California car wars

Trump fires first shot in California car wars

By ALEX GUILLÉN

Donald Trump has declared an energy war on California.

The administration on Thursday proposed freezing the vehicle fuel efficiency standards sought by the Obama administration and moved to end California's power to enforce its own rules, setting off a legal fight that could create a schism among red and blue states over the pollution regulations for new cars and pickups.

Acting EPA Administrator Andrew Wheeler said in a statement the proposal aimed to strike a balance "that will enable more Americans to afford newer, safer vehicles that pollute less. More realistic standards can save lives while continuing to improve the environment."

But Democrats and U.S. automakers warned that forcing a conflict with California will create a split where states that follow California's lead will have tighter mileage requirements than the federal standard, creating a patchwork of regulations that will hamper the development of the next generation of cars and light trucks.

“This administration has, once again, ignored the obvious right answer and decided to listen to the most extreme voices as it pushes through a plan that no one is interested in — with the exception of the oil industry, perhaps,” Sen. Tom Carper (D-Del.) said in a statement.

Rolling back the rules will make American cars less competitive in a global market that is trending toward more efficient vehicles, he said.

The auto industry had initially urged President Donald Trump to revisit the standards for 2021-2025 vehicles that were set under former President Barack Obama, saying they wanted more flexibility in meeting the aggressive goals, such as earning credit for previous pollution emission reductions.

But as with Trump’s tariff and trade disputes, the companies worry that the White House is going too far and may hurt the auto industry more than help it. They have urged Trump officials to negotiate a deal with California that would keep in place one set of rules that apply to the entire country — or jeopardize one of the U.S.’ biggest industries.

“We are not asking the administration for a rollback,” Ford Chairman Bill Ford said at his company’s annual meeting in May, one day before automakers met with Trump. “We want California at the table, and we want one national standard that includes California, and we've been very clear on that.”

Breaking up the national program would lead to a “regulatory nightmare,” Alliance of Automobile Manufacturers President and CEO Mitch Bainwol told Congress in May. Experts aren’t entirely sure what a market with two standards might even look like, but it could involve making two different designs of vehicles or pricing cars differently depending on whether a state follows California or federal rules, both options that add significant uncertainty and bureaucracy.

Meanwhile, critics like Dan Becker, director of the Safe Climate Campaign at the nonprofit Center for Auto Safety, say car manufacturers are getting more than they bargained for.

“What they didn’t know is, when they asked Trump to help them start rolling these standards down the hill, that he would totally disconnect the brakes,” Becker said.

At the core of the conflict is California's unique authority under the Clean Air Act to enforce its own stricter standards — and provisions allowing other states to choose them instead of the federal rules. The Trump administration's proposal would revoke that waiver, and require California to defer to federal regulators.

Twelve states, mostly those in the Northeast and Pacific Northwest, along with D.C. already follow California’s more stringent standard, and Colorado will join them by the end of the year. Those states make up more than 40 percent of the U.S. new car market, and environmentalists are hoping to persuade more states to follow California if Trump torpedoes the federal rules.

Environmentalists, meanwhile, argue the rollbacks will erase a significant amount of the greenhouse gas savings achieved under the Obama plan, and make it harder for cities to clean up pollution in their air that causes illness and smog.

EPA and the California Air Resources Board have been in negotiations for months, and state regulators have said they would be willing to discuss the flexibility measures sought by automakers if EPA would commit to a new round of rulemaking increasing the standards through 2030. But the state would not back off its overall emissions targets, which are a key part of its effort to fight climate change and reduce pollution that chokes its cities with smog.

Today’s proposal is likely to end any serious discussions over a potential regulatory deal.

The proposal, a joint product from EPA and the National Highway Traffic Safety Administration, would freeze the Transportation Department-set fuel economy standards for model year 2021-2026 cars at 2020 levels. That in turn would have EPA roll back the Obama administration's carbon dioxide standards, which initially were projected to bring the fleet average to 54.5 miles per gallon. Instead, cars and light trucks would top out at an average 37 miles per gallon under the proposal.

NHTSA also contends that California cannot enforce its own more stringent standards, a regulatory move that will prompt EPA to revoke the waiver it issued California in 2013 allowing it to enforce its own rules.

The Trump administration may face an uphill battle in the eventual court case.

Two federal courts in 2007 upheld California's right to a waiver, rejecting the idea that NHTSA’s fuel economy standards preempt California’s ability to regulate greenhouse gas emissions. But the state and federal government negotiated a compromise to keep their rules in sync before those rulings could be appealed, and proponents of the Trump rollback see the legal question as still unsettled.

California is confident about its legal footing to defend its waiver, which lets the state enforce its own standards through 2025 if the federal government weakens its own. The Clean Air Act does not address whether the EPA has the authority to revoke waivers once granted, although it does not expressly forbid it either.

In addition, NHTSA argues that freezing the fuel economy standards will save 12,700 lives annually. The proposal argues that consumers are less likely to purchase newer, safer cars if efficiency rules increase the up-front costs; that people who do buy more efficient vehicles are likely to drive them more often; and that more fuel efficient cars are potentially less safe because they are typically smaller and lighter, making them less protective to passengers in a crash.

Advocates of more stringent standards note that traffic fatalities have not risen on par with the growth in vehicle miles traveled or population, indicating that cars are not necessarily becoming more dangerous as they become more fuel efficient.

In addition to fighting the Trump administration in court, California also is preparing regulatory actions to keep its more stringent rules in place.

The state’s Air Resources Board sought public comment this spring about potential regulatory language clarifying that only those cars that meet the Obama-set standards will be “deemed to comply” with California’s rules as well. A CARB spokesman told POLITICO the agency continues to work on a proposal.