California Says a Car-Emissions Deal With Trump Could Be Doable

(Bloomberg) -- California’s top air-quality regulator sees hope for a deal with the Trump administration over fuel economy and emissions standards -- so long as Washington doesn’t try to steamroll the state.

Federal agencies have yet to translate their disdain for regulations into concrete proposals to roll back Obama-era rules intended to curb tailpipe emissions, meaning there’s still a chance for a consensus to emerge, according to Mary Nichols, the chair of the California Air Resources Board.

“Reason could prevail,” Nichols said Tuesday at Bloomberg New Energy Finance’s Future of Energy Summit in New York. “There’s a way to get to success, unless your goal is to roll over California and not allow us to have any standards.”

The future of mileage and emissions standards is only the latest hot-button, high-profile issue to put President Donald Trump on a collision course with America’s most populous state. As California jousts with the federal government over immigration and taxes, the fuel economy battle has significant implications for curbing pollution because of the contribution cars make to dirtying the air.

Sticking to Goals

Nichols said she’s open to adjusting California’s regulations to make them easier for automakers to manage in a way that doesn’t abandon the state’s overall emissions-reduction goals. Rules agreed to by carmakers, California, the U.S. Environmental Protection Agency and the National Highway Traffic Safety Administration in 2011 aim to boost fuel economy to more than 50 miles per gallon by 2025, or roughly 36 miles per gallon in real-world driving.

Future changes could include granting automakers additional pollution credits for putting fleets of electric vehicles on the road that encourage car sharing, or not holding automakers responsible for the emissions of power plants that provide electricity for plug-in cars, Nichols said.

The Trump administration announced last week that emissions targets for cars and light trucks set by the Obama administration were too stringent and must be revised, beginning a process sought by the U.S. auto industry to pare anti-pollution targets.

Nichols said California officials are talking about taking legal action with other states that would challenge the administration’s decision and preserve its options. The agency would coordinate such a move with California’s attorney general and Governor Jerry Brown, Nichols said.

Sporadic Talks

California has for months held sporadic talks with officials from the White House, EPA and NHTSA about the future of the fuel economy rules, though they haven’t been formal negotiations, Nichols said. The state has been waiting for a proposal from the Trump administration.

Nichols said she expects the administration to present a range of possible options.

“They are not promising to do what we want,” she said. “What they are saying is, ‘We’re going to propose a range of options, and we want you to like one of them.’”

The White House didn’t immediately respond to a request for comment left after business hours.

An aggressive move by Trump’s administration to gut federal standards could lead to a messy legal battle, a patchwork of efficiency standards, or both. The friction has broader implications for carmakers because California’s rules are followed by 12 other states that collectively account for about a third of U.S. auto sales.

In January, Governor Jerry Brown announced plans to have 5 million zero-emission vehicles on California roads by 2030, up from a planned 1.5 million in 2025. The state has a legislative mandate to cut carbon dioxide emissions to 40 percent below 1990 levels by 2030.

To contact the reporters on this story: Mark Chediak in San Francisco at mchediak@bloomberg.net, Ryan Beene in Washington at rbeene@bloomberg.net, John Lippert in Chicago at jlippert@bloomberg.net.

To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Lynn Doan at ldoan6@bloomberg.net.

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