NOTICE: This opinion is subject to
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SUPREME COURT OF THE UNITED STATES
_________________
Nos. 12–1182 and 12–1183
_________________
ENVIRONMENTAL PROTECTION AGENCY
et al.,PETITIONERS
12–1182 v.
EME HOMER CITY GENERATION, L. P.,
et al.; and
AMERICAN LUNG ASSOCIATION
et al.,PETITIONERS
12–1183 v.
EME HOMER CITY GENERATION, L. P.,
et al.
on writs of certiorari to the united states
court of appeals for the district of columbia circuit
[April 29, 2014]
Justice Ginsburg
delivered the opinion of the Court.
These cases concern the
efforts of Congress and the Environmental Protection Agency (EPA or
Agency) to cope with a complex problem: air pollution emitted in
one State, but causing harm in other States. Left unregulated, the
emitting or upwind State reaps the benefits of the economic
activity causing the pollution without bearing all the costs. See
Revesz, Federalism and Interstate Environmental Externalities, 144
U. Pa. L. Rev. 2341, 2343 (1996). Conversely, downwind
States to which the pollution travels are unable to achieve clean
air because of the influx of out-of-state pollution they lack
authority to control. See S. Rep. No. 101–228, p. 49 (1989).
To tackle the problem, Congress included a Good Neighbor Provision
in the Clean Air Act (Act or CAA). That provision, in its current
phrasing, instructs States to prohibit in-state sources “from
emitting any air pollutant in amounts which will . . .
contribute significantly” to downwind States’ “nonattainment
. . . , or interfere with maintenance,” of any
EPA-promulgated national air quality standard. 42
U. S. C. §7410(a)(2)(D)(i).
Interpreting the Good
Neighbor Provision, EPA adopted the Cross-State Air Pollution Rule
(commonly and hereinafter called the Transport Rule). The rule
calls for consideration of costs, among other factors, when
determining the emission reductions an upwind State must make to
improve air quality in polluted downwind areas. The Court of
Appeals for the D. C. Circuit vacated the rule in its
entirety. It held, 2 to 1, that the Good Neighbor Provision
requires EPA to consider only each upwind State’s physically
proportionate responsibility for each downwind State’s air quality
problem. That reading is demanded, according to the D. C.
Circuit, so that no State will be required to decrease its
emissions by more than its ratable share of downwind-state
pollution.
In Chevron
U. S. A. Inc. v. Natural Resources Defense Council, Inc.,
467 U. S. 837 (1984) , we reversed a D. C. Circuit
decision that failed to accord deference to EPA’s reasonable
interpretation of an ambiguous Clean Air Act provision. Satisfied
that the Good Neighbor Provision does not command the Court of
Appeals’ cost-blind construction, and that EPA reasonably
interpreted the provision, we reverse the D. C. Circuit’s
judgment.
I
A
Air pollution is
transient, heedless of state boundaries. Pollutants generated by
upwind sources are often transported by air currents, sometimes
over hundreds of miles, to downwind States. As the pollution
travels out of state, upwind States are relieved of the associated
costs. Those costs are borne instead by the downwind States, whose
ability to achieve and maintain satisfactory air quality is
hampered by the steady stream of infiltrating pollution.
For several reasons,
curtailing interstate air pollution poses a complex challenge for
environmental regulators. First, identifying the upwind origin of
downwind air pollution is no easy endeavor. Most upwind States
propel pollutants to more than one downwind State, many downwind
States receive pollution from multiple upwind States, and some
States qualify as both upwind and downwind. See Brief for Federal
Petitioners 6. The overlapping and interwoven linkages between
upwind and downwind States with which EPA had to contend number in
the thousands.[
1]
Further complicating
the problem, pollutants do not emerge from the smokestacks of an
upwind State and uniformly migrate downwind. Some pollutants stay
within upwind States’ borders, the wind carries others to downwind
States, and some subset of that group drifts to States without air
quality problems. “The wind bloweth where it listeth, and thou
hearest the sound thereof, but canst not tell whence it cometh, and
whither it goeth.” The Holy Bible, John 3:8 (King James Version).
In crafting a solution to the problem of interstate air pollution,
regulators must account for the vagaries of the wind.
Finally, upwind
pollutants that find their way downwind are not left unaltered by
the journey. Rather, as the gases emitted by upwind polluters are
carried downwind, they are transformed, through various chemical
processes, into altogether different pollutants. The offending
gases at issue in these cases—nitrogen oxide (NOX) and sulfur
dioxide (SO2)—often develop into ozone and fine particulate matter
(PM2.5) by the time they reach the atmospheres of downwind States.
See 76 Fed. Reg. 48222–48223 (2011). See also 69 Fed. Reg.
4575–4576 (2004) (describing the components of ozone and PM2.5).
Downwind air quality must therefore be measured for ozone and PM2.5
concentrations. EPA’s chore is to quantify the amount of upwind
gases (NOX and SO2) that must be reduced to enable downwind States
to keep their levels of ozone and PM2.5 in check.
B
Over the past 50
years, Congress has addressed interstate air pollution several
times and with increasing rigor. In 1963, Congress directed federal
authorities to “encourage cooperative activities by the States and
local governments for the prevention and control of air pollution.”
77Stat. 393, 42 U. S. C. §1857a (1964 ed.). In 1970,
Congress made this instruction more concrete, introducing features
still key to the Act. For the first time, Congress directed EPA to
establish national ambient air quality standards (NAAQS) for
pollutants at levels that will protect public health. See 84Stat.
1679–1680, as amended, 42 U. S. C. §§7408, 7409 (2006
ed.). Once EPA settles on a NAAQS, the Act requires the Agency to
designate “nonattainment” areas, i.e., locations where the
concentration of a regulated pollutant exceeds the NAAQS.
§7407(d).
