Court Opinion

ID: 4655865
Source: CourtListenerOpinion
Date Created: 2021-01-29 16:00:29.419117+00
Date Added: 2024-06-11T08:00:31.541296
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 22, 2020           Decided January 29, 2021

                        No. 15-1465

                    SIERRA CLUB, ET AL.,
                        PETITIONERS

                              v.

    ENVIRONMENTAL PROTECTION AGENCY AND ANDREW
     WHEELER, ADMINISTRATOR, U.S. ENVIRONMENTAL
                PROTECTION AGENCY,
                    RESPONDENTS

        STATE OF TEXAS AND TEXAS COMMISSION ON
               ENVIRONMENTAL QUALITY,
                     INTERVENORS

                 Consolidated with 19-1024

     On Petitions for Review of Administrative Action
   of the United States Environmental Protection Agency

     Seth L. Johnson argued the cause and filed the briefs for
petitioners.

   David O’Brien Frederick and Amy Catherine Dinn were
on the brief for amicus curiae Caring for Pasadena
Communities in support of petitioners.
                             2

    Perry M. Rosen, Senior Attorney, United States
Department of Justice, argued the cause for the respondents.
With him on the brief were Jeffrey Bossert Clark, Assistant
Attorney General, and Jonathan D. Brightbill, Principal
Deputy Assistant Attorney General.

    Ken Paxton, Attorney General, Office of the Attorney
General for the State of Texas, Jeffrey C. Mateer, First
Assistant Attorney General, Priscilla M. Hubenak, Chief,
Environmental Protection Division, and Linda B. Secord,
Assistant Attorney General, were on the brief for intervenor-
respondents the State of Texas and the Texas Commission on
Environmental Quality.

   Bayron T. Gilchrist, Barbara Baird, and Megan E. Lorenz
Angarita were on the brief for amicus curiae South Coast Air
Quality Management District in support of respondents.

     Aaron M. Flynn, Lucinda Minton Langworthy, Daryl L.
Joseffer, Michael B. Schon, and Peter Tolsdorf were on the
brief for amicus curiae American Chemistry Council, et al. in
support of respondents.

   Before: TATEL and KATSAS, Circuit Judges, and
EDWARDS, Senior Circuit Judge.

    Opinion for the Court filed by Circuit Judge TATEL.

     TATEL, Circuit Judge: In these consolidated cases, we
consider challenges to four provisions of the Environmental
Protection Agency’s 2015 and 2018 rules implementing the
National Ambient Air Quality Standards for ozone. For the
reasons set forth below, we vacate two provisions—the
interprecursor trading program and the interpretation of the
                                3
Clean Air Act’s contingency measures requirements—because
they contravene the statute’s unambiguous language. We
vacate another provision—the implementation of the milestone
compliance demonstration requirement—because it rests on an
unreasonable interpretation of the statute. Lastly, we deny the
petition for review with respect to the alternative baseline years
provision.

                                I.
    Under the Clean Air Act, the Environmental Protection
Agency (EPA) must publish a list of air pollutants that “may
reasonably be anticipated to endanger public health or
welfare.” 42 U.S.C. § 7408(a)(1)(A). For each air pollutant,
EPA must set primary and secondary National Ambient Air
Quality Standards (NAAQS), specifying the levels of air
quality “based on such criteria and allowing an adequate
margin of safety” that are “requisite to protect the public
health” for primary NAAQS, id. § 7409(b)(1), and specifying
levels that are “requisite to protect the public welfare” for
secondary NAAQS, id. § 7409(b)(2).

     “Once EPA establishes NAAQS for a particular
pollutant,” those NAAQS become “the centerpiece of a
complex statutory regime aimed at reducing the pollutant’s
atmospheric concentration.” Natural Resources Defense
Council v. EPA (NRDC I), 777 F.3d 456, 458 (D.C. Cir. 2014)
(internal quotation marks omitted). After setting NAAQS, EPA
establishes air quality control regions, 42 U.S.C. § 7407, and
areas within those regions are designated as “nonattainment”
when they do not meet the NAAQS for a specific pollutant,
“attainment” when they do meet them, or “unclassifiable”
when it cannot be determined “on the basis of available
information” whether they meet the NAAQS, id.
§ 7407(d)(1)(A). States have “the primary responsibility for
assuring air quality,” id. § 7407(a), and they must submit state
                              4
implementation plans (SIPs) that “provide[] for
implementation, maintenance, and enforcement of” the
NAAQS. Id. § 7410(a)(1).

     This case concerns the implementation of the NAAQS for
ozone, “an essential presence in the atmosphere’s stratospheric
layer” that is “dangerous at ground level.” South Coast Air
Quality Management District v. EPA (South Coast I), 472 F.3d
882, 887 (D.C. Cir. 2006). Not directly emitted through human
activity, ozone “forms when other atmospheric pollutants—
ozone ‘precursors’—react in the presence of sunlight.”
American Trucking Associations, Inc. v. EPA, 283 F.3d 355,
359 (D.C. Cir. 2002). These precursors include volatile organic
compounds (VOCs) and oxides of nitrogen (NOX). South Coast
I, 472 F.3d at 887.

