EPA Aims to Combat Dirty Air With Trading Systems

The Environmental Protection Agency announced regulatory proposals Thursday for controlling air pollution, taking a major step toward making market-based trading systems the tool of choice for addressing air quality problems caused by power plants.

The agency identified 534 counties in 32 states that have air pollution levels that exceed new eight-hour health-based standards for ground-level ozone or smog. After this proposed program is made final early next year, states will be required to adopt pollution control strategies to meet the new standards in these counties, many of which have never before have been required to regulate air emissions. Almost the entire southern half of California violates the new standard.

Taken together, the proposals represent “the single most important step we can take right now to improve air quality in the United States,” EPA Administrator Mike Leavitt said in an interview.

The administration’s plan includes two systems of controlling power plant emissions by giving each plant a permit to emit a fixed amount of pollution and allowing the cleaner plants to sell their excess allowances to plants that throw off more than their share of pollutants. One such “cap and trade” system would govern nitrogen oxides and sulfur oxide; the other would limit mercury.

If the Bush administration adopts such plans after formally proposing them this month, it would accomplish administratively much of what it has failed to do legislatively. President Bush’s “Clear Skies” initiative, designed to cut air pollution from power plants but maligned by public health advocates and environmentalists as too weak, has stalled in Congress.

“We can’t afford to wait,” Leavitt said.

EPA officials said the cap-and-trade system for sulfur dioxide and nitrogen oxides would help state officials meet the new air-quality standards for ground-level ozone because it would cut the pollution that blows in from other states. By gradually reducing the pollution permits in circulation, EPA would cut sulfur dioxide emissions by 70% and nitrogen oxide emissions by 50%.

The proposed mercury cap-and-trade system, which focuses on coal-burning power plants, would use a similar mechanism to reduce emissions from 48 tons to 15 tons by 2018, officials said.

Neither cap and trade system would apply in California, where power plant emissions are already stringently controlled, officials said.

Utility industry representatives were reluctant to comment before seeing the full text of the proposed regulations. Many of them support the Clear Skies initiative, which has similar pollution reduction targets and mechanisms for reaching them.

Public health officials, state regulators and environmental advocates applauded the designations of areas that need to improve their air quality. “EPA has recommended protective smog boundaries that will help establish the framework for states to put in place effective pollution cleanup plans to protect children with asthma and other vulnerable populations from harmful smog,” said Vickie Patton, an attorney for Environmental Defense, an environmental group.

“We are thrilled to death,” said John Sheehan, spokesman for the Adirondack Council, an environmental group.

But activists warned that the mercury initiative would not push power plants to cut emissions fast or far enough. They said EPA failed to analyze the costs and benefits of a more stringent rule for mercury, despite requests from an EPA-appointed advisory group and members of Congress.

The new eight-hour ozone standards, required by the 1990 Clean Air Act amendments, were set in 1997 but delayed by challenges from industry until the Supreme Court upheld them in 2001. States had recommended that 427 counties be listed as exceeding the standards, short of the 534 identified by the EPA.

Counties are reluctant to be on the list of ozone non-attainment areas because their businesses know they will face tighter regulation.

“It’s a stigma,” said Bill Kovacs, vice president for environment, technology and regulatory affairs at the U.S. Chamber of Commerce. “In a non-attainment area, bringing in new business is much more difficult.”

The federal proposal to reclassify communities for smog would nudge scores of California communities from clean-air zones into the polluted category and trigger a new round of cleanup regulations.

“It’s a big change. We are doing everything we can already to clean up, so this is just going to make it even more difficult,” said Bill Quinn, vice president of the California Council for Environmental and Economic Balance.

Virtually the entire southern half of California would be designated as unhealthful for ozone, the main ingredient of smog. New smog centers would include the Sierra foothills, much of the High Desert and farming communities north of Sacramento. Some communities, including San Francisco, San Diego and Ventura, have already met the old ozone standard or will soon, yet would be reclassified as dirty-air cities again and be required to redouble cleanup efforts.

The new limit measures ozone over an eight -hour period, a more accurate look at air quality throughout the day, rather than over just one-hour peak levels measured in the worst time of day under the old system.

California environmentalists and air quality officials objected to the EPA’s proposal to eliminate the one-hour standard. The state’s entire regulatory apparatus is geared toward attaining the one-hour standard by a federal deadline of 2010.