The Act then shifts the
burden to States to propose plans adequate for compliance with the
NAAQS. Each State must submit a State Implementation Plan, or SIP,
to EPA within three years of any new or revised NAAQS. §7410(a)(1).
If EPA determines that a State has failed to submit an adequate
SIP, either in whole or in part, the Act requires the Agency to
promulgate a Federal Implementation Plan, or FIP, within two years
of EPA’s determina-tion, “unless the State corrects the deficiency”
before a FIP is issued. §7410(c)(1).[
2]
The Act lists the
matters a SIP must cover. Among SIP components, the 1970 version of
the Act required SIPs to include “adequate provisions for
intergovernmental cooperation” concerning interstate air pollution.
§110(a)(2)(E), 84Stat. 1681, 42 U. S. C.
§1857c–5(a)(2)(E). This statutory requirement, with its text
altered over time, has cometo be called the Good Neighbor
Provision.
In 1977, Congress
amended the Good Neighbor Provision to require more than
“cooperation.” It directed States to submit SIPs that included
provisions “adequate” to “prohibi[t] any stationary source within
the State from emitting any air pollutant in amounts which will
. . . prevent attainment or maintenance [of air quality
standards] by any other State.” §108(a)(4), 91Stat. 693, 42
U. S. C. §7410(a)(2)(E) (1976 ed., Supp. II). The amended
provision thus explicitly instructed upwind States to reduce
emissions to account for pollution exported beyond their borders.
As then written, however, the provision regulated only individual
sources that, considered alone, emitted enough pollution to cause
nonattainment in a downwind State. Because it is often “impossible
to say that any single source or group of sources is the one which
actually prevents attainment” downwind, S. Rep. No. 101–228,
p. 21 (1989), the 1977 version of the Good Neighbor Provision
proved ineffective, see ibid. (noting the provision’s inability to
curb the collective “emissions [of] multiple sources”).
Congress most recently
amended the Good Neighbor Provision in 1990. The statute, in its
current form, requires SIPs to “contain adequate provisions
. . . prohibiting . . . any source or other
type of emissions activity within the State from emitting any air
pollutant in amounts which will . . . contribute
significantly to nonattainment in, or interfere with maintenance
by, any other State with respect to any . . . [NAAQS].”
42 U. S. C. §7410(a)(2)(D)(i) (2006 ed.). The controversy
before us centers on EPA’s most recent attempt to construe this
provision.
C
Three times over the
past two decades, EPA has attempted to delineate the Good Neighbor
Provision’s scope by identifying when upwind States “contribute
significantly” to nonattainment downwind. In 1998, EPA issued arule
known as the “NOX SIP Call.” That regulation limited NOX emissions
in 23 upwind States to the extent such emissions contributed to
nonattainment of ozone standards in downwind States. See 63 Fed.
Reg. 57356, 57358. In Michigan v. EPA, 213 F. 3d 663 (2000), the
D. C. Circuit upheld the NOX SIP Call, specifically affirming
EPA’s use of costs to determine when an upwind State’s contribution
was “significan[t]” within the meaning of the statute. Id., at
674–679.
In 2005, EPA issued the
Clean Air Interstate Rule, or CAIR. 70 Fed. Reg. 25162. CAIR
regulated both NOX and SO2 emissions, insofar as such emissions
contributed to downwind nonattainment of two NAAQS, both set in
1997, one concerning the permissible annual measure of PM2.5, and
another capping the average ozone level gauged over an 8-hour
period. See id., at 25171. The D. C. Circuit initially vacated
CAIR as arbitrary and capricious. See North Carolina v. EPA, 531
F. 3d 896, 921 (2008) (per curiam). On rehearing, the court
decided to leave the rule in place, while encouraging EPA to act
with dispatch in dealing with problems the court had identified.
See North Carolina v. EPA, 550 F. 3d 1176, 1178 (2008) (per
curiam).
The rule challenged
here—the Transport Rule—is EPA’s response to the D. C.
Circuit’s North Carolina decision. Finalized in August 2011, the
Transport Rule curtails NOX and SO2 emissions of 27 upwind States
to achieve downwind attainment of three different NAAQS: the two
1997 NAAQS previously addressed by CAIR, and the 2006 NAAQS for
PM2.5 levels measured on a daily basis. See 76 Fed. Reg.
48208–48209.
Under the Transport
Rule, EPA employed a “two-step approach” to determine when upwind
States “contribute[d] significantly to nonattainment,” id., at
48254, and therefore in “amounts” that had to be eliminated. At
step one, called the “screening” analysis, the Agency excluded as
de minimis any upwind State that contributed less than one percent
of the three NAAQS[
3] to any
downwind State “receptor,” a location at which EPA measures air
quality. See id., at 48236–48237.[
4] If all of an upwind State’s contributions fell below
the one-percent threshold, that State would be considered not to
have “contribute[d] signifi-cantly” to the nonattainment of any
downwind State. Id., at 48236. States in that category were
screened out and exempted from regulation under the rule.
The remaining States
were subjected to a second inquiry, which EPA called the “control”
analysis. At this stage, the Agency sought to generate a
cost-effective allocation of emission reductions among those upwind
States “screened in” at step one.
