Air Quality: EPA's Proposed Interstate Air Quality Rule

Publication Date: March 2004

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Environment

Type:

Abstract:

On December 17, 2003, the Environmental Protection Agency (EPA) issued a proposed rule to address the effect of interstate transport of air pollutants on nonattainment of the National Ambient Air Quality Standards (NAAQS) for fine particulates (PM2.5) and ozone (specifically, the 8-hour standard). The proposed Interstate Air Quality (IAQ) rule appeared in the Federal Register January 30, 2004. For PM2.5, the proposed rule finds that the interstate transport of sulfur dioxide (SO2) and nitrogen oxides (NOx) from 28 states and the District of Columbia contributes significantly to downwind non-attainment; for ozone, the proposed rule finds that interstate transport of NOx from 25 states and D.C. contributes significantly to downwind non-attainment of the 8-hour standard.

With the IAQ rule, EPA proposes a region-wide emissions cap for NOx and SO2 to be implemented in two phases -- 2010 and 2015. Based on the methodology employed in the proposed rule, EPA estimates reductions of about 70% from baseline emissions in 2015. EPA's methodology determined the caps by applying "highly cost effective" pollution controls on electric generating units.

EPA has presented the proposed IAQ rule and the accompanying proposed Mercury (Hg) rule as a "suite of integrated air actions" to reduce emissions of three pollutants -- SO2, NOx, and Hg. The two proposed rules are integrated in such a way that the technologies reducing SO2 and NOx emissions under the IAQ rule also reduce enough Hg emissions to meet the modest 2010 reduction requirements of the proposed Hg rule. This combination of requirements and technology allows utilities to meet the requirements of both rules without installing three different control technologies -- one for each pollutant. As EPA does not provide a cost-benefit analysis of Hg reductions, it is not possible to quantitatively determine whether this decision is economically efficient in terms of potential Hg benefits foregone by not imposing a more stringent reduction requirement.

However, from the broader perspective of the interaction of the proposed rules with the underlying Clean Air Act (CAA), there is a resulting lack of integration. It is likely to be argued that the proposed rule simply represents another layer on an already multi-layered cake called the Clean Air Act. Adding a regionwide annual cap and trade program onto a regulatory structure whose foundation is health-based national standards that focus on the local concentration of pollutants in the ambient air presents numerous difficulties. As a result, there are multiple inconsistencies between the proposed rule and other provisions of the CAA. These conflicts are not surprising -- there is little EPA can do to resolve them out by regulation. If the Administration's goal is to restructure CAA compliance strategies toward marketoriented cap and trade programs without creating more layers and conflicts, it is possible a statutory solution will be necessary. This report will be updated if events warrant.