control regulations and other permanent and enforceable reductions[.]” Sierra Club claimed that the cap-and-trade system is not “permanent and enforceable” because a company could simply buy more credits from polluters outside the nonattainment area and increase their emissions. Sierra Club wanted “permanent and enforceable reductions in the nonattainment area”. The EPA acknowledged that the statute does not clarify from which area the reduction comes from. The court decided that the statute is “sufficiently ambiguous” to clear the first part of the test.

In the question of whether the EPA’s interpretation is a permissible construction of the statute, they found that this rested on the acknowledgement of regional problems. The EPA acknowledged that the pollution is a regional problem. The court did not see the word ‘permanent’ as being sufficient enough to close cap-and-trade programs. Neither Congress nor Sierra Club offered a definition of enforceable. From the statute it does not appear that Congress intended cap-and-trade programs to be excluded. This is enough to conclude that their focus is “sufficiently rational” and within the statutory limits and blocks the warrant for deference to their technical expertise.

Sierra Club challenged EPA’s approval of the state’s SIPs without RACM/RACT. Indiana and Ohio did not have these provisions in their plans. A state seeking redesignation “shall provide for the implementation” of RACM/RACT, even if those measures are not strictly necessary to demonstrate attainment. If the State has not done so, EPA cannot “fully approve” the area’s SIP, and redesignation to attainment status is improper.

Because the Ohio and Indiana SIPs for their respective portions of the Cincinnati-Hamilton area did not provide for RACM/RACT, the EPA acted in violation of the CAA when it approved those redesignation requests. The court ordered the EPA to reject the redesignation of Ohio and Indiana’s portions of the Cincinnati-Hamilton area, and leave the Kentucky area as was originally defined.

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