     In 1990, Congress amended the Clean Air Act, finding that
the statute had failed to produce the anticipated reductions of
ozone and certain other pollutants. Accordingly, it “abandoned
the discretion-filled approach of two decades prior in favor of
more comprehensive regulation of six pollutants,” including
ozone, “that Congress found to be particularly injurious to
public health.” South Coast I, 472 F.3d at 887. Congress first
redesignated the existing approach as Subpart 1, and that
approach “continued to apply as a default matter to pollutants
not specifically addressed in the amended portions of the Act.”
NRDC I, 777 F.3d at 460. Congress then added Subpart 2,
which focuses on ozone and its precursors. See 42 U.S.C.
§§ 7511–7511f. Subpart 2 directs that each ozone
nonattainment area shall be classified as “marginal,”
“moderate,” “serious,” “severe,” or “extreme” based on how
much the ozone level in that area exceeds the NAAQS. Id.
§§ 7511(a)–(b). Nonattainment areas must achieve the primary
NAAQS “as expeditiously as practicable,” id. § 7511(a)(1),
although “[a]n area that exceeds the NAAQS by a greater
                               5
margin is given more time to meet the standard but is subjected
to progressively more stringent emissions controls for ozone
precursors,” chiefly, VOCs and NO X. South Coast Air Quality
Management District v. EPA (South Coast II), 882 F.3d 1138,
1143 (D.C. Cir. 2018) (internal quotation marks omitted).

     Setting the stage for this case, EPA promulgated a new
NAAQS for ozone in 2008. National Ambient Air Quality
Standards for Ozone, 73 Fed. Reg. 16,436 (Mar. 27, 2008).
Seven years later, in 2015, it promulgated a rule implementing
the 2008 NAAQS. Implementation of the 2008 National
Ambient Air Quality Standards for Ozone: State
Implementation Plan Requirements (2015 Implementation
Rule), 80 Fed. Reg. 12,264 (Mar. 6, 2015). Several petitioners
in this case challenged various provisions of that 2015
Implementation Rule, and our court resolved all but one of
those challenges in South Coast Air Quality Management
District v. EPA, or South Coast II, 882 F.3d 1138. That
remaining challenge related to a provision called the
“interprecursor trading program.” While South Coast II was
pending, EPA granted an administrative petition to reconsider
that program, so the South Coast II panel severed the challenge,
leaving it unresolved. Order, South Coast Air Quality
Management District v. EPA, No. 15-1115 (D.C. Cir. Dec. 18,
2015).

     Three years later, EPA included the interprecursor trading
program in a rule implementing new ozone NAAQS that it had
issued in 2015. See National Ambient Air Quality Standards
for Ozone, 80 Fed. Reg. 65,292 (Oct. 26, 2015);
Implementation of the 2015 National Ambient Air Quality
Standards for Ozone: Nonattainment Area State
Implementation Plan Requirements (2018 Implementation
Rule), 83 Fed. Reg. 62,998 (Dec. 6, 2018). That 2018
Implementation Rule is the focus of this case.
                               6
     Petitioners Sierra Club, Conservation Law Foundation,
Downwinders at Risk, Physicians for Social Responsibility –
Los Angeles, and National Parks Conservation Association
challenge four features of the 2018 Rule: (1) the interprecursor
trading program, as well as provisions (2) allowing states to
demonstrate compliance with the Act’s reasonable further
progress milestone requirements through an implementation-
based method, (3) allowing states to choose between two
options for the reasonable further progress baseline year, and
(4) allowing nonattainment areas to use already-implemented
measures to satisfy the Act’s contingency measures
requirements. Petitioners argue that these four provisions are
“arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law.” 42 U.S.C. § 7607(d)(9)(A). We have
jurisdiction to consider their challenges under 42 U.S.C.
§ 7607(b)(1), “which gives this court exclusive jurisdiction
over challenges to final EPA actions.” Natural Resources
Defense Council v. EPA, 643 F.3d 311, 317 (D.C. Cir. 2011).

                              II.
     Because Petitioners challenge all four provisions on the
ground that they violate the Clean Air Act, we apply the
familiar two-step framework of Chevron, U.S.A., Inc. v.
Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).
See NRDC I, 777 F.3d at 463 (“review[ing] EPA’s
interpretation of the Clean Air Act pursuant to the two-step
Chevron framework”). We first ask whether Congress has
“directly spoken to the precise question at issue.” Chevron,
467 U.S. at 842. But if “the statute is silent or ambiguous with
respect to the specific issue,” we defer to EPA’s interpretation
of the Act as long as it is “based on a permissible construction
of the statute.” Id. at 843.
                                7
                               A.
     We start with Petitioners’ challenge to the interprecursor
trading program for permitting offsets. Under the Act’s
Nonattainment New Source Review program, SIPs must
require permits for the modification or construction of major
stationary sources “to assure” that the relevant NAAQS “are
achieved.” 42 U.S.C. § 7410(a)(2)(C); see South Coast II,
882 F.3d at 1144. The goal is “to ensure that new or modified
sources will not exacerbate the pollution problem in the
nonattainment area.” South Coast II, 882 F.3d at 1144. EPA
may issue permits for a source if the agency determines that
sufficient offsets, or emissions reductions, have been obtained
from other sources in the area, “such that total allowable
emissions from existing sources in the region, from new or
modified sources which are not major emitting facilities, and
from the proposed source will be sufficiently less than total
emissions from existing sources” by the time construction or
modification begins. 42 U.S.C. § 7503(a)(1)(A). Generally,
sources can comply with offset requirements “for increased
emissions of any air pollutant only by obtaining emission
reductions of such air pollutant from the same source or other
sources in the same nonattainment area.” Id. § 7503(c)(1).
These emissions reductions “shall assure that the total tonnage
of increased emissions of the air pollutant from the new or
modified source shall be offset by an equal or greater
reduction . . . in the actual emissions of such air pollutant from
the same or other sources in the area.” Id.

