The Clean Air Act requires states to reduce pollution that is carried in the atmosphere and subsequently prevents other states from maintaining healthy air pollution levels, as established thorough National Ambient Air Quality Standards  (NAAQS) mandated by Sec. 110  of the Act. As part of a state's NAAQS attainment plan, it must reduce pollution that would prevent other states from meeting standards for particulate matter (PM) established in 1997 and standards for ground-level ozone set in 2006. Of course, other rules ensure that downwind states are taking steps to reduce their own emissions. A sophisticated set of models was used to determine to what extent reductions in upwind pollution would be needed to improve downwind air quality.
The Cross-State Air Pollution Rule (CSAPR) sets new standards for controls on power plants that cause much of the oxides from nitrogen (NOx) and sulfur dioxide (SO2) (which react and become ozone and fine PM, ozone, and PM that travel downwind and across state lines. These standards come in the form of an enforceable Federal Implementation Plan  (FIP), which states can elect to replace with their own State Implementation Plan  (SIP). These plans will use tradable air permits to reduce emissions.
EPA expects that after implementation of CSAPR, all but two areas currently in nonattainment (Houston-Galveston, TX and Liberty-Clairton, PA), will become attainment areas for these pollutants by 2014.
This rule will affect 3,632 electric generating units at 1,074 coal-, gas-, and oil-fired facilities in 27 eastern states and the District of Columbia. Each state has different required emissions reduction, and for some states, the reductions requirements are only applicable during the summer ozone season. Compliance can take many forms, including using low sulfur coal, increased maintenance, or technologies such as scrubbers, dry sorbent injection, and low NOx burners.
Image Source: EPA
The first rule related to the downwind transportation of these pollutants was the Clean Air Interstate Rule (CAIR), promulgated in 2005 under the Bush Administration. The scope of CAIR was similar to CSAPR, but had geographic and compliance differences. A 2008 court decision found CAIR to be unlawful and vacated the rule. EPA appealed the suspension of the rule, and the court agreed, with the stipulation that CAIR would be implemented as planned, starting on January 1, 2009, until EPA created a replacement.
In turn, CSAPR was proposed on July 6, 2010 and was the subject of three public hearings and three notices of data availability. The rule was finalized one year later on July 6, 2011 based on public comment solicited on data and models. Significant changes were made between the proposed and final rules, most notably, Texas was included in the final rule.
The first phase of CSAPR compliance was to begin January 1, 2012, for SO2 and annual NOX reductions and May 1, 2012, for ozone season NOX reductions. The second phase of CSAPR was to begin January 1, 2014 and increase the stringency of SO2 reductions in several states.
However, on December 30, 2011, the DC Circuit Court ordered a stay of CASPR and ordered that CAIR be implemented until judicial review of CASPR was completed. On August 21, 2012, the same court ultimately vacated CSAPR and ordered that CAIR be continued to be implemented until the rule is rewritten. The Supreme Court accepted the Administration’s petition to review the lower court’s ruling. On April 29, 2014, the Supreme Court upheld EPA’s authority to regulate cross-state air pollution by reversing the DC Circuit Court’s ruling vacating CASPR. On June 25, 2014, the Administration petitioned the lower court to lift the stay on CSAPR. CAIR remains in place and no immediate action from States or affected sources is expected while the court considers the motion.
Read more from EPA  on the CSAPR.