California Can’t Go Its Own Way

Source: By The Editorial Board, Wall Street Journal • Posted: Thursday, September 19, 2019

Trump’s fuel policy intervention is right on policy and the law.

California attorney general Xavier Becerra (R) speaks as California Gov. Gavin Newsom (L) looks on during a news conference at the California justice department in Sacramento, Sept. 18.Photo: Justin Sullivan/Getty Images

If you haven’t heard, President Trump has declared war on California, the auto industry and the world’s climate. Or that’s what liberals are saying about his Administration’s plans to revoke California’s waiver that lets it set national fuel economy rules that raise costs for consumers across the country.

Mr. Trump trolled California progressives during a visit to the Golden State on Wednesday by tweeting that his Administration would yank California’s Clean Air Act waiver. The Environmental Protection Agency last year foreshadowed its plans to do so when it proposed relaxing the Obama -era corporate average fuel economy (Cafe) standards.

The 1970 Clean Air Act prohibits states from regulating tailpipe emissions, but it allows California to request a waiver to “meet compelling and extraordinary conditions.” This waiver authority was intended to help California reduce tailpipe pollutants such as NOx and sulphur that contribute to smog. The LA haze in those days could be as thick as San Francisco’s fog.

Yet the Obama Administration in 2009 issued California a waiver to regulate greenhouse gas emissions despite the lack of legal or environmental justification. The Energy Policy and Conservation Act pre-empts state regulations of fuel economy, and CO2 emissions don’t cause smog. CO2 wasn’t even considered a pollutant until the Supreme Court’s Massachusetts v. EPA (2007) decision.

The Trump Administration now has strong economic, regulatory and constitutional reasons to revoke the waiver. California has used its waiver to impose electric car quotas that will raise costs for consumers across the country. Manufacturing an electric car costs $12,000 more than an equivalent gas-powered vehicle. Despite generous federal and state consumer subsidies, auto makers will probably have to sell EVs below cost in California and raise prices on gas-powered cars everywhere else.

The state’s EV mandate doesn’t even account for all CO2 emissions since it awards more credit for longer-range batteries, even though they require more energy (and fossil fuels) to manufacture. A Tesla Model S, for instance, receives almost twice as much regulatory credit as a Nissan Leaf. It also provides credit for hydrogen fuel-cell vehicles that derive energy mostly from natural gas. This scheme encourages regulatory arbitrage.

Fair-weather liberal federalists are complaining that the Trump Administration is running over states’ rights. Yet the Commerce Clause prohibits states from burdening interstate commerce, and the California rules discriminate against consumers in other states. If California’s waiver is allowed to stand, its rules would become the de facto national standard.

Auto makers want regulatory certainty and have urged the Trump Administration to compromise with California to avoid a prolonged legal brawl. But California progressives as usual want it their way or the highway. As Gov. Gavin Newsom declared, “California will prevail because we’re leaders in this space.”

California intends to sue to enforce its own rules, and the Supreme Court may have an opportunity to consider the case before the end of President Trump’s term. If that happens, the Justices might also consider setting guardrails on Massachusetts v. EPA, which liberals have invoked to demand climate regulation not authorized by Congress.

Most auto makers are already increasing investment in electric cars to comply with regulations in China and Europe. The Trump Administration isn’t prohibiting them from manufacturing more fuel-efficient and electric cars. Liberals call the President a totalitarian, but he’s the one giving consumers and businesses a choice.