The control analysis
proceeded this way. EPA first calculated, for each upwind State,
the quantity of emissions the State could eliminate at each of
several cost thresholds. See id., at 48248–48249. Cost for these
purposes is measured as cost per ton of emissions prevented, for
instance, by installing scrubbers on powerplant
smokestacks.[
5] EPA estimated,
for example, the amount each upwind State’s NOX emissions would
fall if all pollution sources within each State employed every
control measure available at a cost of $500 per ton or less. See
id., at 48249–48251. The Agency then repeated that analysis at
ascending cost thresholds. See ibid.[
6]
Armed with this
information, EPA conducted complex modeling to establish the
combined effect the upwind reductions projected at each cost
threshold would have on air quality in downwind States. See id., at
48249. The Agency then identified “significant cost threshold[s],”
points in its model where a “noticeable change occurred in downwind
air quality, such as . . . where large upwind emission
reductions become available because a certain type of emissions
control strategy becomes cost-effective.” Ibid. For example,
reductions of NOX sufficient to resolve or significantly curb
downwind air quality problems could be achieved, EPA determined, at
a cost threshold of $500 per ton (applied uniformly to all
regulated upwind States). “Moving beyond the $500 cost threshold,”
EPA concluded, “would result in only minimal additional
. . . reductions [in emissions].” Id., at 48256.[
7]
Finally, EPA translated
the cost thresholds it had se-lected into amounts of emissions
upwind States would be required to eliminate. For each regulated
upwind State, EPA created an annual emissions “budget.” These
budgets represented the quantity of pollution an upwind State would
produce in a given year if its in-state sources implemented all
pollution controls available at the chosen cost thresholds. See
id., at 48249.[
8] If EPA’s
projected improvements to downwind air quality were to be realized,
an upwind State’s emissions could not exceed the level this budget
allocated to it, subject to certain adjustments not relevant
here.
Taken together, the
screening and control inquiries defined EPA’s understanding of
which upwind emissions were within the Good Neighbor Provision’s
ambit. In short, under the Transport Rule, an upwind State
“contribute[d] significantly” to downwind nonattainment to the
extent its exported pollution both (1) produced one percent or more
of a NAAQS in at least one downwind State (step one) and (2) could
be eliminated cost-effectively, as determined by EPA (step two).
See id., at 48254. Upwind States would be obliged to eliminate all
and only emissions meeting both of these criteria.[
9]
For each State
regulated by the Transport Rule, EPA contemporaneously promulgated
a FIP allocating that State’s emission budget among its in-state
sources. See id., at 48271, 48284–48287.[
10] For each of these States, EPA had determined that
the State had failed to submita SIP adequate for compliance with
the Good Neighbor Provision. These determinations regarding SIPs
became final after 60 days, see 42 U. S. C.
§7607(b)(1)(2006 ed., Supp. V ), and many went
unchallenged.[
11] EPA views
the SIP determinations as having triggered its statutory obligation
to promulgate a FIP within two years, see §7410(c), a view
contested by respondents, see Part II, infra.
D
A group of state and
local governments (State respondents), joined by industry and labor
groups (Industry respondents), petitioned for review of the
Transport Rule in the U. S. Court of Appeals for the
D. C. Circuit. Over the dissent of Judge Rogers, the Court of
Appeals vacated the rule in its entirety. See 696 F. 3d 7, 37
(2012).
EPA’s actions, the
appeals court held, exceeded the Agency’s statutory authority in
two respects. By promulgating FIPs before giving States a
meaningful opportunity to adopt their own implementation plans, EPA
had, in the court’s view, upset the CAA’s division of
responsibility between the States and the Federal Government. In
the main, the Court of Appeals acknowledged, EPA’s FIP authority is
triggered at the moment the Agency disapproves a SIP. See id., at
30. Thus, when a State proposes a SIP inadequate to achieve a
NAAQS, EPA could promulgate a FIP immediately after disapproving
that SIP. See id., at 32.
But the Court of
Appeals ruled that a different regime applies to a State’s failure
to meet its obligations under the Good Neighbor Provision. While a
NAAQS was a “clear numerical target,” a State’s good neighbor
obligation remained “nebulous and unknown,” the court observed,
until EPA calculated the State’s emission budget. Ibid. Without
these budgets, the Court of Appeals said, upwind States would be
compelled to take a “stab in the dark” at calculating their own
significant contribution to interstate air pollution. Id., at 35.
The D. C. Circuit read the Act to avoid putting States in this
position: EPA had an implicit statutory duty, the court held, to
give upwind States a reasonable opportunity to allocate their
emission budgets among in-state sources before the Agency’s
authority to issue FIPs could be triggered. Id., at 37.
The D. C. Circuit
also held that the Agency’s two-part interpretation of the Good
Neighbor Provision ignored three “red lines . . .
cabin[ing the] EPA’s authority.” Id., at 19. First, the D. C.
Circuit interpreted the Good Neighbor Provision to require upwind
States to reduce emissions in “a manner proportional to their
contributio[n]” to pollution in downwind States. Id., at 21. The
Transport Rule, however, treated all regulated upwind States alike,
regardless of their relative contribution to the overall problem.
See id., at 23. It required all upwind States “screened in” at step
one to reduce emissions in accord with the uniform cost thresholds
set during the step two control analysis. Imposing these uniform
cost thresholds, the Court of Appeals observed, could force some
upwind States to reduce emissions by more than their “fair share.”
Id., at 27.
According to the Court
of Appeals, EPA had also failed to ensure that the Transport Rule
did not mandate up-wind States to reduce pollution unnecessarily.
The Good Neighbor Provision, the D. C. Circuit noted, “targets
[only] those emissions from upwind States that ‘contribute
significantly to nonattainment’ ” of a NAAQS in downwind
States. Id., at 22. Pollution reduction beyond that goal was
“unnecessary over-control,” outside the purview of the Agency’s
statutory mandate. Ibid. Because the emission budgets were
calculated by reference to cost alone, the court concluded that EPA
had done nothing to guard against, or even measure, the
“over-control” potentially imposed by the Transport Rule. See
ibid.
Finally, by deciding,
at the screening analysis, that upwind contributions below the
one-percent threshold were insignificant, EPA had established a
“floor” on the Agency’s authority to act. See id., at 20, and
n. 13. Again pointing to the rule’s reliance on costs, the
Court of Appeals held that EPA had failed to ensure that upwind
States were not being forced to reduce emissions below the
one-percent threshold. See ibid.
