Ohio v EPA and the Future of the ‘Good Neighbor’ Rule

On 27 June 2024, the Supreme Court of the United States (SCOTUS) ruled in favor of a group of states and industry representatives against the U.S. Environmental Protection Agency (EPA) to issue a stay on the EPA’s Good Neighbor Rule. The rule, which required 23 states to reduce emissions impacting downwind states, was intended to protect public health. However, a 5-4 majority of the court ruled that the EPA’s plan was likely “arbitrary and capricious” and temporarily halted the rule’s enforcement while suits against the rule proceed through lower courts.

Despite recent rulings in the current session by SCOTUS in favor of the EPA, the decision in Ohio v. EPA shows how the court has consistently limited the scope of federal regulatory authority, especially in relation to how the EPA regulates climate change-related factors. Just before this decision, SCOTUS ruled against federal regulators by overturning the precedent set by Chevron USA v. Natural Resources Defense Council, Inc.

The Good Neighbor Rule

The Good Neighbor Rule comes from the Clean Air Act’s “good neighbor” provision, which mandates that “upwind” states take responsibility for pollutants that drift into “downwind” states. This provision aimed to mitigate the effects of transboundary ozone pollution, which has been shown to trigger or worsen conditions such as asthma, bronchitis, or emphysema.

In October 2015, the EPA updated the national ambient air quality standards (NAAQS) for ozone pollution and required individual states to submit plans for meeting the new standards. When 21 states submitted plans without proposing significant changes and two states failed to submit plans entirely, the EPA enacted a Federal Implementation Plan (FIP). This FIP required the 23 states to implement more efficient pollution controls by 2023 and apply widely used technologies by 2026. It also includes the Cross-State Air Pollution Rule Trading Program designed to balance compliance across state lines.