Will EPA Trump California's Clean Air Act Waiver?

The Trump Administration is seeking to roll back federal automotive fuel economy standards and prevent California from maintaining more stringent standards of its own.

Last week, the Department of Transportation and Environmental Protection Agency announced plans to roll back one of the Obama Administration's most significant climate change policies. Specifically, the Administration is proposing to freeze automotive fuel economy and greenhouse gas emission control requirements, setting aside Obama rules that would have imposed stringent requirements through 2025. At the same time, the administration is proposing to deny California's authority under the Clean Air Act to adopt its own more stringent requirements, refusing a waiver under the Clean Air Act and claiming preemption under the Energy Policy and Conservation Act. Under this proposal, not only would California be precluded from adopting more stringent greenhouse gas emission standards, it would be prohibited from maintaining its longstanding Zero Emission Vehicle (ZEV) requirements, even though these standards have been used to help the Golden State control address more traditional pollution concerns.

The Trump Administration proposal raises some interesting legal and policy issues. I have a summary and brief analysis over at NRO.

On the legal front, the Trump Adminsitration can make a reasonable case that California is not eligible for a Clean Air Act waiver for greenhouse gas emission controls. In short, this is because the relevant waiver criteria were crafted to enable California to address the state's longstanding and particularly severe urban air pollution problems. Greenhouse gas emissions, however, present different considerations because their effects are not localized in the same way. Thus it is not clear California can show that it needs such standards to control in-state air pollution, as the relevant CAA provisions require. For those interested, my article Hothouse Flowers: The Virtues and Vices of Climate Federalism goes into the legal and policy issues in greater depth.

The Trump Administration is on weaker ground insofar as it seeks to prevent California from requiring automakers to sell Zero Emission Vehicles (ZEVs, i.e. electric cars) in the state. While ZEVs reduce greenhouse gas emissions, they reduce emissions of traditional pollutants as well. Thus this requirement fits more comfortably into the relevant CAA criteria. For the same reasons, I think it is difficult to argue that the ZEV requirements are preempted under the EPCA as standards "related to" fuel economy too.

This Trump proposal also raises questionsa about the role of states in developing and implementing environmental policy. While the Trump Administration has proclaimed its support for "cooperative federalism," this proposed rule could significantly limit the ability of states to pursue their own environmental priorities, at least in the context of climate change.

From my NRO piece:

Allowing different jurisdictions to adopt different rules may well impose costs on nationwide firms, but that's a cost of doing business in a diverse compound public. The reality is that California has different environmental problems and different environmental preferences from other states. Just as California should not be able to impose its preferences on the rest of the nation, it should not be prevented from adopting the rules California voters are willing to accept — and if automakers were willing to let California consumers bear the costs of their state's own policies, that might temper their environmental appetites.

If there is a problem in federal environmental law, it is not that California is given too much autonomy to adopt its own environmental rules, but that other states are given too little. If anything, the CAA waiver provisions are too narrow, insofar as they apply only to one specific regulatory program within the broader federal regulatory monolith. A broader waiver provision that gave states more leeway to experiment with alternative approaches to environmental protection across the board would do more to encourage regulatory innovation and defuse political conflicts.

Alas, the Trump administration does not appear particularly interested in regulatory federalism when it comes to environmental protection. That is a missed opportunity. In its zeal to reduce regulatory burdens across the board, the Trump administration is inviting legal trouble and missing opportunities to make the case for broader reforms. California's waiver should not be the end of state-level environmental innovation. It should be the beginning.