In dissent, Judge
Rogers criticized the majority for deciding two questions that were
not, in her view, properly before the court. See id., at 40–46,
51–58. First, she addressed the majority’s insistence that FIPs
abide a State’s opportunity to allocate its emission budget among
in-state sources. She regarded the respondents’ plea to that effect
as an untimely attack on EPA’s previous SIP disapprovals. See id.,
at 40–46. Second, in Judge Rogers’ assessment, the respondents had
failed to raise their substantive objections to the Transport Rule
with the specificity necessary to preserve them for review. See
id., at 51–58. On the merits, Judge Rogers found nothing in the Act
to require, or even suggest, that EPA must quan-tify a State’s good
neighbor obligations before it promulgated a FIP. See id., at
46–51. She also disagreed with the court’s conclusion that the
Transport Rule unreasonably interpreted the Act. See id., at
58–60.
We granted certiorari
to decide whether the D. C. Circuit had accurately construed
the limits the CAA places on EPA’s authority. See 570 U. S.
___ (2013).
II
A
Once EPA has
calculated emission budgets, the D. C. Circuit held, the
Agency must give upwind States the opportunity to propose SIPs
allocating those budgets among in-state sources before issuing a
FIP. 696 F. 3d, at 37. As the State respondents put it, a FIP
allocating a State’s emission budget “must issue after EPA has
quantified the States’ good-neighbor obligations [in an emission
budget] and given the States a reasonable opportunity to meet those
obligations in SIPs.” Brief for State Respondents 20.
Before reaching the
merits of this argument, we first reject EPA’s threshold objection
that the claim is untimely. According to the Agency, this
argument—and the D. C. Circuit’s opinion accepting it—rank as
improper collateral attacks on EPA’s prior SIP disapprovals. As
earlier recounted, see supra, at 9–10, EPA, by the time it issued
the Transport Rule, had determined that each regulated upwind State
had failed to submit a SIP adequate to satisfy the Good Neighbor
Provision. Many of those determinations, because unchallenged,
became final after 60 days, see 42 U. S. C. §7607(b)(1),
and did so before the petitions here at issue were filed. EPA
argues that the Court cannot question exercise of the Agency’s FIP
authority without subjecting these final SIP disapprovals to
untimely review.
We disagree. The
gravamen of the State respondents’ challenge is not that EPA’s
disapproval of any particular SIP was erroneous. Rather,
respondents urge that, notwithstanding these disapprovals, the
Agency was obliged to grant an upwind State a second opportunity to
promul-gate adequate SIPs once EPA set the State’s emission budget.
This claim does not depend on the validity of the prior SIP
disapprovals. Even assuming the legitimacy of those disapprovals,
the question remains whether EPA was required to do more than
disapprove a SIP, as the State respondents urge, to trigger the
Agency’s statutory authority to issue a FIP.[
12]
B
Turning to the
merits, we hold that the text of the statute supports EPA’s
position. As earlier noted, see supra, at 4–5, the CAA sets a
series of precise deadlines to which the States and EPA must
adhere. Once EPA issues any new or revised NAAQS, a State has three
years to adopt a SIP adequate for compliance with the Act’s
requirements. See 42 U. S. C. §7410(a)(1). Among those
requirements is the Act’s mandate that SIPs “shall” include
provisions sufficient to satisfy the Good Neighbor Provision.
§7410(a)(2).
If EPA determines a SIP
to be inadequate, the Agency’s mandate to replace it with a FIP is
no less absolute:
“[EPA] shall
promulgate a [FIP] at any time within 2 years after the
[Agency]
“(A) finds that a
State has failed to make a required submission or finds that the
plan or plan revision submitted by the State does not satisfy the
minimum [relevant] criteria . . . , or
“(B) disapproves a
[SIP] in whole or in part,
“unless the State corrects the deficiency, and
[EPA] approves the plan or plan revision, before the [Agency]
promulgates such [FIP].” §7410(c)(1).
In other words, once EPA has found a SIP
inadequate, the Agency has a statutory duty to issue a FIP “at any
time” within two years (unless the State first “corrects the
deficiency,” which no one contends occurred here).
The D. C. Circuit,
however, found an unwritten exception to this strict time
prescription for SIPs aimed at implementing the Good Neighbor
Provision. Expecting any one State to develop a “comprehensive
solution” to the “collective problem” of interstate air pollution
without first receiving EPA’s guidance was, in the Court of
Appeals’ assessment, “set[ting] the States up to fail.” 696
F. 3d, at 36–37. The D. C. Circuit therefore required
EPA, after promulgating each State’s emission budget, to give the
State a “reasonable” period of time to propose SIPs implementing
its budget. See id., at 37.
However sensible (or
not) the Court of Appeals’ position,[
13] a reviewing court’s “task is to apply the text [of
the statute], not to improve upon it.” Pavelic & LeFlore v.
Marvel Entertainment Group, Div. of Cadence Industries Corp., 493
U. S. 120, 126 (1989) . Nothing in the Act dif-ferentiates the
Good Neighbor Provision from the several other matters a State must
address in its SIP. Rather, the statute speaks without reservation:
Once a NAAQS has been issued, a State “shall” propose a SIP within
three years, §7410(a)(1), and that SIP “shall” include, among other
components, provisions adequate to satisfy the Good Neighbor
Provision, §7410(a)(2).
Nor does the Act
condition the duty to promulgate a FIP on EPA’s having first
quantified an upwind State’s good neighbor obligations. As Judge
Rogers observed in her dissent from the D. C. Circuit’s
decision, the Act does not require EPA to furnish upwind States
with information of any kind about their good neighbor obligations
before a FIP issues. See 696 F. 3d, at 47. Instead, a SIP’s
failure to satisfy the Good Neighbor Provision, without more,
triggers EPA’s obligation to issue a federal plan within two years.
