Trump seeks to repeal California’s smog-fighting power

By Ryan Beene, Jennifer A. Dlouhy, John Lippert and Ari Natter on 7/24/2018

WASHINGTON D.C. and CHICAGO (Bloomberg) -- The Trump administration will seek to revoke California’s authority to regulate greenhouse gas emissions -- including its mandate for electric-car sales -- in a proposed revision of Obama-era standards, according to three people familiar with the plan.

The proposal, expected to be released this week, amounts to a frontal assault on one of former President Barack Obama’s signature regulatory programs to curb emissions that contribute to climate change. It also sets up a high-stakes battle over California’s unique ability to combat air pollution and, if finalized, is sure to set off a protracted courtroom battle.

The proposed revamp would also put the brakes on federal rules to boost fuel efficiency into the next decade, said the people, who asked to not be identified discussing the proposals before they are public. Instead it would cap federal fuel economy requirements at the 2020 level, which under federal law must be at least a 35-mi/gallon fleet average, rather than letting them rise to roughly 50 mpg by 2025 as envisioned in the Obama plan, according to the people.

As part of the effort, the U.S. Environmental Protection Agency will propose revoking the Clean Air Act waiver granted to California that has allowed the state to regulate carbon emissions from vehicle tailpipes and force carmakers to sell a minimum number of electric vehicles in the state, the people said.

The U.S. National Highway Traffic Safety Administration will likewise assert that California is barred from regulating greenhouse gas emissions from autos under the 1975 law that established the first federal fuel-efficiency requirements, the people said.

The proposal is still in the final stages of a broad interagency review led by President Donald Trump’s Office of Management and Budget, but these major elements of the plan are not expected to change, the people said. Once the agencies formally unveil the proposal, the public will have a chance to weigh in, with those comments used to develop a final rule that could be implemented as soon as the end of the year.

Messages seeking comment from OMB, NHTSA and the EPA were not returned. California Air Resources Board head Mary Nichols declined to comment, as did a spokesman for California Governor Jerry Brown.

Although the proposal will outline other options, the administration will put its weight behind the dramatic overhaul, including the revocation of California’s cherished authority, the people said.

The state’s 2009 waiver under the Clean Air Act has allowed California to set emissions rules for cars and trucks that are more stringent than the federal government’s. But the state has aligned its rules with those set by the EPA and NHTSA in a so-called national program of clean-car rules. The forthcoming plan also could create a new opportunity for negotiations between Washington and Sacramento on a harmonized standard. Trump directed his agency leaders to pursue one on May 11, but the talks haven’t occurred.

If Trump’s plan sticks, it could be his biggest regulatory rollback yet. Agencies are expected to claim it will reduce traffic fatalities by making it cheaper for drivers to replace older, less-safe cars, while paring sticker prices for new vehicles even if motorists have to buy more gasoline.

“California has done the math, and it’s concluded that the only way to meet both its greenhouse gas goals and its ozone targets is to move away from fossil fuel-based transportation,” said Paul Cort, an attorney for Earthjustice, a San Francisco-based environmental group. “The law is very clear about California’s authority to set these standards, and for the EPA to try to narrow it now means they have an uphill battle.”

California, for its part, rejects the idea that its 48 years of ability to write its own tailpipe emission rules should end. “We have the law on our side, as well as the people of the country and the people of the world,” said Dan Sperling, a member of the state’s Air Resources Board.

California, with more than 2 million new cars and light trucks sold last year, is the nation’s biggest state market -- on par with Canada. A dozen other states follow California’s vehicle rules, and together account for more than a third of U.S. auto sales. Colorado also plans to adopt California’s clean-car rules.

California and 16 other states plus the District of Columbia filed a lawsuit on May 2 seeking to block the Trump administration’s effort to unravel the Obama-era emissions targets. Sperling said that number will grow as more people come to realize how fundamentally Trump is attacking the idea of states’ rights.

The administration also will have a tough time proving that tailpipe emission standards don’t need to get tougher after 2020, said Ann Carlson, a University of California at Los Angeles law professor, pointing to evidence that the emissions are contributing to climate change and the fact that the technology to reduce them already exists.

Automakers Stuck

Caught somewhere in the middle are automakers, which in recent months have stressed they would not support freezing the federal targets and want Washington and Sacramento to continue linking their vehicle-efficiency goals. While they spent the first year of the Trump administration attacking Obama’s rules as too costly, they fear the regulatory uncertainty that a years-long court battle over a rollback would create. In addition, other major auto markets such as China and Europe are pressing forward with tougher mandates of their own for cleaner cars.

“This is a huge shift in regulatory oversight, and while it initially looks like a benefit for automakers it adds a level of uncertainty none of them want,” Karl Brauer, executive publisher Kelley Blue Book, said in an emailed statement.

A spokesman for the Alliance of Automobile Manufacturers declined to comment. The Washington-based trade association represents a dozen carmakers including General Motors Co., Daimler AG and Toyota Motor Corp.

States’ Rights

“This is nothing less than an outrageous attack on public health and states’ rights,” said Frank O’Donnell, president of Clean Air Watch. “It’s a dumb move for an administration that claims it wants peace, because this will lead to an emissions war: progressive states versus a reactionary federal government. The big question: Who will the car companies back?”

Some conservatives have long chafed at the rare authority granted California and welcome the effort to revoke.

“Congress didn’t intend for California to set national fuel economy standards,” said Steve Milloy, a policy adviser for the Heartland Institute, a group critical of climate science. “It’s nutty it’s been allowed to develop. National fuel economy standards are set by the federal government so that’s what we are going to do."

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