Rain Threatens Forests In More Ways Than Previously Thought
On Pollution Credit Swaps Voided
deals a blow to state's efforts to reduce acid rain in Adirondacks
Dina Cappiello, April 10, 2002
law that penalized New York power plants for trading pollution
credits to 14 other states was voided by a federal judge
on Tuesday, removing a key part of the state's strategy
to reduce acid rain in the Adirondacks.
District Court Judge David N. Hurd in Utica ruled that the
2000 Air Pollution Mitigation Law was unconstitutional and
conflicted with the federal Clean Air Act by restructuring
the nationwide trading system whereby tons of sulfur dioxide
emissions, or credits, are swapped freely between
York's law placed a 100 percent penalty on utilities that
traded credits of the acid rain-forming gas to Midwestern
and Southern states, which are responsible for roughly 70
percent of the pollution that falls as acid rain over New
decision, Hurd sided with the Clean Air Markets Group, a
consortium of electricity generators and emissions traders,
including NRG Energy Inc., a company that owns five power
plants in the state. The parties claimed that the restrictions
on trading by New York utilities decreased the market value
of credits from the state.
group filed the suit against the state in November 2000,
six months after Gov. George Pataki signed the law. The
judge's ruling makes the law null and void and bars the
state from enforcing it.
clears the way for in-state power plants to sell their pollution
credits to any power plant who cares to buy them,'' said
Marc Violette, a spokesman for Attorney General Eliot Spitzer,
who represented the governor in the litigation. "There
is a multi-pronged effort that we are engaged
in to stop the flow of out-of-state pollution into New York
state. This law was one of the prongs.''
the Adirondacks, a region where federal reductions in air
pollution have yet to result in improvements in lakes and
soils, the decision is an unwelcome blow, especially with
the Bush administration considering unraveling another part
of the state's acid rain arsenal, the lawsuits New York
has waged against Midwestern plants that have upgraded their
facilities without coming into compliance with the Clean
decision could also limit the effectiveness of a 50 percent
reduction in sulfur dioxide required by in-state power plants
announced by the governor in February because the cuts were
based in part on the partial ban on trading pollution credits.
spokeswoman said that the administration would be reviewing
its legal options.
we are very disappointed with the decision. It has been
part of the governor's acid rain strategy,'' said spokeswoman
emissions-credit system was designed to offer utilities
flexibility in complying with federal air pollution regulations.
It sets a cap on the number of tons of sulfur dioxide that
can be released into the environment by the nation's power
plants but allows the utilities to trade the credits among
that emits less than it is allotted can hold onto or sell
unused pollution credits to other plants. Plants buying
credits can then use them to exceed the limits on pollution
set by the government.
York has been one of the biggest exporters of sulfur dioxide
credits, something that state legislators predicted when
they pressured Congress in the early 1990s to make trading
regulations more regional.
General Accounting Office report that analyzed the emissions
trading system nationwide between 1993 and 1998 found that
New York utilities traded more than 200,000 of the 866,000
tons of sulfur dioxide they were allotted under the federal
acid rain program.
nearly 10 percent of what was traded -- or 70,000 tons --
was sold to upwind states whose power plant emissions generate
acid rain over New York.
Air Pollution Mitigation Law was seen as a way to renew
pressure on the federal government. The law attempted to
steer the sale of credits from New York utilities away from
New Jersey, Pennsylvania, Maryland, Delaware, Virginia,
North Carolina, Tennessee, West Virginia, Ohio, Michigan,
Illinois, Kentucky, Indiana and Wisconsin.
root of our enthusiasm for the law was to send a message
to Washington that the 1990 Clean Air Act amendments, while
a good start, were insufficient to stop acid rain,'' said
John Sheehan, a spokesman for the Adirondack Council. "New
York was essentially prepared to interfere with the program
if the federal government wasn't going to protect us.''
companies that brought the suit argued that the solution
to New York's acid rain problem should be left up to Congress.
Hurd went further in his decision, by challenging the law's
effectiveness at the intent of rerouting the pollution.
out that out-of-state plants polluted less in 2000 than
they were allotted and that the law does not prohibit trading
between New York utilities, which are responsible for between
13 and 38 percent of the pollution generating acid rain
within the state.
Hurd stated that most of the credits -- equal to a ton of
sulfur dioxide, and sold for roughly $150 each -- imported
by upwind states are from states other than New York.
don't think the judge left much room for the state to enforce
the law,'' said Norman Fichthorn, the attorney for the Clean
Air Markets Group. "As a result of this decision, the
law has no legal effect anymore.''
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