§7410(c). After EPA has disapproved a SIP, the Agency can wait up
to two years to issue a FIP, during which time the State can
“correc[t] the deficiency” on its own. Ibid. But EPA is not obliged
to wait two years or postpone its action even a single day: The Act
empowers the Agency to promulgate a FIP “at any time” within the
two-year limit. Ibid. Carving out an exception to the Act’s precise
deadlines, as the D. C. Circuit did, “rewrites a decades-old
statute whose plain text and structure establish a clear chronology
of federal and State responsibilities.” 696 F. 3d, at 47
(Rogers, J., dissenting).
The practical
difficulties cited by the Court of Appeals do not justify departure
from the Act’s plain text. See Barnhart v. Sigmon Coal Co., 534
U. S. 438 –462 (2002) (We “must presume that a legislature
says in a statute what it means and means in a statute what it says
there.” (internal quotation marks omitted)). When Congress elected
to make EPA’s input a prerequisite to state action under the Act,
it did so expressly. States developing vehicle inspection and
maintenance programs under the CAA, for example, must await EPA
guidance before issuing SIPs. 42 U. S. C.
§7511a(c)(3)(B). A State’s obligation to adopt a SIP, moreover,
arises only after EPA has first set the NAAQS the State must meet.
§7410(a)(1). Had Congress intended similarly to defer States’
discharge of their obligations under the Good Neighbor Provision,
Congress, we take it, would have included a similar direction in
that section. See Jama v. Immigration and Customs Enforcement, 543
U. S. 335, 341 (2005) (“We do not lightly assume that Congress
has omitted from its adopted text requirements that it nonetheless
intends to apply, and our reluctance is even greater when Congress
has shown elsewhere in the same statute that it knows how to make
such a requirement manifest.”).
In short, nothing in
the statute places EPA under an obligation to provide specific
metrics to States before they undertake to fulfill their good
neighbor obligations. By altering the schedule Congress provided
for SIPs and FIPs, the D. C. Circuit stretched out the
process. It allowed a delay Congress did not order and placed an
information submission obligation on EPA Congress did not impose.
The D. C. Circuit, we hold, had no warrant thus to revise the
CAA’s action-ordering prescriptions.
C
At oral argument, the
State respondents emphasized EPA’s previous decisions, in the NOX
SIP Call and CAIR, to quantify the emission reductions required of
upwind States before the window to propose a SIP closed. See Tr. of
Oral Arg. 37–39, 42–43, 45–46. In their view, by failing to accord
States a similar grace period after issuing States’ emission
budgets, EPA acted arbitrarily. See ibid.
Whatever pattern the
Agency followed in its NOX SIP call and CAIR proceedings, EPA
retained discretion to alter its course provided it gave a
reasonable explanation for doing so. Motor Vehicle Mfrs. Assn. of
United States, Inc. v. State Farm Mut. Automobile Ins. Co., 463
U. S. 29, 42 (1983) . The Agency presented such an explanation
in the Transport Rule. As noted, see supra, at 6, the D. C.
Circuit’s North Carolina decision admonished EPA to act with
dispatch in amending or replacing CAIR, the Transport Rule’s
predecessor. See 550 F. 3d, at 1178 (warning EPA that the stay
of the court’s decision to vacate CAIR would not persist
“indefinite[ly]”). Given North Carolina’s stress on expeditious
action to cure the infir-mities the court identified in CAIR, EPA
thoughtit “[in]appropriate to establish [the] lengthy transition
period” entailed in allowing States time to propose new or amended
SIPs implementing the Transport Rule emission budgets. See 76 Fed.
Reg. 48220 (citing North Carolina, 550 F. 3d 1176).
Endeavoring to satisfy the D. C. Circuit’s directive, EPA
acted speedily, issuing FIPs contemporaneously with the Transport
Rule. In light of the firm deadlines imposed by the Act, which we
hold the D. C. Circuit lacked authority to alter, we cannot
condemn EPA’s decision as arbitrary or capricious.[
14]
III
A
The D. C.
Circuit also held that the Transport Rule’s two-step interpretation
of the Good Neighbor Provision conflicts with the Act. Before
addressing this holding, we take up a jurisdictional objection
raised by EPA.
The CAA directs that
“[o]nly an objection to a rule . . . raised with
reasonable specificity during the period for public comment
. . . may be raised during judicial review.” 42
U. S. C. §7607(d)(7)(B). Respondents failed to state
their objections to the Transport Rule during the comment period
with the “specificity” required for preservation, EPA argues. See
Brief for Federal Petitioners 34–42. This failure at the
administrative level, EPA urges, forecloses judicial review. Id.,
at 34.
Assuming, without
deciding, that respondents did not meet the Act’s “reasonable
specificity” requirement during the comment period, we do not
regard that lapse as “jurisdictional.” This Court has cautioned
against “profligate use” of the label “jurisdictional.” Sebelius v.
Auburn Regional Medical Center, 568 U. S. ___, ___ (2013)
(slip op., at 6). A rule may be “mandatory,” yet not
“jurisdictional,” we have explained. See Arbaugh v. Y & H
Corp., 546 U. S. 500, 510 (2006) . Section 7607(d)(7)(B), we
hold, is of that character. It does not speak to a court’s
authority, but only to a party’s procedural obligations. See
Kontrick v. Ryan, 540 U. S. 443, 455 (2004) . Had EPA pursued
the “reasonable specificity” argument vigorously before the
D. C. Circuit, we would be obligated to address the merits of
the argument. See Gonzalez v. Thaler, 565 U. S. ___, ___
(2012) (slip op., at 10). But EPA did not press the argument
unequivocally. Before the D. C. Circuit, it indicated only
that the “reasonable specificity” prescription might bar judicial
review. Brief for Respondent EPA et al. in No. 11–1302 (CADC),
p. 30. See also id., at 32. We therefore do not count the
prescription an impassable hindrance to our adjudication of the
respondents’ attack on EPA’s interpretation of the Transport Rule.
