Clean Air Interstate Rule: Changes and modeling in AEO2010 
On December 23, 2008, the D.C. Circuit Court remanded but did not vacate CAIR [17], overriding its previous decision on February 8, 2008, to remand and vacate CAIR. The December decision, which is reflected in AEO2010, allows CAIR to remain in effect, providing time for the EPA to modify the rule in order to address objections raised by the Court in its earlier decision. A similar rule, referred to as the CAMR, which was to set up a cap-and-trade system for reducing mercury emissions by approximately 70 percent, is not represented in the AEO2010 projections, because it was vacated by the D.C. Circuit Court in February 2008. 

CAIR, which was promulgated by the EPA in 2005, was designed to achieve further reductions in emissions of sulfur dioxide (SO₂) and nitrogen oxides (NO_x) beyond those established in the 1990 CAA Amendments. The emissions reductions mandated by the rule were put in place to assist States in meeting their National Ambient Air Quality Standards for ground-level ozone and particulate matter. The EPA identified 28 States and the District of Columbia to participate in the program, because they either were not meeting the standards themselves or were contributing to emissions in downwind States that were out of compliance. When fully implemented, CAIR was designed to cap SO₂ emissions at 2.5 million tons and NO_x emissions at 1.3 million tons in the affected States [18]. States could comply with the limits either by participating in a cap-and-trade system or by developing their own strategies to achieve their required reduction shares. 

The annual NO_x emissions trading program developed for CAIR commenced in 2009. SO₂ emissions caps under the rule will take effect in 2010. Meanwhile, the EPA is developing a new CAIR designed to address the shortcomings identified by the court. The EPA expects to release a proposal for the replacement CAIR in May 2010 [19]. There is also a possibility that legislative action could be taken to develop new standards, but because the AEO does not anticipate future laws or regulations, AEO2010 assumes that the long-term reduction goals of CAIR will be met through the existing cap-and-trade system specified in the current rule.

Footnotes:
17. U.S. Court of Appeals for the District of Columbia Cir-cuit, No. 05-1244, web site www.epa.gov/airmarkets/ progsregs/cair/docs/CAIRRemandOrder.pdf.

18. U.S. Environmental Protection Agency, Fact Sheet: Clean Air Interstate Rule (CAIR): Cleaner Air, Healthier Air, and a Strong America (not dated), web site www.epa.gov/interstateairquality/pdfs/cair_final_ fact.pdf.

19. ClimateWire, web site www.eenews.net/eenewspm/ 2009/05/11/archive/2?terms=CAIR (subscription site).