The Trump administration will announce plans this week to revoke Californiaโs authority to regulate greenhouse gas emissions for automobiles, according to inside sources quoted by Bloomberg.
This directly contradicts comments made by the Environmental Protection Agencyโs (EPAโs) air chief, William Wehrum, who said in January that the agency had โno interest whatsoever in withdrawing CA‘s authority toย regulate.โ
The Trump administrationโs proposal would also, according to Bloomberg, โcap federal fuel economy requirements at the 2020 level, which under federal law must be at least a 35-mile-per-gallon fleet average, rather than letting them rise to roughly 50 mpg by 2025 as envisioned in the planโ currently on the books, which President Obama had negotiated with the auto industry and the state ofย California.
The proposed plan would thus break from decades of precedent guaranteeing Californiaโs right under the Clean Air Act to set its own air pollution standards, and disregards the auto industryโs own arguments for preserving strong fuel economy and emissionsย standards.
Californiaโs Clean Air Act Waiver Prevents Emissions Standard RollbacksโฆForย Now
Under the Clean Air Act of 1970, California has the right to request a waiver from the EPA to allow state air regulators to set tailpipe emissions standards independent of federal regulations. If the proposed standards are โat least as protective of public health and welfareโ as the EPAโs, the agencyโs administrator is compelled by the Clean Air Act to grant theย waiver.
In 2009, the EPA granted such a waiver for greenhouse gas emissions from automobiles, though California never set its own tougher standards because it immediately agreed to the unified โOne National Programโ of emissions and fuel economy standards with the EPA and the Department ofย Transportation.
So, under the current regulatory regime, Californiaโs waiver is redundant. But if the Trump administration moves to lower the federal standards for greenhouse gas emissions from cars and light duty trucks, Californiaโs waiver would allow the stateโs air resources board (CARB) preserve the current, strongerย standards.
Other states are also allowed under the Clean Air Act to sign onto Californiaโs standards (theyโre often called โ177 states,โ after the section in the Clean Air Act that grants them this right), and currently 14 states plus the District of Columbia have done so, together representing more than one-third of the countryโs auto market. Last month, Colorado became the latest state to formally adopt Californiaโs standards, in a move that was seen as directly defiant of the EPAโs threats to roll back emissionsย standards.
The prospect of multiple regulatory regimes is unpalatable for automakers, who would then have to decide whether to set up two different production lines for states following the California standards and the rest of the country, or whether to treat Californiaโs targets as a de facto national standard. In May, Mitch Bainwol, head of the Alliance of Automobile Manufacturers (or Auto Alliance), the main domestic trade group of car companies, warned Congress of aย โregulatory nightmareโ if the federal standards and Californiaโs were notย aligned.
To preserve one national standard, the administration could either keep the plan thatโs in place, forge another grand bargain between automakers, EPA, DOT, and the state of California, or the EPA would have to strip California of itsย waiver.
In the history of the Clean Air Act, a waiver that has previously been granted to California has never been revoked. If acting administrator Andrew Wheeler does attempt to revoke the waiver, it would almost certainly bring about years of litigation from California and the rest of the โ177 states,โ and subsequently bring about years of regulatoryย uncertainty.
Koch Allies Take on Californiaโsย Waiver
If the administration does indeed go after Californiaโs waiver, it will be fulfilling the wishes of a a number of conservative organizations, many with close ties to the Koch brothers and Koch Industries. In April, the American Consumer Institute (ACI) organized a letter to then EPA administrator Scott Pruitt calling โfor the revocation of Californiaโs waiver from the Clean Air Act, which allows the state to decouple from federal policy and impose strict emission standards onย automobiles.โ
Eight of the eleven groups that signed the ACI letter have clear financial or organizational ties to the Koch network, including the Taxpayers Protection Alliance (TPA), FreedomWorks, the Competitive Enterprise Institute (CEI), and Americans for Tax Reform.
In May, three former members of President Trumpโs transition teams โ all of whom work or worked with Koch-funded and Koch-founded organizationsโsent the president another letter, which also argued for the EPA to withdraw Californiaโs legislated right to set its own tailpipe emissionsย standards.
As DeSmog reported at the time, that โletter was signed by Tom Pyle of the Institute for Energy Research (IER), Myron Ebell of the Competitive Enterprise Institute, and Shirley Ybarra, a former fellow at the Reason Foundation. All three organizations have close Koch ties, and Pyle was himself a lobbyist for Koch Industries, the petrochemical empire privately owned by billionaire brothers Charles and Davidย Koch.โ
Trumpโs Auto Rollback Plan Ignores Automaker and Industry Partsย Suppliers
The Trump administrationโs plan, as reported by Bloomberg, disregards the arguments and wishes of the auto industry, which has in recent months rallied to support more stringent emissions standards, while asking for minor adjustments to the current regulations to accommodate some โflexibilitiesโ in meeting theย standards.
In March, Bill Ford, chairman of Ford Motor Company, wrote that his company was โnot asking for a rollback,โ a sentiment he reaffirmed in a May shareholder meeting. Honda, likewise, urged the administration to provide some flexible mechanisms for compliance, โwithout a reduction in overall stringency.โ
Meanwhile, automotive parts suppliers have maintained a consistent position that strong CAFE and emissions standards are good for business, good for the economy, and good for Americanย competitiveness.
A group of parts and equipment manufacturers joined forces in March to form the Automotive Technology Leadership Group, with a goal of advocating for continuing current fuel economy standards and reducing emissions.
โWe โฆ believe it is in the nationโs best interest for the U.S. to continue leading in the development and manufacture of the cleanest and most efficient vehicles in the world,โ the Leadership Group wrote in its โStatement of Principles.โ โThe innovation brought on by competition and our national performance standards has created hundreds of thousands of jobs in this country and significant market opportunities for U.S. companiesย abroad,โ
The BlueGreen Alliance has calculated that the industry as a whole has record high employment and that parts suppliers benefit greatly from ambitious fuel economy standards. Figures from Environmental Defense Fund echo the sentiment, revealing record sales, profitability, and job growth during the very same period that the current clean car standards have been in place.
The Trump administrationโs proposal, expected to be announced publicly later this week, will immediately implode the regulatory certainty that the auto industry relies on for planning, profitability, and growth. The proposal will be opened up for public comment before it is finalized, though states will not wait to launch legalย challenges.
In May, seventeen states and the District of Columbia sued the EPA to preserve the Obama-era standards. That suit, which has yet to be argued before federal courts, will likely be updated to reflect the administrationโs now-official plans to halt the increase in fuel efficiency and emissions standards and to revoke Californiaโs special waiver. Californiaโs attorney general and regulators have been outspoken in their intent to defend the stateโs right to regulate greenhouse gas emissions from personal vehicles, and a lengthy legal battle now seems all butย certain.
Main image: Los Angeles traffic. Credit:ย Jeff Turner,ย CC BYย 2.0
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