We turn to that attack mindful of the importance of the issues
respondents raise to the ongoing implementation of the Good
Neighbor Provision.
B
We routinely accord
dispositive effect to an agency’s reasonable interpretation of
ambiguous statutory language. Chevron U. S. A. Inc. v.
Natural Resources Defense Council, Inc., 467 U. S. 837 (1984)
, is the pathmarking decision, and it bears a notable resemblance
to the cases before us. Chevron concerned EPA’s definition of the
term “source,” as used in the 1977 Amendments to the CAA. Id., at
840, n. 1. Those amendments placed additional restrictions on
companies’ liberty to add new pollution “sources” to their
factories. See id., at 840. Although “source” might have been
interpreted to refer to an individual smokestack, EPA construed the
term to refer to an entire plant, thereby “treat[ing] all of the
pollution-emitting devices within the [plant] as though they were
encased within a single ‘bubble.’ ” Ibid. Under the Agency’s
interpretation, a new pollution-emitting device would not subject a
plant to the additional restrictions if the “alteration [did] not
increase the total emissions [produced by] the plant.” Ibid.
This Court held EPA’s
interpretation of “source” a reasonable construction of an
ambiguous statutory term. When “Congress has not directly addressed
the precise [interpretative] question at issue,” we cautioned, a
reviewing court cannot “simply impose its own construction o[f] the
statute.” Id., at 843. Rather, the agency is charged with filling
the “gap left open” by the ambiguity. Id., at 866. Because
“ ‘a full understanding of the force of the statutory policy
. . . depend[s] upon more than ordinary knowledge’ ”
of the situation, the administering agency’s construction is to be
accorded “controlling weight unless . . . arbitrary,
capricious, or manifestly contrary to the statute.” Id., at 844
(quoting United States v. Shimer, 367 U. S. 374, 382 (1961) ).
Determining that none of those terms fit EPA’s interpretation of
“source,” the Court deferred to the Agency’s judgment.
We conclude that the
Good Neighbor Provision delegates authority to EPA at least as
certainly as the CAA provisions involved in Chevron. The statute
requires States to eliminate those “amounts” of pollution that
“contribute significantly to nonattainment” in downwind States. 42
U. S. C. §7410(a)(2)(D)(i) (emphasis added). Thus, EPA’s
task[
15] is to reduce upwind
pollution, but only in “amounts” that push a downwind State’s
pollution concentrations above the relevant NAAQS. As noted
earlier, however, the nonattainment of downwind States results from
the collective and interwoven contributions of multiple upwind
States. See supra, at 3. The statute therefore callsupon the Agency
to address a thorny causation problem: How should EPA allocate
among multiple contributing up-wind States responsibility for a
downwind State’s excess pollution?
A simplified example
illustrates the puzzle EPA faced. Suppose the Agency sets a NAAQS,
with respect to a particular pollutant, at 100 parts per billion
(ppb), and that the level of the pollutant in the atmosphere of
downwind State A is 130 ppb. Suppose further that EPA has
determined that each of three upwind States—X, Y, and Z—contributes
the equivalent of 30 ppb of the relevant pollutant to State A’s
airspace. The Good Neighbor Provision, as just observed, prohibits
only upwind emissions that contribute significantly to downwind
nonattainment. EPA’s authority under the provision is therefore
limited to eliminating a total of 30 ppb,[
16] i.e., the overage caused by the collective
contribution of States X, Y, and Z.[
17]
How is EPA to divide
responsibility among the three States? Should the Agency allocate
reductions proportionally (10 ppb each), on a per capita basis, on
the basis of the cost of abatement, or by some other metric? See
Brief for Federal Petitioners 50 (noting EPA’s consideration of
different approaches). The Good Neighbor Provision does not answer
that question for EPA. Cf. Chevron, 467 U. S., at 860 (“[T]he
language of [the CAA] simply does not compel any given
interpretation of the term ‘source.’ ”). Under Chevron, we
read Congress’ silence as a delegation of authority to EPA to
select from among reasonable options. See United States v. Mead
Corp., 533 U. S. 218, 229 (2001) .[
18]
Yet the Court of
Appeals believed that the Act speaks clearly, requiring EPA to
allocate responsibility for reducing emissions in “a manner
proportional to” each State’s “contributio[n]” to the problem. 696
F. 3d, at 21. Nothing in the text of the Good Neighbor
Provision propels EPA down this path. Understandably so, for as EPA
notes, the D. C. Circuit’s proportionality approach could
scarcely be satisfied in practice. See App. in No. 11–1302 etc.
(CADC), p. 2312 (“[W]hile it is possible to determine an
emission reduction percentage if there is a single downwind
[receptor], most upwind states contribute to multiple downwind
[receptors] (in multiple states) and would have a different
reduction percentage for each one.”).
To illustrate, consider
a variation on the example set out above. Imagine that States X and
Y now contribute air pollution to State A in a ratio of one to
five, i.e., State Y contributes five times the amount of pollution
to State A than does State X. If State A were the only downwind
State to which the two upwind States contributed, the D. C.
Circuit’s proportionality requirement would be easy to meet: EPA
could require State Y to reduce its emissions by five times the
amount demanded of State X.
The realities of
interstate air pollution, however, are not so simple. Most upwind
States contribute pollution to multiple downwind States in varying
amounts. See 76 Fed. Reg. 48239–48246. See also Brief for
Respondent Calpine Corp. et al. in Support of Petitioners
48–49 (offering examples). Suppose then that States X and Y also
contribute pollutants to a second downwind State (State B), this
time in a ratio of seven to one. Though State Y contributed a
relatively larger share of pollution to State A, with respect to
State B, State X is the greater offender. Following the
proportionality approach with respect to State B would demand that
State X reduce its emissions by seven times as much as State Y.
