US Supreme Court halts EPA's 'good neighbor' rule on downwind pollution

The Environmental Protection Agency will not be able to enforce a key rule limiting air pollution in nearly a dozen states while separate legal challenges proceed around the country, under a Supreme Court decision Thursday.

The EPA’s "good neighbor" rule is intended to restrict smokestack emissions from power plants and other industrial sources that burden downwind areas with smog-causing pollution.

Three energy-producing states — Ohio, Indiana and West Virginia — challenged the rule, along with the steel industry and other groups, calling it costly and ineffective. The rule is on hold in a dozen other states because of the court challenges.

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The Supreme Court put the rule on hold while legal challenges continue, the conservative-led court’s latest blow to federal regulations.

The high court, with a 6-3 conservative majority, has increasingly reined in the powers of federal agencies, including the EPA, in recent years. The justices have restricted EPA’s authority to fight air and water pollution, including a landmark 2022 ruling that limited EPA’s authority to regulate carbon dioxide emissions from power plants that contribute to global warming. The court also shot down a vaccine mandate and blocked Democratic President Joe Biden’s student loan forgiveness program.

The court is also weighing whether to overturn its 40-year-old Chevron decision, which has been the basis for upholding a wide range of regulations on public health, workplace safety and consumer protections.

A look at the good neighbor rule and the implications of the court decision.

The EPA adopted the rule as a way to protect downwind states that receive unwanted air pollution from other states. Besides the potential health impacts from out-of-state pollution, many states face their own federal deadlines to ensure clean air.

States such as Wisconsin, New York and Connecticut said they struggle to meet federal standards and reduce harmful levels of ozone because of pollution from out-of-state power plants, cement kilns and natural gas pipelines that drift across their borders.

Judith Vale, New York’s deputy solicitor general, told the court that for some states, as much as 65% of smog pollution comes from outside its borders.

States that contribute to ground-level ozone, or smog, must submit plans ensuring that coal-fired power plants and other industrial sites do not add significantly to air pollution in other states. In cases where a state has not submitted a "good neighbor" plan — or where EPA disapproves a state plan — a federal plan is supposed to ensure downwind states are protected.

The EPA rule was intended to provide a national solution to the problem of ozone pollution, but challengers said it relied on the assumption that all 23 states targeted by the rule would participate. In fact, only about half that number of states were participating as of early this year.

A lawyer for industry groups that are challenging the rule said it imposes significant and immediate costs that could affect reliability of the electric grid. With fewer states participating, the rule may result in only a small reduction in air pollution, with no guarantee the final rule will be upheld, said industry lawyer Catherine Stetson.

The EPA has said power-plant emissions dropped by 18% in 2023 in the 10 states where it has been allowed to enforce its rule, which was finalized last year. Those states are Illinois, Indiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia and Wisconsin. In California, limits on emissions from industrial sources other than power plants are supposed to take effect in 2026.

The rule is on hold in another dozen states because of separate legal challenges. The states are Alabama, Arkansas, Kentucky, Louisiana, Minnesota, Mississippi, Missouri, Nevada, Oklahoma, Texas, Utah and West Virginia.

Critics, including Republicans and business groups, call the good neighbor rule an example of government overreach.

"Acting well beyond its delegated powers" under the Clean Air Act, the EPA rule "proposes to remake the energy sector in the affected states toward the agency’s preferred ends,'' Republican lawmakers said in a friend-of-the-court brief.

The rule and other Biden administration regulations "are designed to hurriedly rid the U.S. power sector of fossil fuels by sharply increasing the operating costs for fossil fuel-fired power plant operators, forcing the plants’ premature retirement," the brief by Washington Rep. Cathy McMorris Rodgers and Sens. Shelley Moore Capito of West Virginia and Roger Wicker of Mississippi asserted. Rodgers chairs the House Energy and Commerce Committee, while Capito and Wicker are senior members of the Senate Environment and Public Works Committee.

Supporters disputed that and called the "good neighbor'' rule critical to address interstate air pollution and ensure that all Americans have access to clean air.

"These limits are crucial components of federal and state efforts under the Clean Air Act to protect public health, especially for vulnerable groups such as children, the elderly and those with preexisting health conditions,'' said Prof. Christophe Courchesne, director of the Environmental Advocacy Clinic at Vermont Law and Graduate School.

Ground-level ozone, which forms when industrial pollutants chemically react in the presence of sunlight, can cause respiratory problems, including asthma and chronic bronchitis. People with compromised immune systems, the elderly and children playing outdoors are particularly vulnerable.

The rule applies mostly to states in the South and Midwest that contribute to air pollution along the East Coast. Some states, such as Texas, California, Pennsylvania, Illinois and Wisconsin, both contribute to downwind pollution and receive it from other states.