HLS Professor Jody Freeman examines what's at stake with recent rollbacks
By Jody Freeman, professor at Harvard Law School and President Barack Obama's counselor for energy and climate change in 2009-10
Los Angeles — The Environmental Protection Agency and Department of Transportation moved Thursday to fulfill President Trump's promise to undo landmark Obama-era rules requiring automakers to steadily reduce greenhouse gas pollution from cars and trucks and improve fuel efficiency through 2025.
Transportation is the largest source of greenhouse gas emissions in the United States, with the biggest share coming from cars and trucks. Yet the government now plans to freeze fuel economy and greenhouse gas standards indefinitely at levels set for 2020, thwarting progress on addressing climate change.
To make sure it accomplishes that goal, the Trump administration also wants to strip California of its authority to set stricter greenhouse gas standards for vehicles sold within its borders, which the state is authorized to do under a longstanding provision of the Clean Air Act.
California and about a dozen other states that follow its lead — and which together comprise over a third of the nation's auto market — have vowed to implement their own greenhouse gas standards if the administration jettisons the federal ones. So a major legal battle looms that will do exactly what the auto industry doesn't want — which is to create regulatory uncertainty as it plans future models.
Though the E.P.A. approved California's greenhouse gas standards in 2013, the agency now argues that they impermissibly conflict with another federal law, the Energy Policy Conservation Act. That law, passed in 1975 in response to the energy crisis, gives the Transportation Department the sole power to set standards "relating to fuel economy." Because auto companies comply with California's greenhouse gas standards primarily by improving fuel efficiency, the E.P.A. now says in an about-face that the standards are pre-empted by those Transportation Department regulations. On the same theory, California's program to promote electric and hybrid vehicles would also be eliminated.
If the Trump administration succeeds in scuttling the federal standards and neutralizing California, it could be the most significant setback for American progress on climate change so far under President Trump. Worse, this disastrous policy could continue well beyond his tenure. Future presidents could not simply undo the decision, if courts rule that the Trump administration's interpretation of the law is categorically correct. In that case only Congress could restore California's authority.
Here is what is at stake: The Obama-era standards that President Trump seeks to scrap would gradually raise average fuel economy under test conditions from about 37 miles per gallon in 2020 to 50 miles per gallon in 2025 — a near-doubling of fuel efficiency and halving of greenhouse gas emissions since 2010. This would reduce American oil consumption by 1.2 billion barrels, cut half a billion metric tons of carbon pollution and save consumers billions of dollars in fuel costs, according to the E.P. A's own recent estimates.
For over 50 years, California has been the undisputed leader among the states in addressing air pollution and its harms. In the 1950s and 1960s, the state had some of the dirtiest air in the world, in large part because of vehicular pollution. California required auto companies to install the first pollution control technology in 1961, and set the nation's first tailpipe standards for emissions in 1966. In 1967, Governor Ronald Reagan signed legislation creating the powerful California Air Resources Board to regulate air pollution statewide, including by strictly curbing vehicle emissions.
Congress recognized California's leadership when it passed the Air Quality Act of 1967, allowing the state to set its own stricter-than federal standards for vehicles. Congress cemented this approach in the 1970 Clean Air Act, and reinforced it again in 1977, letting other states adopt California's standards.
Under this longstanding authority, California has received dozens of waivers from the E.P.A. in both Republican and Democratic administrations to pursue pioneering policies that have spurred technological innovation to make cars and trucks cleaner. The benefits have been enormous.
California's early standards helped to propel widespread adoption of the catalytic converter, which transforms harmful tailpipe pollutants into harmless gases. The modern vehicle engine, which is more efficient, more powerful and more durable, is a direct result of innovations driven by California's emission standards. Keeping pace with California also helps the auto industry to stay globally competitive.
California does not dictate national standards, since auto companies are free to make higher-polluting vehicles for the rest of the country. But automakers prefer to avoid the manufacturing complications of meeting more than one standard, which gives California leverage.
That is why, in the deal brokered by the Obama administration to harmonize greenhouse gas and fuel efficiency standards into a single national program, California agreed not to implement its own tougher rules in exchange for steadily increasing federal targets. Now that the Trump administration plans to unravel that deal, California says it will move ahead with its own greenhouse gas standards, with those dozen-plus other states poised to follow.
Will the Trump administration succeed? When the auto industry made the same argument in 2007 to block California's rules, two federal district courts in different states rejected it. The Supreme Court itself has said that pollution standards set under the Clean Air Act to protect public health can coexist with fuel efficiency standards. And decades of legal precedent suggest that courts are reluctant to pre-empt state power, if they can avoid doing so.
The most unstable scenario of all would be a ruling letting the Trump administration pre-empt California for now, but leaving future administrations free to reverse course. In that case, auto companies would sometimes have to meet California's standards and sometimes not.
The auto industry should convince the Trump administration to reach a deal, or make one on its own. A workable solution would leave the current federal standards in place while making it easier for industry to meet them, by rewarding companies for investing in advanced technologies like electric, hybrid and autonomous vehicles, tinted windows, efficient lighting and the like.
These and other pragmatic fixes would respond to the auto companies' core complaints about needing flexibility, continue the long-term trajectory toward cleaner cars, and preserve the national program, all without sacrificing California's traditional role.