     Subpart 2 extends the permit requirements to ozone and its
precursors. See id. § 7511a(a)(2)(C) (requiring permit program
in SIPs for marginal areas); id. § 7511a(b) (moderate areas); id.
§ 7511a(c) (serious areas); id. § 7511a(d) (severe areas); id.
§ 7511a(e) (extreme areas). As for VOC offsets, Subpart 2
provides that “[f]or purposes of satisfying the emission offset
requirements of this part, the ratio of total emission reductions
                                8
of volatile organic compounds to total increased emissions of
such air pollutant shall be at least” various default ratios,
depending on the level of nonattainment: 1.1 to 1 for marginal
areas, id. § 7511a(a)(4), 1.15 to 1 for moderate areas, id.
§ 7511a(b)(5), 1.2 to 1 for serious areas, id. § 7511a(c)(10), 1.3
to 1 for severe areas, id. § 7511a(d)(2) (subject to exception),
and 1.5 to 1 for extreme areas, id. § 7511a(e)(1) (subject to
exception). Subpart 2 extends these provisions to NOX,
although it excludes certain circumstances, such as when EPA
determines that, for specific sources, “net air quality benefits
are greater in the absence of reductions of oxides of nitrogen
from the sources concerned.” Id. § 7511a(f)(1).

     The 2018 Implementation Rule interprets these provisions
to allow interprecursor trading programs for offsets. Under
these programs, which states may choose to establish, when
ozone-related offsets are required for permits under the Act’s
Nonattainment New Source Review program, the offset
requirement can be satisfied by “trading” reductions in
emissions of ozone precursors, i.e., VOCs and NOX. 2018
Implementation Rule, 83 Fed. Reg. at 63,016–21. Put
differently, the 2018 Rule interprets the statute as requiring
offsets of ozone for these permits, and accordingly allows
offsets—emissions reductions—of one ozone precursor (VOCs
or NOX) to stand in for the other (NOX or VOCs, respectively)
in most circumstances. Id. Because reductions in one
precursor’s emissions are not always equivalent, in terms of
their impact on ozone levels, to reductions in the other
precursor’s emissions, the 2018 Implementation Rule requires
that, to mediate between the two precursors, states would have
to use (1) default ratios, (2) case-specific ratios, or (3) a
combination of the two. Id. at 63,017. States may implement
interprecursor trading ratios without EPA approval, but those
ratios not in SIPs would be subject to public comment when
used in individual permits. Id. at 63,017–18. These ratios, the
                                9
2018 Rule explains, must “provide an equivalent or greater
ozone air quality benefit in the applicable ozone nonattainment
area” than would exist absent interprecursor trading. Id. at
63,017.

     An example in the 2018 Implementation Rule helps to
clarify what this arrangement might look like in practice. See
id. at 63,016 n.39. Suppose that a major source subject to
Nonattainment New Source Review in a moderate area seeks
to offset an increase in NOX emissions of 200 tons per year with
reductions in VOC emissions. Id. Under the 2018 Rule, that
200 tons per year increase is first subject to the moderate area
offset ratio of 1.15 to 1 set by the Act, see 42 U.S.C.
§ 7511a(b)(5), and the result of that calculation is then subject
to the relevant interprecursor trading ratio, which the Rule
assumes is 5 here. 2018 Implementation Rule, 83 Fed. Reg. at
63,016 n.39. At the first step, 200 tons per year is multiplied by
1.15, yielding 230 tons per year. At the second step, those 230
tons per year are multiplied by 5, yielding 1,150 tons per year.
So the increase in NOX emissions of 200 tons per year could be
offset by a reduction in VOC emissions of 1,150 tons per year.

     Petitioners urge us to vacate the interprecursor trading
program, arguing that (1) the Clean Air Act unambiguously
prohibits interprecursor trading, (2) EPA has provided no
rational basis for authorizing the program, and (3)
interprecursor trading violates the Act’s anti-backsliding
provision. Petitioners also contend that the program
impermissibly allows required emissions reductions for one
precursor to be offset with “banked allowances” of emissions
reductions of the other precursor. Because we agree with
Petitioners that the interprecursor trading program violates the
statute’s plain text, we have no need to address their other
arguments.
                               10
     Recall that Subpart 2’s offset provisions related to ozone
and its precursors specify that “the ratio of total emission
reductions of volatile organic compounds to total increased
emissions of such air pollutant shall be” the various ratios
previously laid out. 42 U.S.C. §§ 7511a(a)(4), (b)(5), (c)(10),
(d)(2), (e)(1) (emphasis added). The statute generally extends
these offset ratios to NOX. See 42 U.S.C. § 7511a(f)(1).

     As Petitioners argue, the phrase “such air pollutant” in
these subsections unambiguously refers back to VOCs. In
general, “the adjective ‘such’ means ‘of the kind or degree
already described or implied.’” Culbertson v. Berryhill, 139 S.
Ct. 517, 522 (2019) (quoting H. Fowler & F. Fowler, Concise
Oxford Dictionary of Current English 1289 (5th ed. 1964)).
The closest potential “air pollutant” preceding the “such air
pollutant” language is “volatile organic compounds,” which
appears in the very same sentence just five words earlier. See
42 U.S.C. §§ 7511a(a)(4), (b)(5), (c)(10), (d)(2), (e)(1). By
contrast, the word “ozone,” which EPA interprets “such air
pollutant” to mean, last appears five subsections above the first
precursor offset provision and 334 words before the phrase
“such air pollutant.” See id. § 7511a(1)(C). The phrase “such
air pollutant” thus “quite obviously refers back to” volatile
organic compounds, and the same reasoning applies to NOX
under the provision extending these offset requirements to
NOX. Clean Air Council v. Pruitt, 862 F.3d 1, 9 (D.C. Cir.
2017) (per curiam). In this context, then, the statute treats
VOCs and NOX as the relevant air pollutants. Had Congress
intended to allow interprecursor trading for offsets, it would
have used the phrase “ozone precursors” instead of “such air
pollutant,” as it does elsewhere in the contemporaneously
enacted provisions of Subpart 2. See, e.g., 42 U.S.C.
§§ 7511d(e), 7511f. The plain language of the statute thus
requires that increased VOC emissions be offset with
                               11
reductions in VOC emissions, and the same is true for NOX
emissions under most circumstances.

