By Leslie Z. Walker

More than three years after the State’s initial request, the United States Environmental Protection Agency (“US EPA”) granted California’s request for a waiver to allow the state to enforce its greenhouse gas (“GHG”) emission standards for new motor vehicles.  The waiver, coincidentally granted as the nation’s largest automaker works its way through bankruptcy court, allows the regulations developed by the California Air Resources Board (“CARB”) in response to Assembly Bill 1493 (Chapter 200, Statutes 2002) to take effect.  The regulations add four GHGs to California’s existing regulations and phase in emission standards for those gases.

The standards are expected to increase the cost of vehicle production from between $20 per vehicle, to $1,060 per vehicle, depending on the vehicle type and implementation level. [1]

Clean Air Act

Under the Clean Air Act (42 USC § 7401 et seq.), the US EPA sets nationwide emissions standards for new motor vehicles. States are prohibited from passing their own vehicle emission standards unless the State had adopted standards for the control of emissions from new motor vehicles prior to March 30, 1966, and the state determines that the state standards will be, in the aggregate, at least as protective of public health and welfare as applicable Federal standards.  (Section 209(b), (42 USC. § 7543(b)(1).)  California set emission standards prior to 1966 and therefore is allowed to adopt its own standards for new motor vehicles if the Administrator of the US EPA, based on criteria set out in the statute, waives the general statutory prohibition on State adoption or enforcement of emissions standards.  The state waiver request must meet minimum criteria to be granted.[2]

Assembly Bill 1493

Assembly Bill 1493 (Pavley) (Chapter 200, Statutes 2002), was signed into law in 2002.  The law directs CARB to adopt regulations requiring carmakers to reduce GHG emissions from new passenger cars and light trucks beginning in 2009.  Pursuant to the legislation, CARB issued regulations requiring annual reductions in average GHG emissions for new vehicles beginning with the 2009 model year and phased in gradually over eight years.  In December 2005, California requested that US EPA grant a waiver of preemption under Section 209(b) [3] which would allow California to implement the GHG emissions regulations.  US EPA deferred action on the waiver request pending the outcome of the US Supreme Court in Massachusetts v. EPA (2007)549 US 497.

In Massachusetts v. EPA (2007)549 US 497, decided on April 2, 2007, the US Supreme Court ruled that the Clean Air Act did in fact embrace federal regulation of GHG’s.  The case established that the US EPA has statutory authority to regulate GHG’s under the Clean Air Act, and that the agency cannot decline to do so.  But by November 2007, the US EPA still had not ruled on the waiver.  California Governor Arnold Schwarzenegger and Attorney General Edmund G. Brown Jr. therefore sued the US EPA to force action on the state’s waiver request, charging the US EPA with unreasonable delay in reaching a decision on California’s request.

Finally, on March 6, 2008, the US EPA denied the request, claiming California had not established the existence of compelling and extraordinary air quality conditions requiring more stringent regulation.  In January of 2009, President Barak Obama foreshadowed the June 2009 reversal, by directing the US EPA administrator to proceed with granting California a waiver to implement new motor vehicle emissions standards for cars sold in California, and on June 30, 2009, the administrator granted the waiver.

The waiver reverses the earlier denial.  Automakers will now be required to reduce GHG emissions from new car fleets sold in California beginning late this year.  By 2016, new vehicle fleet emissions must decline by one third.  Overall fleet fuel efficiency averages must be approximately 35.7 miles per gallon.  By 2020, fleet fuel efficiency averages must increase to 42.5 miles per gallon.  (13 CCR. § 1961.1)  Although the new regulations are expected to increase the cost of vehicles, ARB anticipates a net savings to vehicle owners over the life of the vehicle.[4]

Leslie Z. Walker is an associate at Abbott & Kindermann, LLP.  For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.

[1] California Environmental Protection Agency, Air Resources Board, Regulations to Control Greenhouse Gas Emissions From Motor Vehicles, Final Statement of Reason, August 4, 2005, pp.4-5.

[2] The criteria are: (a) that the determination of the State is Arbitrary and Capricious; or (b) the State does not need such State standards to meet compelling and extraordinary conditions; or (c) such State standards and accompanying enforcement procedures are not consistent with section 202(a) of the Act. (Section 209(b)(1).

[3] ARB Letter to EPA Administrator Johnson dated December 21, 2005.

[4] California Environmental Protection Agency, Air Resources Board, Regulations to Control Greenhouse Gas Emissions From Motor Vehicles, Final Statement of Reason, August 4, 2005, pp.4-5.