In July of this year, California and four major automakers, BMW, Ford, Honda, and Volkswagon, reached an agreement over a framework for setting Corporate Average Fuel Economy (CAFE) standards and vehicle greenhouse gas (GHG) emissions standards through the year 2026.
The framework was announced in anticipation of a Trump administration rollback of federal emissions standards set during the Obama administration.
The Obama-era standards require an average mileage of 54.5 miles per gallon for passenger vehicles by 2025, along with a year-over-year 4.7 percent reduction of greenhouse gas (GHG) emissions through 2025.
The rollback proposed by the Trump administration freezes model year 2020 CAFE and carbon dioxide emissions standards for passenger cars and light trucks through the year 2026.
The framework developed by California and the four automakers eases the Obama-era standards slightly, but rejects the freeze of the proposed rollback. The framework would drop average mileage standards from 54.5 by 2025 to 51 by 2026, and loosen GHG reduction standards from 4.7 percent over four years to 3.7 percent over five years
How California Sets Its Own Standards
The Clean Air Act provides the State of California with the right to waive federal preemption regarding air pollution standards for vehicle emissions. This waiver allows California to set stricter air emissions standards than the federal government. The waiver, however, must be approved by the Environmental Protection Agency (EPA).
Under Clean Air Act Section 209, the EPA is required to grant California a waiver unless they find 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;
- California does not need such standards to meet compelling and extraordinary conditions; or
- such standards and accompanying enforcement procedures are not consistent with Section202(a) of the Clean Air Act.
The Administration’s Reaction
Following the announcement of the framework, the Trump administration began pushing back against California and the four automakers through several actions:
September 6, 2019: DOT and EPA Write Letter to CARB Stating that the Framework May be Illegal
On September 6, the Department of Transportation (DOT) and the EPA wrote a letter to the California Air Resources Board (CARB), the state agency responsible for filing the waiver request with EPA. The letter states that the framework agreement between California and the automakers “appears to be inconsistent with Federal law.”
September 6, 2019: DOJ Opens Anti-Trust Probe Against Automakers
Also on September 6, it was reported that the Department of Justice would be opening an anti-trust probe to determine if the four automakers involved in the framework had acted lawfully.
September 19, 2019: EPA and NHTSA Announce One National Program Rule on Federal Preemption of State Fuel Economy Standards
On September 19, the DOT’s National Highway Traffic Safety Administration (NHTSA) and the EPA issued a final action establishing the One National Program rule that would ensure that the federal government sets one single fuel efficiency standard for the country. Along with this rule, EPA withdrew California’s Clean Air Act waiver that authorized the state to determine its own emissions standards.
September 24, 2019: EPA Threatens to Block California Highway Funding
On September 24, EPA Administrator Andrew Wheeler issued a letter to CARB Chair Mary Nichols warning that the state’s violation of Clean Air Act regulations could affect it’s highway funding. The letter notes that California has “failed to carry out its most basic tasks under the Clean Air Act” and has a backlog of 130 State Implementation Plans (SIPs), the plans which have to be developed to increase air quality for areas failing to attain National Ambient Air Quality Standards (NAAQS). The letter further states that if California does not work with the EPA to develop approvable SIPs, the EPA will begin a disapproval process which could result in a stoppage of DOT approvals for highway projects.
September 20, 2019: California Files Lawsuit Along With 22 Other States
On September 20, California, along with 22 other states and the District of Columbia, filed a lawsuit against the NHTSA, the DOT division which withdrew California’s Clean Air Act waiver. According to the filing, the action “exceeds NHTSA’s authority, contravenes Congressional intent, and is arbitrary and capricious.”
Significance for Regions
The repeal of California’s emissions standards waiver is federal preemption of the state’s authority to regulate vehicle emissions. Recent increases in federal preemption of state and local authority are a serious concern for local governments which need the authority to make decisions based on their region’s needs. The precedent that this exercise of preemption could set is notable and worrying.
Air-Quality – Non-attainment Consequences
Many regional councils function as air-quality planners. In this role, they work to maintain NAAQS in their regions. Repealing California’s waiver and setting lower national emissions standards will result in increased emissions. This could make NAAQS more challenging for regions to attain and sustain.
NAAQS non-attainment can result in sanctions from the EPA, which affect approval of highway projects. (for an example of this, see the section titled “EPA Threatens to Block California Highway Funding” above).
Air-Quality – Public Health
Additionally, and critically, poor air quality presents a variety of direct threats to the health of a region’s residents, including serious heart and breathing problems.
“Greenhouse gases trap heat and make the planet warmer,” according to the EPA’s Sources of Greenhouse Gas Emissions webpage. Furthermore, the EPA identifies the transportation sector as the primary source of greenhouse gas emissions. In 2017, transportation accounted for 28.9% of overall U.S. greenhouse gas emissions. Within the transportation sector, passenger cars and light-duty trucks comprise the largest portion of emissions.
Increased global temperatures present many threats to the health and well-being of residents of regions across the United States. Consequently, the drivers of warming, like GHG emissions, should be mitigated. The EPA identifies several methods for accomplishing this. Among the primary methods, the EPA includes “improving fuel efficiency with advanced design, materials, and technologies,” a strategy that is supported by increasingly stringent standards, such as those included in California’s framework.
 As ENO Transportation reports, the letter cites a section of the Clean Air Amendments of 1990 which allows for the cutoff of highway project approval, but not the cutoff of actual funding. The state or region would still be able use funds for highway safety projects of mass transit projects.
 In this case, it should be noted that California’s proposed standards would be more stringent than those set by the federal government.