US Chamber of Commerce, National Automobile Dealers Association Seek Review of EPA Decision Allowing States to Regulate Emissions
The US Chamber of Commerce and National Automobile Dealers Association (NADA) have filed a petition seeking review of the EPA’s decision to allow states to regulate automobile emissions. In a Nonbinding Statement of Issues filed Oct. 13, 2009, the two groups outlined the questions to be addressed by the United States Court of Appeals for the District of Columbia Circuit in their lawsuit challenging the EPA’s decision to grant California’s request for a waiver of federal Clean Air Act preemption. The waiver allows California to regulate vehicle emissions and other states to adopt those regulations. A decision adverse to the EPA would limit the ability of individual states to regulate greenhouse gas emissions but does not implicate EPA’s efforts to set national emissions standards. However, some industry watchers predict that this is just the beginning of a “hurricane of lawsuits” challenging climate-related regulations. New York and 16 other states have recently filed a motion to intervene on the side of the EPA.
Chamber of Commerce and NADA Challenge
In its challenge to the EPA decision to grant the waiver to California, the Chamber and the NADA raised six issues for the Court to decide:
- Whether the EPA erred in reconsidering and reversing the denial of California’s request to waive preemption for its greenhouse gas emission standards under Section 209(b);
- Whether the EPA erred in concluding that the California determination that its own gas emissions standards satisfy the Clean Air Act’s “protectiveness” standard was not arbitrary and capricious;
- Whether the EPA erred in not denying California’s waiver request because California did not meet the requirement of showing that its standards were needed to meet compelling and extraordinary conditions;
- Whether the EPA erred in not denying California’s waiver request because it was inconsistent with Section 202(a) of the Clean Air Act [which addresses “Emission standards for new motor vehicles or new motor vehicle engines”];
- Whether the EPA complied with procedural requirements of the Clean Air Act and Administrative Procedure Act in reversing its earlier decision; and
- Whether California is precluded from obtaining a preemption waiver for its greenhouse gas emission standards under the Energy Policy and Conservation Act of 1975.
States, Environmental Groups Intervene in Support of EPA
Seventeen states, led by New York, have moved to intervene in the lawsuit on the side of EPA. The other states are Arizona, Connecticut, Delaware, Illinois, Iowa, Maine, Maryland, Minnesota, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Washington, Florida, and Pennsylvania. The South Coast Air Quality Management District (California) also filed a separate motion to intervene in support of EPA and Administrator Jackson, as did the environmental organizations Environmental Defense Fund, Natural Resources Defense Council, the Sierra Club, and Environment California.
There has been no substantive briefing, but the EPA has filed a motion seeking an extension from the usual 30 days to respond to 90 days due to the complexity of the issues. The EPA previously stated that the decision to grant the waiver followed the law and was based on a comprehensive analysis of the science and that it is confident the courts will uphold the decision.
National Regulations
Earlier this year, the Obama administration reached consensus with the big three American automobile manufacturers on national regulation of greenhouse gas emissions from vehicles. On May 19, 2009, at a Rose Garden ceremony filled with representatives of major automobile manufacturers worldwide, President Obama announced that the EPA and National Highway Traffic Safety Administration will propose greenhouse gas emissions limits for cars and light trucks for model years 2012-16. The only way to reduce certain emissions is to increase fuel efficiency. Accordingly, the Administration’s proposal will require an average fuel economy standard of 35.5 mpg by 2016.
Then, on June 30, 2009, the EPA announced that it was reversing its decision under the Bush administration to deny California’s request for a waiver under the Clean Air Act. By reversing its decision and granting the waiver, the EPA is permitting California to enforce its own emission regulations. Fifteen states have already adopted the California plan. After 2011, compliance with the anticipated national regulations would satisfy the California standards, so assuming the national regulations are finalized in time, the waiver effectively allows states to impose regulations applicable to the model years 2009-2011. However, California could also impose more stringent restrictions after 2016.
The Chamber opposes such regulation because of the heavy burden it predicts will be placed on US businesses, and has previously attempted to slow or derail EPA regulation of greenhouse gas emissions under the Clean Air Act. The Chamber sought a hearing regarding the EPA’s decision to regulate GHGs under the CAA, and stirred controversy by characterizing the proposed hearing as a “Scopes monkey trial” on climate science. Some members have canceled their membership in the Chamber because of disagreement with the Chamber’s position on regulation of greenhouse gases. Meanwhile, advocates of increased regulation of greenhouse gas emissions have also excoriated the Chamber’s position on EPA regulations. Whatever their position, stakeholders on all sides of the issue will be closely watching the outcome of this lawsuit.
Obama directs EPA to reconsider denial of California waiver - enabling states to set stricter standards regulating vehicle greenhouse gas emissions
*Updated 1/27/09 - added link to text of memorandum.
President Barack Obama today issued a memorandum directing the EPA to reconsider a previous denial of waivers to California and at least twelve other states, allowing them to set auto emissions standards stricter than the current federal standard. The move would reverse a Bush administration decision denying California’s application for a waiver, and would open the door for stricter regulations in many other states. Some 17 states, including New York and Florida – accounting for up to 50% of the US population – have already adopted or are considering the stricter California standards, which require the EPA waiver of federal preemption in order to be enforceable.
As part of California’s aggressive effort to reduce greenhouse gas emissions, California passed a law to regulate vehicle emissions in the state, but enforcement of the regulations implementing the law was blocked by years of litigation, ultimately concluding that California could move forward only with a waiver from the EPA. Under the Bush administration, the EPA denied the waiver, contending that allowing states to set their own pollution rules would create an unenforceable and unworkable patchwork of regulations.
Last week, California Governor Arnold Schwarzenegger sent a letter to President Obama requesting reconsideration of the waiver denial, while California Air Resources Board (CARB) Chairwoman Mary Nichols appealed directly to new EPA administrator Lisa Jackson to open a “reconsideration process.”
While Obama’s directive does not explicitly demand that the EPA grant the waiver request, it is widely assumed that the agency will do so. At her Senate confirmation hearing earlier this month, Jackson indicated that she would reconsider the request and hinted that she would grant a waiver. A final decision from the EPA, however, is expected to take several months, and will likely face additional legal challenges.
Meanwhile, the auto industry is faced with the prospect of being forced to spend billions of dollars to comply with the stricter California emissions rules. Currently, only two mass-produced vehicles, the Toyota Prius and the hybrid Honda Civic, average at least 42 mpg. To reach that level fleetwide would require significant investment in new technologies, including hybrid vehicle technology. Auto industry estimates claim that the cost of compliance with the California standard could be as high as $5,000 per-vehicle. These costs and their impact are the subject of multiple lawsuits. (See Green Mountain Chrysler v. Crombie (D. Vt. 2007); Central Valley Chrysler v. Goldstene (E.D. Cal. June 2008); and Lincoln Dodge, Inc. v. Sullivan (D. R.I. Nov. 2008).)
The quick action the Obama administration on this issue – coming less than a week into his term in office – suggests an aggressive stance on climate change and could signal more far-reaching policy shifts to come.
