A foundational principle of American environmental law, that a state’s pollution should not become its neighbor’s problem, is now at the center of a high-stakes regulatory battle that could reshape air quality management for millions. The Environmental Protection Agency (EPA) has initiated a formal process to reconsider the 2023 “Good Neighbor Plan,” a regulation designed to curb industrial emissions that drift across state lines and contribute to smog. This move signals a significant pivot in federal policy, moving away from a federally enforced framework and toward a model that prioritizes state-level authority and economic considerations, igniting a fierce debate over the balance between industrial viability and public health.
The Battlefield of Air Quality: Understanding the Good Neighbor Plan
At the heart of this controversy is a long-standing mandate within the Clean Air Act known as the “interstate transport” or “good neighbor” provision. This clause requires upwind states to control air pollutants that prevent downwind states from meeting and maintaining National Ambient Air Quality Standards (NAAQS). Essentially, it establishes a legal responsibility for states to ensure their industrial activities do not compromise the air quality of their neighbors, making interstate cooperation a cornerstone of national environmental protection.
The Biden administration’s 2023 rule was a direct attempt to enforce this provision for the 2015 ozone standards. The plan established stringent limits on ozone-forming nitrogen oxide (NOx) emissions, which are major precursors to smog. The EPA at the time projected the rule would cut NOx emissions by 15% from 2019 levels, arguing it was a critical tool for protecting public health in downwind communities struggling with pollution they did not create. The significance of the rule lay in its comprehensive, multi-state approach, applying a federal solution where individual state plans were deemed insufficient.
While often associated with the energy sector, the Good Neighbor Plan’s reach extended far beyond power generation. The regulation’s emission limits applied to a broad swath of heavy industries, including fossil fuel-fired power plants, compressor stations for natural gas pipelines, and manufacturing facilities for cement, iron, steel, and glass. This wide scope meant that the rule’s economic and operational impacts were felt across multiple critical sectors of the American economy, placing them directly in the crosshairs of one of the most significant environmental regulations of the decade.
A Policy Reversal: The Rationale and Projected Repercussions
From Federal Mandate to ‘Cooperative Federalism’
The current EPA frames its proposed rollback as a return to “cooperative federalism,” a philosophy that emphasizes a partnership between federal and state governments rather than top-down federal mandates. The agency argues that the previous administration engaged in federal overreach by disapproving state-level plans that, according to new analysis, sufficiently demonstrated they would not significantly interfere with downwind air quality. This argument rests on the claim that states are best positioned to manage their own environmental compliance.
As a first step in this reversal, the EPA has moved to approve the State Implementation Plans (SIPs) for eight states—Alabama, Arizona, Kentucky, Minnesota, Mississippi, Nevada, New Mexico, and Tennessee—which the Biden administration had previously rejected. This administrative action effectively declares that these states have met their legal obligations, setting the stage for a broader dismantling of the federal plan. By validating these previously disapproved SIPs, the agency is systematically unwinding the federally enforced solution in favor of a state-led approach.
Balancing Economic Costs and Public Health Outcomes
Industry groups have largely welcomed this policy shift, citing the significant economic burden imposed by the 2023 rule. Organizations like the National Association of Manufacturers contended that the plan’s strict mandates threatened energy reliability, raised prices for consumers, and stifled job growth. Their perspective is that the original rule failed to consider the full economic costs and practical workability of its requirements, and that the new approach offers a more balanced regulatory environment.
In stark contrast, environmental and public health advocates warn of severe consequences. They argue that the rollback prioritizes industry profits at the expense of human health. Smog and its precursor pollutants do not respect state lines, making federal oversight essential to protect citizens in downwind states who are exposed to pollution from sources they cannot control. Groups like the Environmental Defense Fund point to the original plan’s projected public health benefits, including a reduction in asthma attacks and other respiratory illnesses, and argue that its reversal will lead to preventable sickness and death.
The Great Divide: Industry Profits vs. Public Health
Support for the EPA’s new direction is strong among industry stakeholders. Leaders from the manufacturing sector praise the proposal as a necessary course correction, one that acknowledges the real-world challenges of regulatory compliance. From their viewpoint, the 2023 Good Neighbor Plan represented an unworkable standard that could have forced plant shutdowns and disrupted supply chains. The rollback is seen as a move toward a more pragmatic approach that allows for economic growth while still holding states accountable for their environmental performance.
This perspective is fiercely contested by environmental organizations, which characterize the move as a dereliction of the EPA’s core duty. They argue that the agency is turning its back on millions of Americans who live in the path of cross-state smog. These groups maintain that without a strong federal backstop, upwind states have little incentive to invest in costly pollution controls, effectively allowing them to export their pollution. This creates a fundamental inequity, where residents of downwind states bear the health burdens of industrial activity happening hundreds of miles away.
Navigating the Legal Maze: The Role of the Courts
The legal landscape surrounding the Good Neighbor Plan has been in constant flux, with the Supreme Court playing a pivotal role. In a key ruling in June 2024, the Court stayed the enforcement of the rule while legal challenges proceeded, effectively pausing its implementation. This decision provided an opening for both industry and state-level opponents to mount a sustained campaign against the regulation.
A subsequent procedural ruling in June 2025 further altered the dynamics of the legal fight. The Supreme Court found that states could challenge the EPA’s disapproval of their SIPs in their respective regional appellate courts, rather than being confined to the D.C. Circuit, which typically hears cases involving national rules. This decentralization of legal challenges has made it potentially easier for individual states to contest federal environmental mandates, creating a more fragmented and complex legal battlefield for the EPA to navigate.
The Path Forward: Redefining Environmental Regulation
The reconsideration of the Good Neighbor Plan does not exist in a vacuum. It could set a powerful precedent for the durability of other federal environmental regulations, signaling that major rules can be undone with a shift in administrative priorities. This action is part of a broader trend of re-evaluating numerous Biden-era standards, suggesting a larger philosophical shift in how the federal government approaches its regulatory authority over industry and the environment.
Ultimately, this ongoing battle raises fundamental questions about the future of interstate pollution control. If the federal government steps back from its role as the ultimate enforcer of the Clean Air Act’s “good neighbor” provision, the responsibility for managing cross-state air quality will fall more heavily on states themselves. This could lead to a patchwork of varying standards and enforcement levels, complicating efforts to achieve national air quality goals and reshaping the balance of power between federal and state environmental agencies for years to come.
A New Precedent: Synthesizing the Impact of the Rollback
The EPA’s initiative to roll back the 2023 Good Neighbor Plan marked a decisive shift from a federally enforced, multi-state solution for interstate air pollution to a state-led approach centered on economic workability. This policy reversal was driven by a philosophy of “cooperative federalism” and supported by industries concerned about the economic costs of stringent regulation.
This action re-ignited a fundamental conflict between state autonomy, federal authority, and the protection of public health. The decision to approve previously rejected state plans and the ongoing legal challenges underscored the deep divisions in environmental governance. The outcome of this regulatory rollback has had far-reaching consequences, influencing not only air quality across dozens of states but also setting a precedent for the future of federal environmental oversight in the United States.
