Talk
about pressure.

Less
than a week after he was tapped by President Bush to head the Environmental
Protection Agency, the administration’s faltering clean-air policy forced Acting
EPA Administrator Steve Johnson into the spotlight.

On
March 9, the president’s Clear Skies legislation stalled in the Senate
Environment and Public Works committee. Time for plan B.

The
next day, the EPA announced its Clean Air Interstate Rules, which cut emissions
in 28 eastern states and the District of Columbia. Discharge levels similar to
those that would have been enacted legislatively through Clear Skies will
instead take effect as regulations.

Yet
despite some overlap between the bill — which environmentalists fought —
and the rules, many environmentalists are hailing the latter as progress. The
Adirondack Council (which championed Clear Skies for a time, much to the
consternation of fellow environmental groups) labeled the new EPA rules “the
largest reduction in power plant emissions in American history.”

Many
environmentalists objected to Clear Skies, since it would have made it harder
for a state to take legal action against power plants in another state. It also
failed to address carbon dioxide emissions, a leading cause of global warming.
And many environmentalists considered it too lenient on mercury. Those sticking
points didn’t find their way into the rules, and for now a delicate détente
prevails between the administration and environmentalists.

Here’s
how the new rules work: The EPA sets state-by-state limits for two key
pollutants: nitrogen oxides (NOx) and sulfur dioxides (SO2). (Monroe, Ontario,
Orleans, Wayne, Genesee and Livingston Counties all exceed healthy standards of
ground level ozone, which NOx helps form.) Then each state meets those limits
any way it sees fit.

The
new rules strongly encourage a “cap-and-trade” system. Under such a system, a
cleaner plant releasing fewer pollutants than its allotted amount can sell the
right to discharge those extra pollutants to dirtier plants. Individual plants
might release more or less of the unwanted pollutants, but the overall levels
drop.

“The
CAIR rule doesn’t require cap and trade,” says EPA spokesperson Mary Mears. “It
sets caps and it allows for trading, but states don’t have to buy into that.
Each state will decide whether it wants to participate in the program or
whether it wants to simply go to its power plants and say you’re cutting your
emissions by X and that’s what we need to do to meet the cap. New York can do
whatever it wants to do, as long as its emissions do not exceed that.”

But
Mears predicts states will enter the informal program. “As a practical matter,
states — including New York State — have supported trading programs in the
past,” she says, “and we would certainly expect that they would opt to join,
because that gives the facilities in their state more flexibility. If you don’t
join the federal program, then the facilities inside, say, New York State can’t
trade with Ohio plants or what have you.”

“And
it is more likely,” says Mears, “that the plants, by the way, in the Northeast
are going to tend to be the plants that already have the controls or are closer
to having the right controls and will tend to have the allocations to sell. So
of course it benefits them to be able to sell those allocations.”

It
also benefits companies that own multiple power plants in several states.
That’s because plants owned by the same corporation can trade with each other,
reducing the number of costly smokestack modifications the company needs to
make.

But
Mears says the EPA is looking at the total emissions picture.

“The
states and EPA don’t really care so much how the trading is done. What we care
[about] is at the end of the day have you paid the piper,” she says. “Is the
state meeting that emission level?”

The rules have
earned tepid approval from both ideological sides of the debate. While the Bush
Administration offered muted approval of the rules, the president continues to
call for Clear Skies’ legislative changes.

On
the opposite side, statewide environmental groups expressed lukewarm optimism.
With the caveat that they hadn’t finished reviewing the rules’ final language,
Environmental Advocates of New York’s Christine Vanderlan offered this
assessment:

“The
level of reductions isn’t quite as soon or as steep as we would have liked to
see happen, but it’s not nearly like the Clear Skies legislation, which had a
mountain of rollbacks in it for the current Clean Air Act.”

Vanderlan
joined representatives from NYPIRG and the Adirondack Mountain Club in a press
release calling the rules “a mixed bag” for New York’s air quality. She and
other environmental groups complain that the Clean Air Act requires the EPA to enforce
each plant individually, not issue blanket reductions in state emission levels.

“That’s
the whole conundrum that kept it from being enforced,” says the Adirondack
Council’s John Sheehan. “That’s what caused the federal government to
essentially give up on enforcing New Source Review.” (Existing power plants
were grandfathered into the Clean Air Act; New Source Review is a provision in
the act requiring those plants to add cleaning equipment when renovating.) When
the EPA tried to enforce NSR, the power companies usually managed to get the
actions tied up in endless legal battles, says Sheehan.

“We
don’t have enough lawyers and EPA enforcement officials to go after every
smokestack,” he says. “This seems to guarantee that the Clean Air Act will be
carried out.”

Here’s
why he believes that: The going rate to buy the right to emit a ton of sulfur
dioxide during a year is about $680 dollars. By contrast, power plants
grandfathered under the Clean Air Act can add the technology to cut SO2 for
$300 to $400 a ton. That means that cap-and-trade provides the right incentive
to get the dirtiest plants to clean up, says Sheehan.

“In
terms of the fastest and deepest cuts, that’s the way to achieve them,” he
says.

For more
information, including figures for New York, visit www.epa.gov/cair/.

This article appears in Mar 16-22, 2005.