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Today, a federal appeals court rejected the Bush administration's plan for regulating mercury emissions from coal-fired power plants. Environmental groups and more than a dozen states that brought the suit, say power plants will now have to clean up their emissions faster.

NPR's Elizabeth Shogren reports.

ELIZABETH SHOGREN: Mercury can impair children's developing nervous systems, hurting their ability to think and learn. People are exposed to mercury by eating contaminated fish. In the United States, power plants are the biggest source of mercury pollution. The Bush administration's Environmental Protection Agency inherited a requirement to regulate power plant emissions. But instead of setting tough pollution limits for each plant, the administration wanted to create a cap and trade system. At the time, Jeff Holmstead headed the EPA's air programs.

Mr. JEFFREY HOLMSTEAD (Environmental Protection Agency): Some facilities can relatively, cheaply get a 90 percent reduction. Other facilities have a very hard time even getting a 50 percent reduction. And so some plants can create emission credits that they can then sell to someone else who can't control as well.

SHOGREN: The administration's plan would cut emissions by 70 percent. But big reductions actually wouldn't come for more than a decade. The EPA had to first take mercury from power plants off the list of hazardous air pollutants because those pollutants must be controlled quickly and from every plant. The Federal Appeals Court in D.C. rejected the Bush administration's approach. In fact, it accused it of using, quote, "the logic of the queen of hearts."

Mr. JAMES PEW (Lawyer): The queen of hearts was one of the "Alice in Wonderland" characters who was supremely illogical.

SHOGREN: James Pew is a lawyer for Earthjustice. He argued the case for environmental groups and 16 states.

Mr. PEW: The whole point of Alice's trip through Wonderland is that she keeps running into characters who make no sense at all. Whenever the court starts making allusions to "Alice in Wonderland," you know that what the agency has done doesn't make very much sense.

SHOGREN: Pew says, now, the EPA will have no choice but to come up with a new rule that will be very strict and apply to every power plant. But EPA's Jonathan Shradar says the court did not rule out a cap and trade system.

Mr. JONATHAN SHRADAR (Environmental Protection Agency): Cap and trade could potentially be back in another form.

SHOGREN: Shradar says the EPA has not decided whether it will appeal the ruling. But he says there will be years of delay.

Mr. SHRADAR: We're very disappointed that the court rolled back essentially the first ever regulation for mercury emissions from power plants - first ever on the globe.

SHOGREN: About half the states have approved mercury regulations that are tougher than the federal rules. And at least some of them expect to be able to push ahead with their programs. Pennsylvania's plan requires cuts of 80 percent by 2010 and 90 percent by 2015.

Ms. KATHLEEN McGINTY (Secretary, Environmental Protection; Pennsylvania): We're full steam ahead.

SHOGREN: Kathleen McGinty is Pennsylvania's secretary of Environmental Protection.

Ms. McGINTY: Mercury isn't just any kind of pollutant. It is a dangerous neurotoxin that snaps away the future of young children.

SHOGREN: McGinty says it was wrong for the Bush administration to delay big cuts in mercury pollution for more than a decade because of what's at risk.

Ms. McGINTY: And on top of that, we have the technology to get the job done and it's cost effective technology.

SHOGREN: It's not clear what many other states will do especially those that had adopted the Bush plan. Holmstead, the former EPA official, now represents power companies as a lawyer and lobbyist.

Mr. HOLMSTEAD: There's an enormous amount of uncertainty here about what happens next.

SHOGREN: He predicts there will be lots of litigation until the EPA comes up with a new mercury rule - probably under the next administration.

Elizabeth Shogren, NPR News, Washington.

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