     Seeking to avoid the definitional and grammatical
consequences of “such,” EPA focuses on the statute’s general
offset provision in Subpart 1, 42 U.S.C. § 7503(c)(1), and its
definition of air pollutant, which “includes any precursors to
the formation of any air pollutant, to the extent [EPA] has
identified such precursor or precursors for the particular
purpose for which the term ‘air pollutant’ is used,” id.
§ 7602(g). These provisions, EPA argues, give it broad
discretion to define “air pollutant” for the purpose of offsets,
and it has determined that it is ozone, not VOCs and NOX, that
is the “air pollutant” here. Consequently, “a source may satisfy
any offset requirement . . . by obtaining commensurate
reductions of the ‘air pollutant’ associated with the newly
constructed or modified source, in this case ozone.” EPA Br.
16.

     In addition to ignoring the word “such,” EPA’s argument
runs afoul of the “‘basic principle of statutory construction that
a specific statute . . . controls over a general provision . . .
particularly when the two are interrelated and closely
positioned.’” Adirondack Medical Center v. Sebelius, 740 F.3d
692, 698 (D.C. Cir. 2014) (alterations in original) (quoting
HCSC–Laundry v. United States, 450 U.S. 1, 6 (1981)). It is
true that section 7602(g) gives EPA general authority to define
“air pollutant,” but section 7511a(a)(4) and its counterparts
expressly recognize that VOCs and NOX are precursors for the
purpose of offsets, precluding EPA from determining
otherwise. It is especially clear that whatever discretion section
7602(g) affords EPA cannot trump the precursor-specific
provisions given that, as the Supreme Court has made clear,
“[t]he principal distinction between Subpart 1 and Subpart 2 is
that the latter eliminates regulatory discretion that the former
                               12
allowed.” Whitman v. American Trucking Associations, Inc.,
531 U.S. 457, 484 (2001).

     Moreover, EPA’s interpretation of “such air pollutant” as
referring to ozone conflicts with the plain text of the general
offset provision and the ozone-specific offset provisions.
Those provisions all relate to “emissions” of “such air
pollutant,” see id. §§ 7503(c)(1), 7511a(a)(4), but, as EPA
recognizes, “ozone is not emitted directly into air,”
Maryland v. EPA, 958 F.3d 1185, 1190 (D.C. Cir. 2020); see
National Ambient Air Quality Standards for Ozone, 80 Fed.
Reg. at 65,299 (“Ozone is formed near the earth’s surface due
to chemical interactions involving solar radiation and precursor
pollutants including volatile organic compounds (VOCs) and
NOx.”). Given that there are no emissions of ozone in the same
way that there are emissions of VOCs or NOx, it makes no
sense to read those provisions as referring to ozone. EPA’s
interpretation also conflicts with the general offset provision’s
tonnage requirements. Although that provision requires that the
tonnage to be reduced be “greater or equal” to the increased
tonnage of an air pollutant, see 42 U.S.C. § 7503(c)(1), if
emissions reductions of VOCs and NOx were traded, the
increased tonnage of emissions of one air pollutant—either
VOCs or NOX—could be less than the tonnage of the reduced
emissions of the same pollutant.

     EPA attempts to distinguish section 7511a(a)(4) and its
counterparts from other provisions of Subpart 2 that
specifically refer to one or both precursors instead of using the
phrase “such air pollutant.” According to EPA, Congress’s use
of the phrase “such air pollutant” in section 7511a(a)(4) when
it could have specified VOC emissions reductions
demonstrates an intent to allow the agency to define what “such
air pollutant” is. This argument overlooks the word “such” and
ignores the differing contexts of section 7511a(a)(4) and the
                               13
provision that EPA relies on, section 7511a(b)(1)(A)(i). The
latter addresses “volatile organic compound emission
reductions” before addressing both “reductions in emissions of
volatile organic compounds and oxides of nitrogen.” 42 U.S.C.
§ 7511a(b)(1)(A)(i). In that context, when both precursors are
discussed together in the same section, use of the phrase “such
air pollutant” at any point would only confuse the reader. It
would, in other words, be unclear which precursor “such”
referred to. But section 7511a(a)(4) and its counterparts risk no
such confusion since the only possible air pollutant referenced
in the same section is VOCs. See 42 U.S.C. §§ 7511(a)(4),
(b)(5), (c)(10), (d)(2), (e)(1). Section 7511a(b)(1)(A)(i)’s
language thus yields no insight as to the meaning of section
7511a(a)(4) and its parallel provisions.

