California Vows Fight as Trump Takes Aim at Clean-Car Authority
(Bloomberg) -- President Donald Trump said he will revoke California’s authority to regulate greenhouse gas emissions from autos, his latest clash with the state that threatens to plunge the auto industry into protracted legal uncertainty.
“This is the fight of a lifetime for us. We have to win this and I believe we will,” California Air Resources Board Chairman Mary Nichols said during a defiant press conference after Trump’s announcement Wednesday.
Trump’s decision, announced on Twitter, adds to his long-running disputes with liberal California. As he began a two-day fundraising trip in the state Tuesday, Trump derided its homeless crisis while calling out the “tremendous taxes” its property owners pay. That comes on top of his criticism of the state’s management of immigration, forest fires and water policy.
California, a heavily Democratic state that’s home to one in eight Americans, has filed more than 50 lawsuits and other protests over the president’s actions.
Taking away California’s clean-car authority upends fuel-economy rules negotiated with the auto industry by President Barack Obama. Trump said his administration’s replacement efficiency standards, which are being finalized by federal agencies for cars built after 2020, will lead to greater vehicle production by reducing the cost of new vehicles.
“Many more cars will be produced under the new and uniform standard, meaning significantly more JOBS, JOBS, JOBS! Automakers should seize this opportunity because without this alternative to California, you will be out of business,” Trump said in a tweet.
Legal experts said the Trump administration may have a tough time defending a suit. A waiver has never been revoked in the 50-year-history of the Clean Air Act, said Julia Stein, a University of California at Los Angeles environmental law expert.
“Ironically, even though the administration insists that it will be creating ‘one national standard’ by revoking California’s waiver, it will actually be doing the opposite,” Stein wrote in a blog post Thursday.
California officials including Governor Gavin Newsom and Attorney General Xavier Becerra said in a press conference that the state has received roughly 100 waivers to combat air pollution and they would defend the one underpinning its vehicle rules.
“This is such a pivotal moment in the history of climate change,” Newsom said, citing statistics on the role of transportation in greenhouse gas emissions. “This is our legacy moment.”
With some 35 million vehicles in the state, and the transportation sector’s role as the top contributor of greenhouse gas emissions, Becerra said California’s ability to combat vehicle greenhouse gas emissions is critical to the state’s clean-air goals.
“Our message to those who claim to support states rights: don’t trample on ours,” Becerra said. “Doing so would be an attempt to undo the progress we’ve made over the past decades.”
Under Trump’s plan, the Environmental Protection Agency will revoke the so-called waiver underpinning the state’s ability to set tailpipe greenhouse-gas emissions standards that are more stringent, as well as the state’s electric vehicle sales mandate. The Transportation Department meanwhile will assert that the California rules are preempted by federal fuel-economy standards administered by the National Highway Traffic Safety Administration.
EPA Administrator Andrew Wheeler and Transportation Secretary Elaine Chao have a “major policy announcement” planned at the EPA’s headquarters Thursday morning, the agency said in a statement following Trump’s tweet.
Dave Schwietert, interim president of the Alliance of Automobile Manufacturers, said the group will review the action and the still-pending federal emissions and fuel-economy standards for 2021 to 2026 to evaluate how they effect its member companies, employees and consumers.
Predictable emissions and fuel economy standards are vital for automakers because as they plan production and model offerings several years in the future.
“Automakers support year-over-year increases in fuel economy standards that align with marketplace realities, and we support one national program as the best path to preserve good auto jobs, keep new vehicles affordable for more Americans and avoid a marketplace with different standards,” Schwietert said in a statement.
The move will shatter a nearly decade-long regulatory arrangement between NHTSA, EPA and the California Air Resources Board that has allowed automakers to satisfy fuel economy and efficiency standards administered by each agency with a single fleet of vehicles that can be sold nationwide.
“Our viewpoint is that we want one national fleet” standard for fuel economy and emissions, said Art St. Cyr, vice president of auto operations at American Honda Morot Co. “We don’t want to have a split fleet.”
Trump’s move “is bad for California and it’s bad for the country,” said California Democratic Senator Dianne Feinstein. “Revoking California’s authority will lead not only to more pollution, it will cost consumers billions of dollars a year in increased fuel consumption.”
The Trump administration in August 2018 proposed stripping California’s authority as part of its broader plan to slash federal emissions and fuel-economy requirements enacted by the Obama administration.
The plan initially recommended capping requirements after 2020 at a 37 mile-per-gallon fleet average, instead of rising each year to roughly 50 mpg. U.S. officials have since signaled that the final rule may require small annual improvements, but at levels far less than required under the current standards. Separating the attack on California’s authority allows that piece of the rule to proceed while federal agencies continue to finalize the new replacement requirements.
CARB announced in July an accord with the Ford Motor Co., Honda Motor Co., BMW AG and Volkswagen AG on compromise tailpipe greenhouse gas emissions regulations, drawing Trump’s ire.
The carmakers agreed with the state’s clean-air regulator to boost the fuel efficiency of autos sold in the U.S through 2026.
Earlier this month, Trump’s Justice Department opened an antitrust probe into the deal.
Free-market groups that have been pushing the administration to roll back the standard cheered the move while environmentalists decried it.
“Withdrawing the California waiver is great news for car buyers and drivers. The rapid increase in new car prices should slow down, which means more people will be able to afford to buy a new car,” said Myron Ebell, a director at the Competitive Enterprise Institute, who is one of the main proponents of revoking California’s waiver. “The decision also restores our federalist system. With the waiver, California was for practical purposes put in charge of deciding what kinds of cars people across the nation can buy.”
Paul Cort, an attorney for the environmental group Earthjustice, said “It’s bad enough the administration won’t take any meaningful action to clean our air or fight the warming climate that threatens us all; now they want to prevent California and other states from filling that gap.”
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