Environmental Permitting

CSAPR and Federalism

The concept of federalism governs the general relationship between the federal government and the states.  Federalism is a critical component of Title I of the Clean Air Act (CAA), wherein a partnership is established between the EPA and the states in which the EPA sets air standards and then leaves it to the states to determine how to meet those standards. 

According to the court, the EPA violated this principle by denying the states the first opportunity to implement solutions to interstate air pollution.  Specifically, the flaws the court found in the CSAPR included EPA’s issuance of a federal implementation plan (FIP) that preempted state implementation plans (SIPs) the upwind states developed to control air pollution that makes it virtually impossible for downwind states to attain several National Ambient Air Quality Standards (NAAQS) in certain geographic areas. 


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Good Neighbors

The EPA is mounting a spirited defense of the CSAPR.  The Agency has contended that many state SIPs did not address the CAA’s “good neighbor” provision, which requires that SIPs include measures to ensure that emissions will not interfere with attainment or maintenance of the NAAQS in other states.  If a state submits an inadequate SIP, the EPA must issue a FIP within 2 years of finding the SIP inadequate, which the EPA did.  

But the D.C. Circuit asserted that the upwind states could not address the good neighbor provisions in their SIPs until the EPA determined the significant contributions those states made to interstate pollution.  The court maintains that the Agency did not make those determinations.  One consequence of this nondetermination, said the court, is that the EPA could then force states to reduce emissions beyond their significant contributions. 

The EPA has appealed the D.C. Circuit’s ruling to the U.S. Supreme Court.  In its petition, the EPA states that it has substantial legal latitude to define significant contribution based on the amount of emissions reductions achievable through application of “highly-cost effective” controls.  The Agency claimed that the D.C. Circuit majority “read several statutory commands of its own invention into the ambiguous term ‘significant contribution’ and faulted the EPA for not complying with those directives.”  The Agency added that the D.C. Circuit’s analysis “recalibrates Congress’s statutory scheme and vision of cooperative federalism.” 


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More on Federalism

In August 1999, President Clinton signed Executive Order (EO) 13132 (Federalism), which directs federal agencies to determine if federalism is a factor during rule development.  If it is, the EO requires that it be considered during of the rulemaking.  The intent of the EO is to “guarantee the division of governmental responsibilities between the national government and the States that was intended by the Framers of the Constitution” and “to ensure that the principles of federalism established by the Framers guide the executive departments and agencies.” 

Interestingly, in the preamble to the CSAPR, the EPA stated that the rule had no federalism implications.  One interpretation of the D.C. Circuit’s ruling is that the EPA is having trouble adhering to the spirit and specifics of the EO.  Following are several points taken from the EO that will inform the continuing discussion over the CSAPR and, probably, other EPA policy actions.

  • Federalism is rooted in the belief that issues that are not national in scope or significance are most appropriately addressed by the level of government closest to the people.
  • The Framers recognized that the states possess unique authorities, qualities, and abilities to meet the needs of the people and should function as laboratories of democracy.
  • In the search for enlightened public policy, individual states and communities are free to experiment with a variety of approaches to public issues.  One-size-fits-all approaches to public policy problems can inhibit the creation of effective solutions to those problems. 
  • The national government should be deferential to the states when taking action that affects the policymaking discretion of the states and should act only with the greatest caution where state or local governments have identified uncertainties regarding the constitutional or statutory authority of the national government.
  • When formulating and implementing policies that have federalism implications, agencies shall encourage states to develop their own policies to achieve program objectives and to work with appropriate officials in other states and,  where possible, defer to states to establish standards.
  • Agencies shall construe, in regulations and otherwise, a federal statute to preempt state law only where the statute contains an express preemption provision or there is some other clear evidence that Congress intended preemption of state law, or where the exercise of state authority conflicts with the exercise of federal authority under the federal statute.

Support for EPA

Federalism is only one of many complex legal issues surrounding the CSAPR.  Should the Supreme Court decide not to hear the case, the Agency will need to rewrite the rule.  EPA’s petition for a writ of certiorari is supported by a coalition of 15 downwind states and cities and many environmental groups.

See the D.C. Circuit’s opinion in EME Home City Generation, L.P. v. EPA.  Also, see EPA’s petition to the Supreme Court.