     Next, EPA relies on section 7511a(c)(2)(C), which it
claims allows interprecursor trading in the context of the
second progress requirement. See 42 U.S.C. § 7511a(c)(2)(C).
That section provides that, for the relevant reasonable further
progress demonstration, a SIP may contain “a demonstration to
the satisfaction of [EPA] that the applicable implementation
plan . . . provides for reductions of emissions of VOC[s] and
oxides of nitrogen . . . that would result in a reduction in ozone
concentrations at least equivalent to that which would result
from the amount of VOC emission reductions required.” Id.
According to EPA, this section indicates that Congress
intended to permit interprecursor trading more broadly. The
provision, however, proves just the opposite. “[W]e ‘generally
presum[e] that Congress acts intentionally and purposely when
it includes particular language in one section of a statute but
omits it in another.’” Intel Corp. Investment Policy
Committee v. Sulyma, 140 S. Ct. 768, 777 (2020) (second
alteration in original) (quoting BFP v. Resolution Trust Corp.,
511 U.S. 531 (1994)). That Congress permitted limited
interprecursor trading in the context of the second reasonable
                                14
further progress requirement in Subpart 2, but not in the general
or precursor-specific offset provisions, demonstrates that it did
not intend to allow such trading outside this narrow context.
See South Coast I, 472 F.3d at 894 (finding that the lack of
certain provisions in Subpart 2, when they had been included
in Subpart 1, demonstrated that Congress did not intend them
to apply to Subpart 2).

      EPA’s remaining argument, that its interpretation better
aligns with section 7511a(f)(1)’s exception for when the
precursor-specific offset provisions extend to NOX, is “post
hoc,” as it appears nowhere in the 2018 Rule. NRDC I,
755 F.3d at 1020. Accordingly, we cannot sustain the
interprecursor trading program on that basis. See Motor Vehicle
Manufacturers Ass’n of the United States, Inc. v. State Farm
Mutual Automobile Insurance Co., 463 U.S. 29, 50 (1983) (“It
is well-established that an agency’s action must be upheld, if at
all, on the basis articulated by the agency itself.”). In any event,
EPA’s argument conflicts with the plain meaning of the
directly controlling provisions, as we have explained above.

                                B.
     Petitioners next challenge EPA’s interpretation of the
statutory provisions governing how states are to demonstrate
that they have achieved reasonable further progress milestones.
Specifically, SIPs for nonattainment areas must “require
reasonable further progress,” 42 U.S.C. § 7502(c)(2), defined
as “such annual incremental reductions in emissions of the
relevant air pollutant as are required by this part or may
reasonably be required by [EPA] for the purpose of ensuring
attainment of the applicable national ambient air quality
standard by the applicable date,” id. § 7501(1). And under
Subpart 2, SIPs for ozone nonattainment areas classified as
moderate or above must provide for reductions of VOC
emissions by “at least 15 percent from baseline emissions.” Id.
                               15
§ 7511a(b)(1)(A). “Baseline emissions” are defined as “the
total amount of actual VOC or NOX emissions from all
anthropogenic sources in the area during the” baseline year,
originally 1990, excluding certain emissions not at issue here.
Id. § 7511a(b)(1)(B). For serious and above ozone
nonattainment areas, reductions in VOC emissions must
average at least three percent per year over each consecutive
three-year period until attainment. Id. § 7511a(c)(2)(B). States
are further required to submit “a comprehensive, accurate,
current inventory of actual emissions from all sources” every
three years. Id. §§ 7511a(a)(1), (3).

     Beginning six years after the baseline year, and every three
years thereafter, states must determine whether each serious or
above ozone nonattainment area “has achieved a reduction in
emissions during the preceding intervals equivalent to the total
emission reductions required to be achieved by the end of such
interval” by the reasonable further progress provisions. Id.
§ 7511a(g)(1). This reduction in emissions is called a
“milestone.” Id. Within ninety days of achieving a milestone,
each state in which the relevant nonattainment area is located
must “submit to the Administrator a demonstration that the
milestone has been met.” Id. § 7511a(g)(2). That
demonstration “shall be submitted in such form and manner,
and shall contain such information and analysis, as [EPA] shall
require, by rule.” Id. Within ninety days of receiving the
demonstration, EPA determines whether that demonstration is
adequate. Id.

    The 2018 Rule allows states to demonstrate milestone
compliance in one of two ways: either with “actual emissions
reductions, as demonstrated with periodic emissions inventory
data,” or “[c]ompliance with control measures requirements in”
the relevant reasonable further progress plan. 2018
Implementation Rule, 83 Fed. Reg. at 63,011. Petitioners
                               16
challenge the implementation-based method, which allows
states to demonstrate that they have met a milestone by
showing “percent implementation,” that is, that the area has
implemented measures from the relevant plan projected to meet
that milestone, rather than by presenting actual emissions data.
Id. at 63,011–12. Petitioners argue that EPA’s interpretation is
unlawful and unreasonable, and that the agency failed to
respond adequately to comments raising concerns with its
approach.

     As for the former argument, it is true, as EPA points out,
that the statute provides that the milestone compliance
demonstration “shall be submitted in such form and manner,
and shall contain such information and analysis, as the [EPA]
shall require, by rule.” 42 U.S.C. § 7511a(g)(1). Given the
discretion that this provision allows, Congress has not
“unambiguously foreclosed the agency’s statutory
interpretation.” Catawba County, North Carolina v. EPA,
571 F.3d 20, 35 (D.C. Cir. 2009). Since Congress has not
spoken directly to this precise issue, our inquiry is governed by
Chevron step two. We ask whether EPA, in interpreting this
ambiguous provision, “‘has acted reasonably and thus has
stayed within the bounds of its statutory authority.’” Maryland,
958 F.3d at 1198 (quoting Utility Air Regulatory Group v.
EPA, 573 U.S. 302, 315 (2014)).

