California, Trump Administration on Collision Course Over Auto Rules

Source: By Jennifer A Dlouhy, Bloomberg • Posted: Thursday, March 15, 2018

California and the Trump administration are on a collision course over auto-efficiency regulations that could lead the White House to deploy the nuclear option: revoking the state’s cherished power to set its own limits on air pollution.

Environmental Protection Agency Administrator Scott Pruitt signaled he would keep California in check as the federal government reviews fuel-economy rules. He said the state — where automakers sell more vehicles than anywhere else in the country — shouldn’t be allowed to play an outsize role in the process.

“Federalism is not one state dictating to the rest of the country what should occur,” Pruitt said. While California can regulate greenhouse gas emissions at the state level, “that shouldn’t and can’t dictate to the rest of the country what these levels are going to be.”

Pruitt’s comments come a week after the U.S. Justice Department sued California, escalating a conflict over the Trump administration’s crackdown on undocumented immigration. President Trump on Tuesday used his first trip to California as president to rail against the state’s resistance to federal immigration laws, saying in a tweet that the “sanctuary policies are illegal and unconstitutional.”

Pruitt didn’t directly answer whether he would seek to revoke the state’s waiver allowing it to set its own air-pollution requirements, though some conservatives are encouraging him to do that. Such a move would be an attack on California’s historically influential role as a pacesetter on environmental regulation. California — faced with the country’s worst smog — has been writing its own clean-air rules since 1970.

Congress enshrined the state’s authority to set pollution standards that are tougher than those of the federal government in the Clean Air Act five decades ago, handing the EPA only limited power to say no.

The EPA has only done that once — in 2007, when the Bush administration denied a California request to impose its own greenhouse-gas emissions limits on automobiles. The move prompted an immediate lawsuit by California and more than a dozen other states, and the denial was eventually reversed by the Obama administration.

“I cannot imagine a smarter political fight to pick,” said Virginia-based Republican strategist Mike McKenna. “The very last thing you want to do is have Sacramento make decisions that affect everybody in the country. Who should make this decision — you or some obscure bureaucrat in Sacramento?”

Environmental Defense Fund general counsel Vickie Patton warned that the Trump administration would be picking a fight with Americans throughout the country.

“For half a century, our nation’s clean air laws have recognized California’s bedrock authority to protect human health and the environment from cars, the single largest source of health harming pollution in California,” Patton said. “It is paradoxical and flatly wrong as a matter of law that EPA head Scott Pruitt would stand in the way of a state’s vital protections for the health of millions.”

The waiver issue looms large in negotiations over the future of the vehicle-efficiency standards. The EPA faces an April 1 deadline to decide whether Obama-era greenhouse gas standards for cars and light trucks from 2022 to 2025 are attainable or should be revised.

Automakers cried foul when the EPA concluded no changes were needed during the final weeks former President Barack Obama was in office — cutting off a review more than a year ahead of schedule. Carmakers lobbied the Trump administration to reinstate that review.

To some degree, that was a gamble: Automakers don’t want to end up having to comply with one standard set by the federal government and another in the nation’s most populous state.

‘Consistent Approach’

“There are benefits to a consistent national approach to regulating greenhouse gas and fuel economy standards,” the Association of Global Automakers said in a statement. The Washington-based trade group represents foreign-based companies including Japan’s Toyota Motor Corp. and South Korea’s Hyundai Motor Co.

If California chooses to stay the course and the federal government loosens its regulations, automakers would to some degree have to manufacture to the state’s standard because of the size of its market and the international trend toward tougher emissions requirements. California also has heft far beyond its borders; New York, Washington and several other states that account for about a third of U.S. vehicle sales have adopted California’s standards.

“We absolutely need advanced clean cars, including electric vehicles, to meet California’s challenging air quality challenges and climate goals,” said Stanley Young, a spokesman for the California Air Resources Board.

California Treasurer John Chiang said Tuesday that the state won’t back away from its commitment to reduce auto emissions.

“With a president in the White House who ignores science and doesn’t believe in climate change, it’s no surprise that Administrator Pruitt would reject calls to push for bold and ambitious vehicle emission standards. Given what’s at stake, we need to double down on our commitment to fight climate change and improve air quality,” Chiang, a Democrat who is running to replace Jerry Brown as California governor, said in an email.

Brown responded to Trump’s criticism of California on Tuesday by pointing out in a tweet that the state’s economy is sixth-largest in the world and the most prosperous in the U.S. Through a spokesman, Brown declined to comment on Pruitt’s remarks.

‘Everybody Wins’

Representative Debbie Dingell, a Democrat from Michigan whose district includes Ford Motor Co. assembly plants, warned against “a political showdown” over the issue.

“California cares about emissions, Michigan cares about emissions, and so do 48 other states,” Dingell said in an emailed statement. “Everybody wins if we work together. Everybody loses if we don’t.”

But conservative, free-market leaders are encouraging the Trump administration to upend the program.

Lou Pugliaresi, president of the nonprofit Energy Policy Research Foundation Inc., said it’s elitist of Californians to mandate electric-car sales. Pugliaresi said he expects Trump to articulate this view ahead of the November congressional elections.

“Just think what Midwestern Senate Democrats will do when Trump starts tweeting, ‘Nancy Pelosi and Chuck Schumer want to tell you what cars to drive,’” Pugliaresi said.

In recent weeks, Pugliaresi said he’s met with automakers and oil refiners to explore the efficacy of arguments against the California standards.

Taking Aim

An associated Washington advocacy group, Baron Public Affairs LLC, lays out potential strategies the Trump administration and congressional Republicans could use to take aim at California’s electric vehicle requirement.

Under the Baron game plan, the administration could argue that the Transportation Department’s responsibility to regulate fuel economy preempts California’s authority to require automakers to sell zero-emission vehicles in the state. Alternatively, congressional Republicans could tack a legislative rider onto a federal spending bill stripping away any individual state’s prerogative to regulate tailpipe emissions.

Undoing a waiver would be would be legally fraught; the Clean Air Act doesn’t explicitly provide a mechanism for EPA to revoke a waiver.

It would put “a really significant proportion of U.S. residents at risk and basically take away their right to plan for climate pollution into the future,” said Irene Gutierrez, an attorney in the Natural Resources Defense Council’s energy and transportation program. “Given how much Pruitt likes states’ rights in other contexts, it’s interesting that he’s not in favor of California’s rights here.”

— With assistance by Mark Chediak