Recall, however, that State Y, as just hypothesized, had to effect
five times as large a reduction with respect to State A. The Court
of Appeals’ proportionality edict with respect to both State A and
State B appears to work neither mathematically nor in practical
application. Proportionality as to one down-wind State will not
achieve proportionality as to others. Quite the opposite. And
where, as is generally true, upwind States contribute pollution to
more than two downwind receptors, proportionality becomes all the
more elusive.
Neither the D. C.
Circuit nor respondents face up to this problem. The dissent, for
its part, strains to give meaning to the D. C. Circuit’s
proportionality constraint as applied to a world in which multiple
upwind States contribute emissions to multiple downwind locations.
In the dissent’s view, upwind States must eliminate emissions by
“whatever minimum amount reduces” their share of the overage in
each and every one of the downwind States to which they are linked.
See post, at 8. In practical terms, this means each upwind State
will be required to reduce emissions by the amount necessary to
eliminate that State’s largest downwind contribution. The dissent’s
formulation, however, does not account for the combined and
cumu-lative effect of each upwind State’s reductions on attainment
in multiple downwind locations. See ibid. (“Under a
proportional-reduction approach, State X would be required to
eliminate emissions of that pollutant by whatever minimum amount
reduces both State A’s level by 0.2 unit and State B’s by 0.7
unit.” (emphasis added)). The result would be costly overregulation
unnecessary to, indeedin conflict with, the Good Neighbor
Provision’s goal of attainment.[
19]
In response, the
dissent asserts that EPA will “simply be required to make allowance
for” the overregulation caused by its “proportional-reduction”
approach. Post, at 11. What criterion should EPA employ to
determine which States will have to make those “allowance[s]” and
by how much? The dissent admits there are “multiple ways” EPA might
answer those questions. Ibid. But proportionality cannot be one of
those ways, for theproportional-reduction approach is what led to
the overregulation in the first place. And if a nonproportional
approach can play a role in setting the final allocation of
reduction obligations, then it is hardly apparent why EPA, free to
depart from proportionality at the back end, cannot do so at the
outset.
Persuaded that the Good
Neighbor Provision does not dictate the particular allocation of
emissions among contributing States advanced by the D. C.
Circuit, we must next decide whether the allocation method chosen
by EPA is a “permissible construction of the statute.” Chevron, 467
U. S., at 843. As EPA interprets the statute, upwind emissions
rank as “amounts [that] . . . contribute significantly to
nonattainment” if they (1) constitute one percent or more of a
relevant NAAQS in a nonattaining downwind State and (2) can be
eliminated under the cost threshold set by the Agency. See 76 Fed.
Reg. 48254. In other words, to identify which emissions were to be
eliminated, EPA considered both the magnitude of upwind States’
contributions and the cost associated with eliminating them.
The Industry
respondents argue that, however EPA ultimately divides
responsibility among upwind States, the final calculation cannot
rely on costs. The Good Neighbor Provision, respondents and the
dissent emphasize, “requires each State to prohibit only those
‘amounts’ of air pollution emitted within the State that
‘contribute significantly’ to another State’s nonattaintment.”
Brief for Industry Respondents 23 (emphasis added). See also post,
at 6. The cost of preventing emissions, they urge, iswholly
unrelated to the actual “amoun[t]” of air pollution an upwind State
contributes. Brief for Industry Respondents 23. Because the
Transport Rule considers costs, respondents argue, “States that
contribute identical ‘amounts’ . . . may be deemed [by
EPA] to have [made] substantially different” contributions. Id., at
30.
But, as just explained,
see supra, at 21–22, the Agency cannot avoid the task of choosing
which among equal “amounts” to eliminate. The Agency has chosen,
sensibly in our view, to reduce the amount easier, i.e., less
costly, to eradicate, and nothing in the text of the Good Neighbor
Provision precludes that choice.
Using costs in the
Transport Rule calculus, we agree with EPA, also makes good sense.
Eliminating those amounts that can cost-effectively be reduced is
an efficient and equitable solution to the allocation problem the
Good Neighbor Provision requires the Agency to address. Efficient
because EPA can achieve the levels of attainment, i.e., of emission
reductions, the proportional approach aims to achieve, but at a
much lower overall cost. Equita-ble because, by imposing uniform
cost thresholds on regulated States, EPA’s rule subjects to
stricter regulation those States that have done relatively less in
the past to control their pollution. Upwind States that have not
yet implemented pollution controls of the same stringency as their
neighbors will be stopped from free riding on their neighbors’
efforts to reduce pollution. They will have to bring down their
emissions by installing devices of the kind in which neighboring
States have already invested.
Suppose, for example,
that the industries of upwind State A have expended considerable
resources installing modern pollution-control devices on their
plants. Factories in upwind State B, by contrast, continue to run
old, dirty plants. Yet, perhaps because State A is more populous
and therefore generates a larger sum of pollution overall, the two
States’ emissions have equal effects on downwind attainment. If
State A and State B are required to eliminate emissions
proportionally (i.e., equally), sources in State A will be
compelled to spend far more per ton of reductions because they have
already utilized lower cost pollution controls. State A’s sources
will also have to achieve greater reductions than would have been
required had they not made the cost-effective reductions in the
first place. State A, in other words, will be tolled for having
done more to reduce pollution in the past.[
20] EPA’s cost-based allocation avoids these
anomalies.