     Two closely related statutory provisions are particularly
relevant here. First, the “baseline emissions” from which
milestone compliance is to be measured are defined in terms of
“actual VOC or NOX emissions.” 42 U.S.C. § 7511a(b)(1)(B)
(emphasis added). Second, the provisions for reasonable
further progress make clear that “emissions reductions are
creditable toward the” required “15 percent” reduction only “to
the extent they have actually occurred.” Id. § 7511a(b)(1)(C)
(emphasis added). The statute later references and incorporates
                               17
this subsection into the milestone requirements. See id.
§ 7511a(g)(1). Significantly for our purposes, both provisions
are unquestionably quantitative and grounded in actual
emissions data. The second requires a quantitatively
measurable 15 percent reduction in actually occurring
emissions, id. § 7511a(b)(1)(B), and the first indicates that the
baseline from which milestone compliance is measured is
actual emissions, id. § 7511a(b)(1)(C). Notwithstanding EPA’s
focus on section 7511a(g)(1), sections 7511a(b)(1)(B) and (C)
demonstrate that milestones can be achieved only through
reductions in actual emissions, and that milestone compliance
can be demonstrated only through some form of actual
emissions data. See National Treasury Employees Union v.
Chertoff, 452 F.3d 839, 861 (D.C. Cir. 2006) (explaining that
an agency may not focus on one provision in such a way that it
“elevate[s] one provision of the [Act] over” other provisions).

      Highlighting the unreasonableness of EPA’s position, a
2004 Evaluation Report by the Office of the Inspector General
details how emissions may outpace projections and how a
SIP’s control measures may be less effective than anticipated.
Evaluation Report: EPA and States Not Making Sufficient
Progress in Reducing Ozone Precursor Emissions in Some
Major Metropolitan Areas, Office of the Inspector General
(Sept. 29, 2004), Joint Appendix (J.A.) 244–46. According to
the Evaluation Report’s executive summary, review of data
from the 1990s revealed that “States may have used inaccurate
data, assumptions, and projections of emission growth,
resulting in fewer reductions planned than appropriate.” Id. at
ii, J.A. 246. For example, it points to the Atlanta metropolitan
area, where the relevant ozone reduction plan “assumed a
[population] growth rate that was about half of the population
growth rate” that the area actually experienced during the
relevant period. See id., J.A. 246. Indeed, the Report devotes
an entire section to explaining how emissions reductions were
                                18
“underestimated due to inaccurate growth projections and other
factors.” See id. at 22–25, J.A. 249–52. The Report also
explains how implementation plans may be less effective than
anticipated, pointing out that Georgia’s program had projected
that its VOC emissions reductions plan would be 100%
effective but was ultimately only 81% effective. Id. at 20, J.A.
247. These problems, the Report finds, were compounded by
“[l]imited EPA oversight of the development and
implementation of emission control plans.” Id. at ii, J.A. 246.
Such     record     evidence     demonstrates   that     EPA’s
implementation-based approach will fall far short of the actual
emissions data that the statute contemplates.

     EPA has failed to address these shortfalls. When
Petitioners raised them during the rulemaking, EPA
“encourage[d] air agencies to work with their EPA Regional
office to develop a [milestone compliance demonstration]
suitable for the specific facts and circumstances of the
attainment plan,” which it claimed would “address[], as
appropriate, the potential emissions growth.” Response to
Comments on Implementation of the 2015 National Ambient
Air Quality Standards for Ozone: State Implementation Plan
Requirements, EPA (Oct. 31, 2018), J.A. 518. Yet, as
Petitioners point out, EPA never explained how that suggestion
would address the referenced shortfalls of the implementation-
based approach. Nor has EPA suggested that the problems
identified in the 2004 Evaluation Report are somehow
inapplicable or outdated today. Given such problems, EPA has
failed to show how its implementation-based approach can be
squared with the quantitative statute. That failure is all the more
glaring in light of the fact that the 1990 Amendments were
“purposefully crafted to limit EPA discretion” and to ensure
that actual emissions reductions were made. South Coast I,
472 F.3d at 887, 894–95; see H.R. Rep. No. 101-490, pt. 1, at
229 (1990) (“The objective is to achieve the standard as early
                               19
as possible with effective and enforceable measures and
without gaming by the States, industry, and others.”).

     According to EPA, it “makes sense” for baseline emissions
to be actual emissions “because those emissions are historic, as
a baseline should be.” EPA Br. 41. Consequently, it insists, the
provision’s reference to actual emissions says nothing about
“how States or EPA are to assess compliance with a
milestone.” Id.; see 42 U.S.C. § 7511a(b)(1)(B). This argument
falls flat. Given sections 7511a(b)(1)(B) and (C)’s focus on
actual, quantitative reductions in emissions, “[t]he
interpretation advanced by EPA cannot be squared with
Congress’s desire to limit EPA discretion” or with the statutory
structure. South Coast I, 472 F.3d at 894.

