Tuesday, December 23, 2008

CAIR Reinstated Pending EPA Revision of Rule

The D.C. Circuit decided today 12/23 decision to temporarily reinstate the Clean Air Interstate Rule (CAIR),EPA CAIR webpage  but the program to reduce power-plant emissions of NOx and SOx will need to be revised due to the court's finding of "fundamental flaws" in the CAIR cap-and-trade provisions.  The court on rehearing decided against vacatur, striking down the rule altogether, as its July decision had done.  July CAIR decision   The industry petitioners, the government, and environmentalists had agreed in their responses to the court that vacatur was not a desirable remedy.  The CAIR rule, which takes effect at the beginning of the year, is reinstated until EPA crafts a new program consistent with the court's determination that allowing utilities to freely trade SO2 emissions credits, banking early credits and using them in later years, violates the Title IV acid rain provisions of the Clean Air Act.  Whether through legislative action or rulemaking, the process of revising the rule is likely to require at least two or three  years. The SO2 emissions market reportedly rallied today after the court decision, trading up from yesterday's close of $148 to more than $200 per allowance,

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