In an unprecedented move expected to draw a swift legal challenge, the Trump administration Sept. 19 officially revoked California's authority to set its own greenhouse gas standards for vehicles, a key pillar of the state's strategy to curb its largest source of planet-warming emissions.
The rule, jointly issued by the U.S. Environmental Protection Agency and National Highway Traffic Safety Administration, or NHTSA, asserted that only the federal government can set vehicle fuel economy standards. That claim, which has already failed twice in federal district courts, could eventually be decided by the U.S. Supreme Court.
The Trump administration proposed in August 2018 to freeze Obama-era Corporate Average Fuel Economy, or CAFE, standards for cars and light-duty trucks that were set to ratchet up to 54.5 miles per gallon by 2025; real-world fuel economy values are about 20% less. The proposal, dubbed the Safer Affordable Fuel-Efficient Vehicles, or SAFE, rule, would freeze fuel economy standards at about 37 miles per gallon for model years 2020 through 2026.
The proposed SAFE rule also would revoke a waiver the EPA granted to California in 2013 allowing the state to set its own tougher car emissions rules for model years 2017 through 2025. It further proposed to revoke California's authority to even seek such a waiver. Its ability to do so dates back to 1967 when a provision was added to what is now Section 209 of the Clean Air Act so the state could take tougher action to address its chronic smog problem. Since then, the EPA has granted more than 50 waivers to California under that section of the statute.
Thirteen states and the District of Columbia now follow California's standards, with some of them including the requirements as part of their state implementation plans to meet the National Ambient Air Quality Standards for soot and smog pollution. While the George W. Bush administration proposed to deny a waiver application from California in 2008, which the Obama administration later withdrew, no administration has ever withdrawn a waiver that has already been granted to the state.
Looming court battle
The EPA has now decided to finalize and separate its move to strip California of its 2013 waiver and authority to seek such a waiver from the SAFE rule, which is still pending. Nevertheless, during a Sept. 19 event in Washington, D.C. announcing the final waiver revocation rule, EPA Administrator Andrew Wheeler continued to tie the two actions together.
"One national [vehicle emissions] standard provides much-needed regulatory certainty for the automotive industry and sets the stage for the Trump administration's final SAFE rule that will save lives and promote economic growth by reducing the price of new vehicles to help more Americans purchase newer, cleaner, and safer cars and trucks," Wheeler said.
However, the EPA's own career staff disputed the technical analysis of the SAFE rule during the rulemaking phase, estimating the proposal would actually increase vehicle fatalities due to a spike in vehicle miles traveled and would cost the U.S. economy thousands of jobs.
The EPA and NHTSA also estimated the SAFE rule would increase CO2 emissions by 713 million tonnes compared to retaining the Obama-era standards. That is roughly equal to 40% of total CO2 emissions from the U.S. transportation sector in 2016, according to EPA data.
The agencies justified the Sept. 19 action in part by asserting that California's waiver authority under the Clean Air Act is preempted by the Energy Policy and Conservation Act of 1975, which charged the NHTSA with setting fuel economy standards.
"Today's action meets President Trump's commitment to establish uniform fuel economy standards for vehicles across the United States, ensuring that no state has the authority to opt-out of the nation's rules, and no state has the right to impose its policies on the rest of the country," Transportation Secretary Elaine Chao said at the event.
However, Sen. Ed Markey, D-Mass., who co-authored fuel economy provisions in a 2007 law that amended the Energy Policy and Conservation Act, called any claim that federal law preempts California from setting its own standards "legally flawed." "We specifically worked to preserve California's long-standing right under the Clean Air Act to establish its own greenhouse gas tailpipe standards, and under no circumstances moved to preempt it," Markey told reporters on a Sept. 18 conference call.
The call was arranged after President Donald Trump made the policy announcement earlier the same day in a series of tweets ahead of an appearance at a fundraising event in Los Angeles.
On the Sept. 18 call, California Air Resources Board Chairwoman Mary Nichols linked the waiver withdrawal to an agreement the state reached in July with four major automakers collectively representing 30% of the U.S. auto market: Ford Motor Co., Honda Motor Co. Ltd., Volkswagen AG and Bayerische Motoren Werke AG.
We heard "that the president was just outraged about the four companies that not only were not supporting his actions but were actually willing to go talk to California," Nichols said.
The U.S. Department of Justice launched an antitrust investigation against the four companies shortly after the deal was announced, prompting demands for more information about the probe from congressional Democrats.
Nichols suggested during the call that the EPA and NHTSA opted to separate the waiver withdrawal from the SAFE rule because the agencies are struggling to correct key errors in the technical analysis justifying the weaker standards. "They clearly don't have the rule ready because they've never been able to pull together an adequate legal, scientific or technical record to support the rollback."
But EPA General Counsel Matthew Leopold expressed confidence Sept. 19 that the administration's waiver withdrawal will hold up in court. "We're ready to defend our interpretation of the waiver withdrawal along with the preemption theory, and we're very confident that courts will review that favorably."
During the press event, Chao said the SAFE rule would be finalized in a matter of weeks. But Wheeler told reporters that the EPA is still "looking at all the options right now" and has not made a final decision on any final standards. Leopold said he expected the SAFE rule to be finalized sometime in the fall.