     EPA argues that the flexibility afforded by the
implementation-based approach is required by time schedules
established in other regulations. Specifically, although the
statute directs states to demonstrate milestone compliance
within ninety days of that milestone being met, 42 U.S.C.
§ 7511a(g)(1), “EPA regulations allow States twelve months to
report their inventory” due to “the complexities associated with
generating and verifying the data.” EPA Br. 42. For this reason,
EPA tells us, it would be difficult, if not impossible, for states
to comply with the ninety-day deadline if actual emissions data
were required. Perhaps so, but the statute requires quantitative
and actual emissions data, and “EPA may not construe the
statute in a way that completely nullifies textually applicable
provisions meant to limit its discretion.” Whitman, 531 U.S. at
485. EPA’s arguments miss the mark for an additional reason,
as they fail to explain how reductions from actual baseline
emissions numbers can be measured, or how emissions
reductions that actually occurred can be credited toward an
area’s progress, without actual emissions data. See 42 U.S.C.
§§ 7511a(b)(1)(B), (C).
                              20
     EPA makes two final arguments: that actual emissions
data is just as fallible as the modeling underlying the
implementation-based method, and that its review, together
with the contingency measures, will ensure that actual
reductions occur. But EPA made neither of these arguments in
the rulemaking, and as indicated above, “we cannot accept
appellate counsel’s post hoc rationalizations for agency
action.” National Ass’n of Clean Water Agencies v. EPA,
734 F.3d 1115, 1138 (D.C. Cir. 2013) (internal quotation marks
omitted).

     Given that the implementation-based approach is
“[un]reasonable in light of the Act’s text, legislative history,
and purpose,” we cannot defer to it. Southern California
Edison Co. v. FERC, 116 F.3d 507, 511 (D.C. Cir. 1997). We
thus have no need to reach Petitioners’ other arguments.

                              C.
    Petitioners’ next challenge also relates to the 2018
Implementation Rule’s interpretation of the reasonable further
progress requirements. Specifically, they challenge the
provision allowing states to choose between two alternative
baseline years.

     As explained above, the Act measures reasonable further
progress from a starting baseline year. See South Coast II,
882 F.3d at 1152. Although the statute establishes a baseline
year of 1990, it does not define baseline years for any future
NAAQS. 42 U.S.C. §§ 7511a(b)(1)(A)–(B); see South Coast
II, 882 F.3d at 1152. The 2018 Rule defines the default baseline
year as “the calendar year for the most recent triennial
emissions inventory preceding the year of the area’s effective
date of nonattainment designation.” 2018 Implementation
Rule, 83 Fed. Reg. at 63,005. If an area were designated
nonattainment in 2018, for example, the reasonable further
                              21
progress baseline year would be 2017, which “would be the
year of the most recent triennial emissions inventory.” Id. The
Rule also allows states to use an alternative reasonable further
progress baseline year that “corresponds with the year of the
effective date of an area’s designation.” Id.

     In South Coast II, we considered a challenge to a similar
provision in EPA’s 2015 Implementation Rule. That provision
allowed states to select an alternative baseline year between
2008 and 2012 if they provided appropriate justification. South
Coast II, 882 F.3d at 1152. We found that the 2015 Rule’s
default year—2011, the year for the most recently available
triennial emissions inventory preceding nonattainment
designation—was reasonable because it was “tied to the three-
year statutory cycle for emissions inventories.” Id. But because
“EPA ha[d] failed to provide a statutory justification” when it
came to the choice of an alternative baseline year, we vacated
the alternative baseline year portion of the 2015 Rule. Id. at
1152–53.

     Unlike in South Coast II, here EPA has “ground[ed] its
reasons for” both baseline year alternatives “in the statute,
rather than on reasoning divorced from the statutory text.” Id.
at 1152 (internal quotation marks omitted). The default year
definition in the 2018 Implementation Rule is the same one that
we sustained in South Coast II as grounded in the statute. See
id. at 1152–53. And the alternative year—“the year of the
effective date of an area’s designation,” 2018 Implementation
Rule, 83 Fed. Reg. at 63,005—is also rooted in the statute, as
1990 was the year when nonattainment designations first took
effect, see NRDC I, 777 F.3d at 464. Either option, then,
represents a reasonable interpretation of the ambiguous
baseline year provision.
                                22
     Although Petitioners concede as much, see Oral Arg. Rec.
15:10–15:30, 18:18–18:30, they nonetheless take issue with
EPA allowing states to choose between the two years. They
argue that this choice has no grounding in the statute. But it
does. As we pointed out in South Coast II, the Act contains a
gap with respect to the baseline year for future reasonable
progress requirements. 882 F.3d at 1152. The original year was
1990, which happened to be both the year that began the
triennial emissions inventory cycle and the year in which the
designations took effect. See 42 U.S.C. §§ 7511a(b)(1)(A)–
(B); South Coast II, 882 F.3d at 1152; NRDC I, 777 F.3d at
464. But now that an area may be designated in any year, and
now that the three-year statutory cycle for emissions
inventories is underway, not every post-1990 year will satisfy
both conditions for a particular area. As the Rule itself points
out, this is precisely what happened with the 2015 ozone
NAAQS: “for future promulgations and revisions of NAAQS,
the year of designations and the year of the most recent triennial
emissions inventory may not coincide[,] and for the 2015 ozone
NAAQS, they do not.” 2018 Implementation Rule, 83 Fed.
Reg. at 63,005. Because no single year can serve as a perfect
stand-in for 1990, EPA acted reasonably when it allowed states
to choose between two baseline year options, each of which is
“ground[ed] in the statute.” NRDC I, 777 F.3d at 468.

                                D.
     Lastly, Petitioners dispute EPA’s approach to the
contingency measure requirements. SIPs must include
contingency measures, or “specific measures to be undertaken
if the area fails to make reasonable further progress, or to attain
the national primary ambient air quality standard by the
[applicable] attainment date.” 42 U.S.C. § 7502(c)(9). These
“measures shall be included in the plan revision as contingency
measures to take effect in any such case without further action
by the State or the Administrator.” Id. In addition, SIPs must
                               23
“provide for the implementation of specific measures to be
undertaken if the area fails to meet any applicable milestone”
under Subpart 2’s ozone provisions. Id. § 7511a(c)(9). Like the
general measures, these “shall be included in the plan revision
as contingency measures to take effect without further action
by the State or the Administrator upon a failure by the State to
meet the applicable milestone.” Id.

