Good Neighbor provision
The Sting in the Tail of the Clean Air Act
Weakening restrictions on polluters can trigger different restrictions.
Some of Trump’s most important anti-environmental moves involve unleashing air polluters. There’s a problem with this strategy, however. Doing so raises air pollution levels, which can bring states into collision with other Clean Air Act (CAA) requirements. Thus, the effect could be much tighter restrictions on other sources to compensate for looser standards on some. Worse, this effect isn’t limited to the most directly affected states. They may turn around and demand that upwind states reduce their own emissions to help the downstream states meet federal standards. Even when this isn’t true, and where the state that suffers may be Democratic-leaning and thus of no concern to Trump, there could be economic repercussions in other states.
Two notable examples of this problem involve coal generators and vehicle regulation. The first example involves coal. Trump has exempted coal-fired power plants from pollution limits to allow them to remain open longer. According to E&E News, “Air pollution from coal-fired power plants spiked in 2025, a striking reversal of long-term progress in air quality as the Trump administration boosted coal use. The emission increases were among the largest in at least a quarter-century, on a percentage basis, as the bulk of about 210 power plants registered increased sulfur dioxide and nitrogen oxide emissions,” Power plant sulfur-dioxide emissions were up 18% and nitrogen oxides were up 12%. This is contrary to a strong long-term declining trend.
The second example involves vehicle emissions. Under the CAA, state laws regulating vehicle emissions are generally preempted, but California can apply for a preemption waiver if it needs stricter regulations, and other states can piggyback on California’s standards. California’s ability to seek a waiver has been more limited since, at Trump’s instigation, Congress overturned EPA’s approval of several California waiver requests. The Trump Administration has independently taken the view that California can’t require manufacturers to sell more EVs as a way to meet standards. Although Republicans were mostly targeting California’s standards for greenhouse gases, they have also hampered California’s ability to get waivers for smog and particulates.
The problem arises because stopping a state from regulating some polluters may legally require it to tighten other regulations. Under CAA section 110, states must have state implementation plans that will achieve national air quality standards set by EPA. If one type of source pollutes more, other sources must offset the increased pollution by polluting less. Other CAA provisions put the screws on states that exceed the national standards. As a result, if the Feds exempt one source of nitrogen oxides (perhaps by repealing California waiver), states that had adopted the California standard will need to tighten regulations of other sources. Thus, exempting nitrogen oxides from trucks or cars, or from coal power plants, might require stricter controls on other sources such as natural gas power plants. Moreover, if a state is unable to achieve the national air quality standard, the so-called “Good Neighbor” provision allows it to demand emission reductions from upwind states.
In other words, exempting some sources increases the regulatory burden on others. The exemption may even increase the total regulatory burden, if pollution from those other sources is more expensive to control than pollution from the exempted sources. Here’s why.
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