ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Lessons from a US Court Judgment

Clean Air, Federalism and Democracy

The United States Supreme Court's 29 April 2014 opinion has in it the elements of both further pressure on India for providing greater access to US markets for renewable energy technologies and relevance for the resolution of India's interstate disputes. This article explains the salient points.

The case1 centres on the third attempt of the Environmental Protection Agency (EPA) to interpret the Good Neighbour Provision of the Clean Air Act (CAA) of 1963. The CAA requires EPA to establish National Ambient Air Quality Standards (NAAQS) for pollutants at levels that will protect public health. After establishing a NAAQS, EPA determines “non-attainment” areas, i e, locations where the concentration of a regulated pollutant exceeds the NAAQS. Each state is required to submit a state implementation plan (SIP) to EPA within three years of the NAAQS. From the date EPA determines that an SIP is inadequate, EPA has two years to announce a federal implementation plan (FIP). The CAA mandates SIP compliance with its Good Neighbour Provision, which requires SIPs to

…contain adequate provisions… prohibiting…. any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will…contribute significantly to non-attainment in, or interfere with maintenance by, any other State with respect to any…. (NAAQS).2

Under the EPA’s rule challenged here – the Transport Rule – an upwind state “contribute[d] significantly” to downwind non-attainment to the extent its exported pollution both produced at least 1% of a NAAQS in at least one downwind state and could be eliminated cost-effectively, as determined by EPA. Upon challenge by a group of states, and local governments, industry and labour groups, the DC Circuit Court by a margin of 2-1 vacated the Transport Rule in 2012 in favour of the industry and certain states on the main ground that EPA exceeded its authority under the Good Neighbour Provision which requires EPA to consider only each upwind state’s physically proportionate responsibility for each downwind state’s air quality problem.

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