     Petitioners challenge the 2018 Rule’s provision
“allow[ing] approval of already implemented measures as
contingency measures, so long as” those measures meet other
relevant parameters and the state does not rely on them for
reasonable further progress or attainment demonstrations. 2018
Implementation Rule, 83 Fed. Reg. at 63,026. The Rule
explains that this policy applies only outside of the Ninth
Circuit, which has “rejected” EPA’s interpretation “that
allowed states to rely on control measures that are already in
effect as a valid means to meet the contingency measure
requirement.” Id.; see Bahr v. EPA, 836 F.3d 1218, 1235–36
(9th Cir. 2016). Instead, the Rule invokes a Fifth Circuit
decision “upholding” EPA’s interpretation as applied to a
particular SIP. 2018 Implementation Rule, 83 Fed. Reg. at
63,026; see Louisiana Environmental Action Network v. EPA,
382 F.3d 575, 582–84 (5th Cir. 2004).

     We agree with Petitioners and the Ninth Circuit that
Congress has “directly spoken to the precise question at
issue”—that is, that previously implemented measures cannot
qualify as contingency measures. Chevron, 467 U.S. at 842–
43. The Act’s plain text expressly provides that valid
contingency measures become operative only when the
triggering conditions set forth in the statute occur, and not any
earlier.
                               24
     Using conditional and prospective language, both
provisions require SIPs to include measures “to be undertaken
if” certain conditions are not achieved, and both require that the
measures be included as “contingency measures” “to take
effect . . . upon” failure to meet the requirements. See
42 U.S.C. §§ 7502(c)(9), 7511a(c)(9). A measure “to be
undertaken if” certain standards are not met is, by definition, a
measure not yet implemented. See State Farm Fire & Casualty
Co. v. United States ex rel. Rigsby, 137 S. Ct. 436, 443 (2016)
(explaining that “if” and “unless” are “clear[] conditional
words”); Dodd v. United States, 545 U.S. 353, 358 (2005)
(explaining that the word “if” “impose[d] a condition on the
applicability of [a] subsection” and citing the dictionary
definition of the word, which was “in the event that” or “on
condition that” (internal quotation marks omitted)).
“[C]ontingency measures” that are “to take effect . . . upon”
failure to satisfy standards are likewise not measures that have
been implemented before such failure occurs. See Contingent,
The Merriam-Webster Collegiate Dictionary 270 (11th ed.
2009) (including as a definition of the adjective “contingent”
“dependent on or conditioned by something else”); Delaware
Department of Natural Resources & Environmental Control v.
EPA, 895 F.3d 90, 98 (D.C. Cir. 2018) (explaining that the
word “upon” denotes “a conditional context” in relation to
another provision of Subpart 2 of the Act). And measures that
are already implemented are not measures “to take effect” or
“to be undertaken” if the area fails to satisfy the applicable
requirements. See, e.g., Take effect, The Merriam-Webster
Collegiate Dictionary 1273 (defining “to take effect” as “to
become operative”); To undertake, The Merriam-Webster
Collegiate Dictionary 1365 (defining “to undertake” as “to take
upon oneself; set about,” “to put oneself under obligation to
perform,” “to accept as a charge or responsibility,” and “to
guarantee” or “promise”). They are simply measures that have
failed. See Bahr, 836 F.3d at 1235 (finding that the contingency
                                25
measures are “control measures that will be implemented in the
future”).

      EPA argues that “Congress was silent as to whether
already-implemented measures could serve as contingency
measures.” EPA Br. 53. As our court has explained, however,
“[t]o suggest . . . that Chevron step two is implicated any time
a statute does not expressly negate the existence of a claimed
administrative power (i.e. when the statute is not written in
‘thou shalt not’ terms), is both flatly unfaithful to the principles
of administrative law . . . and refuted by precedent.” Railway
Labor Executives’ Ass’n v. National Mediation Board, 29 F.3d
655, 671 (D.C. Cir. 1994) (en banc). Nor, contrary to EPA’s
argument, does it make any difference that four judges in other
circuits—three in the Fifth and one in the Ninth—have found
the statute ambiguous. See, e.g., Adams Fruit Co. v. Barrett,
494 U.S. 638 (1990) (finding a provision unambiguous on an
issue about which circuits had disagreed). Although we are
always interested in knowing how our sister circuits have
approached the same question in other cases, it is this court that
is interpreting the statute here, and this court has concluded that
the statute is unambiguous. That ends the matter. See Chevron,
467 U.S. at 842–43. EPA “cannot rely on its gap-filling
authority to supplement the Clean Air Act’s provisions when,”
as here, “Congress has not left the agency a gap to fill.” Natural
Resources Defense Council v. EPA, 749 F.3d 1055, 1064 (D.C.
Cir. 2014).

                                III.
     For the foregoing reasons, we grant in part and deny in part
the petitions for review in these consolidated cases.
Specifically, we vacate the provisions of the rule allowing (1)
interprecursor trading, see 2018 Implementation Rule, 83 Fed.
Reg. at 63,016–21; (2) use of the implementation-based option
for milestone compliance demonstrations, see id. at 63,010–12;
                              26
and (3) use of already implemented measures as contingency
measures, see id. at 63,026–27. We deny the petition for review
as to the provision allowing states to choose between two
alternative baseline years.

                                                   So ordered.