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.
EPA grants California request for waiver, enabling states to set vehicle GHG emissions standards more stringent than national standards
The Environmental Protection Agency has reversed the Bush Administration's denial of California's request for a waiver to set its own, state-specific greenhouse gas emission limits from cars, and granted California's petition for a waiver. President Obama had issued a memorandum directing his newly appointed EPA Administrator to direct the agency to re-consider California's waiver petition.
“After review of the scientific findings, and another comprehensive round of public engagement, I have decided this is the appropriate course under the law,” EPA Administrator Lisa P. Jackson said. “This waiver is consistent with the Clean Air Act as it’s been used for the last 40 years.” Thirteen states and the District of Columbia have already gone through the formal process of adopting the California standards.
California had first asked for a waiver to impose its own, more stringent limits on greenhouse gas emissions in December 2005. The EPA at that time took the position that it did not have the authority to regulate those emissions under the terms of the Clean Air Act. That argument was rejected by the Supreme Court in 2007 in the case of Massachuetts v EPA, in which the Supreme Court ruled that EPA has the authority to regulate GHGs under the Clean Air Act if they cause or contribute to air pollution that may reasonably be anticipated to endanger public health or welfare. In that case, twelve states and several cities had brought suit against the EPA to force the agency to regulate carbon dioxide and other greenhouse gases as "pollutants" under the Clean Air Act. EPA had taken the position that it did not have the authority to regulate carbon dioxide and green house gases under the CAA because they were not "pollutants" pursuant to the terms of the Act. The Supreme Court disagreed, and required EPA to evaluate whether greenhouse gas emissions from cars – as "pollutants" under the Act – should be regulated.
After the Supreme Court's ruling, EPA reconsidered the issue and again refused to regulate carbon dioxide and greenhouse gas emissions. It also denied at that time California's petition for a waiver to set its own tailpipe emission standards.
In May 2009, the Obama Administration announced new national auto emissions standards that will require automakers to boost the average fuel efficiency of cars sold in the US from their current level of 25.1 miles per gallon to 35.5 miles per gallon starting in 2012. California's new auto emission standards, which are effective immediately, will apply for car models for the years 2009 to 2011. Subsequently, from 2012 to 2016, all carmakers that comply with the new national program will be considered to be in compliance with California's requirements. After 2016, California may again be able to set more stringent limits than the national limits existing at that time.
EPA to reconsider California emissions waiver request
On Friday, the US Environmental Protection Agency formally agreed to reconsider California's request for a waiver from the Clean Air Act -- specifically, the state's request for authority to impose its own state regulations on vehicles in an effort to reduce greenhouse gas emissions. One of President Barack Obama's first actions when he took office included signing an order requesting that the EPA reconsider the Bush Administration's rejection of California's request. New EPA Administrator Lisa Jackson signed the notice on Friday officially reopening the comment period on California's waiver request. Jackson said the Clean Air Act gives EPA the authority to allow California to adopt its own emissions standards for motor vehicles due to the seriousness of the state's air pollution challenges. However, automobile manufacturers prefer a single, uniform standard, as opposed to different standards in different states or regions.
The Clean Air Act Section 209 – State Standards states that the waiver should be granted unless the EPA finds that California:
- was arbitrary and capricious in its finding that its standards are in the aggregate at least as protective of public health and welfare as applicable federal standards;
- does not need such standards to meet compelling and extraordinary conditions; or
- has proposed standards not consistent with Section 202(a) of the Clean Air Act.
The public comment period on the waiver request will last 60 days and will close on April 6, 2009. There also will be a public hearing on March 5 held by EPA.
Georgetown Law professor forecasts "A Climate Agenda for the New President"
After yesterday’s two Presidential Memoranda regarding the Energy Independence and Security Act of 2007 and the State of California Request for Waiver Under 42 U.S.C. 7543(b), the Clean Air Act it seems like someone in the Administration must have gotten a hold of Lisa Heinzerling’s recent Michigan Law Review commentary: A Climate Agenda for the New President. While encouraging the Obama administration to review and, where there is legal and scientific support, undo Bush Administration environmental policies, Heinzerling, a professor at Georgetown Law and Faculty Director of their Climate Resource Center, suggested an early focus on climate change: “the first order of business is to take action on climate change—the defining environmental issue of our time, and one for which the window of effective action is rapidly closing.”
The Presidential Memorandum regarding the California Waiver Request directed the new Administrator of EPA to assess whether EPA properly denied a waiver of federal preemption for California’s motor vehicle standards concerning greenhouse gas emissions. The Memorandum notes that “For decades, the EPA has granted the State of California such waivers.” The Memorandum directed the EPA Administrator to “assess whether the EPA's decision to deny a waiver based on California's application was appropriate in light of the Clean Air Act” and, “based on that assessment,” to “initiate any appropriate action.” The Memorandum comes on the heels of a January 21, 2009, letter from Mary Nichols, Chair of the California Air Resources Board (CARB), asking EPA to reconsider the denial of CARB’s waiver request.
Professor Heinzerling’s commentary encouraged the EPA to reverse course on the California waiver and return to its “decades-long policy, supported by explicit statutory language, of looking at California’s standards ‘in the aggregate’ when deciding whether the conditions for a waiver are met.”
Professor Heinzerling also offered a roadmap for administrative u-turns, noting that “an agency proposing a change in policy must explain its decision and draw a rational connection between the facts it has found and the decision it has made.” The Presidential Memorandum concerning EISA, in which the President encouraged the Administrator of NHTSA to speed the development of higher fuel economy standards, appears designed to develop support for a change of course. The Memorandum states:
(a) in order to comply with the EISA requirement that fuel economy increases begin with model year 2011, you take all measures consistent with law, and in coordination with the Environmental Protection Agency, to publish in the Federal Register by March 30, 2009, a final rule prescribing increased fuel economy for model year 2011;
(b) before promulgating a final rule concerning model years after model year 2011, you consider the appropriate legal factors under the EISA, the comments filed in response to the Notice of Proposed Rulemaking, the relevant technological and scientific considerations, and to the extent feasible, the forthcoming report by the National Academy of Sciences mandated under section 107 of EISA; and
(c) in adopting the final rules in paragraphs (a) and (b) above, you consider whether any provisions regarding preemption are consistent with the EISA, the Supreme Court's decision in Massachusetts v. EPA and other relevant provisions of law and the policies underlying them.
In deciding whether this a case of a prescient professor, or simply an administration that shares a similar focus on climate and the administrative path to new climate policies, consider that Professor Heinzerling doesn’t just write commentaries for a living. She was the lead author of Massachusetts’ and other petitioners’ winning briefs in Massachusetts v. EPA, in which the Supreme Court recognized that the Clean Air Act gives EPA the authority to regulate greenhouse gases.
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.