Obligated to require
the elimination of only those “amounts” of pollutants that
contribute to the nonattainment of NAAQS in downwind States, EPA
must decide how to differentiate among the otherwise like
contributions of multiple upwind States. EPA found decisive the
difficulty of eliminating each “amount,” i.e., the cost incurred in
doing so. Lacking a dispositive statutory instruction to guide it,
EPA’s decision, we conclude, is a “reasonable” way of filling the
“gap left open by Congress.” Chevron, 467 U. S., at
866.[
21]
C
The D. C.
Circuit stated two further objections to EPA’s cost-based method of
defining an upwind State’s contribution. Once a State was screened
in at step one of EPA’s analysis, its emission budget was
calculated solely with reference to the uniform cost thresholds the
Agency selected at step two. The Transport Rule thus left open
thepossibility that a State might be compelled to reduce emissions
beyond the point at which every affected downwind State is in
attainment, a phenomenon the Court of Appeals termed
“over-control.” 696 F. 3d, at 22; see supra, at 12. Second,
EPA’s focus on costs did not foreclose, as the D. C. Circuit
accurately observed, the possibility that an upwind State would be
required to reduce its emissions by so much that the State no
longer contributed one per-cent or more of a relevant NAAQS to any
downwind State. This would place the State below the mark EPA had
set, during the screening phase, as the initial threshold of
“significan[ce].” See id., at 20, and n. 13.
We agree with the Court
of Appeals to this extent: EPA cannot require a State to reduce its
output of pollution by more than is necessary to achieve attainment
in every downwind State or at odds with the one-percent threshold
the Agency has set. If EPA requires an upwind State to reduce
emissions by more than the amount necessary to achieve attainment
in every downwind State to which it is linked, the Agency will have
overstepped its authority, under the Good Neighbor Provision, to
eliminate those “amounts [that] contribute . . . to
nonattainment.” Nor can EPA demand reductions that would drive an
upwind State’s contribution to every downwind State to which it is
linked below one percent of the relevant NAAQS. Doing so would be
counter to step one of the Agency’s interpretation of the Good
Neighbor Provision. See 76 Fed. Reg. 48236 (“[S]tates whose
contributions are below th[e] thresholds do not significantly
contribute to nonattainment . . . of the relevant
NAAQS.”).
Neither possibility,
however, justifies wholesale invalidation of the Transport Rule.
First, instances of “over-control” in particular downwind
locations, the D. C. Circuit acknowledged, see 696 F. 3d,
at 22, may be incidental to reductions necessary to ensure
attainment elsewhere. Because individual upwind States often
“contribute significantly” to nonattainment in multiple downwind
locations, the emissions reduction required to bring one linked
downwind State into attainment may well be large enough to push
other linked downwind States over the attainment line.[
22] As the Good Neighbor Provision
seeks attainment in every downwind State, however, exceeding
attainment in one State cannot rank as “over-control” unless
unnecessary to achieving attainment in any downwind State. Only
reductions unnecessary to downwind attainment anywhere fall outside
the Agency’s statutory authority.[
23]
Second, while EPA has a
statutory duty to avoid over-control, the Agency also has a
statutory obligation to avoid “under-control,” i.e., to maximize
achievement of attainment downwind. For reasons earlier explained,
see supra, at 3–4, a degree of imprecision is inevitable in
tackling the problem of interstate air pollution. Slight changes in
wind patterns or energy consumption, for example, may vary downwind
air quality in ways EPA might not have anticipated. The Good
Neighbor Provision requires EPA to seek downwind attainment of
NAAQS notwithstanding the uncertainties. Hence, some amount of
over-control, i.e., emission budgets that turn out to be more
demanding than necessary, would not be surprising. Required to
balance the possibilities of under-control and over-control, EPA
must have leeway in fulfilling its statutory mandate.
Finally, in a
voluminous record, involving thousands of upwind-to-downwind
linkages, respondents point to only a few instances of
“unnecessary” emission reductions, and even those are contested by
EPA. Compare Brief for Industry Respondents 19 with Reply Brief for
Federal Petitioners 21–22. EPA, for its part, offers data,
contested by respondents, purporting to show that few (if any)
upwind States have been required to limit emissions below the
one-percent threshold of significance. Compare Brief for Federal
Petitioners 37, 54–55, with Brief for Industry Respondents 40.
If any upwind State
concludes it has been forced to regulate emissions below the
one-percent threshold or beyond the point necessary to bring all
downwind States into attainment, that State may bring a
particularized, as-applied challenge to the Transport Rule, along
with any other as-applied challenges it may have. Cf. Babbitt v.
Sweet Home Chapter, Communities for Great Ore., 515 U. S. 687
–700 (1995) (approving agency’s reasonable interpretation of
statute despite possibility of improper applications); American
Hospital Assn. v. NLRB, 499 U. S. 606, 619 (1991) (rejecting
facial challenge to National Labor Relations Board rule despite
possible arbitrary applications). Satisfied that EPA’s cost-based
methodol-ogy, on its face, is not “arbitrary, capricious, or
manifestly contrary to the statute,” Chevron, 467 U. S., at
844, we uphold the Transport Rule. The possibility that the rule,
in uncommon particular applications, might exceed EPA’s statutory
authority does not warrant judicial condemnation of the rule in its
entirety.
In sum, we hold that
the CAA does not command that States be given a second opportunity
to file a SIP after EPA has quantified the State’s interstate
pollution obligations. We further conclude that the Good Neighbor
Provision does not require EPA to disregard costs and consider
exclusively each upwind State’s physically proportionate
responsibility for each downwind air quality problem. EPA’s
cost-effective allocation of emission reductions among upwind
States, we hold, is a permissible, work-able, and equitable
interpretation of the Good Neighbor Provision.
* * *
For the reasons
stated, the judgment of the United States Court of Appeals for the
D. C. Circuit is reversed, and the cases are remanded for
further proceedings consistent with this opinion.
It is so ordered.
Justice Alito took no
part in the consideration or decision of these cases.