CARB vs. the EPA: What the New Federal Emissions Standards Could Mean for the Country

By: Bridget Clerkin April 9, 2018
New EPA emissions standards threaten to strip California regulators of their ability to set miles per gallon targets for vehicles in their state.
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In a highly anticipated move last week, the Environmental Protection Agency (EPA) set off a series of unprecedented events which may lead to a legal showdown that could split the country’s automobile market in two.

The federal office declared that current greenhouse gas emissions standards were “not appropriate,” calling for a revision of the pollution benchmarks, which officials said were “too high” and too costly for automakers.

The edict not only sets into motion a process to create new fuel efficiency standards for cars and light trucks for model years 2022-2025, but also challenges a decades-old agreement letting California set its own emissions levels—which are, in turn, followed by a dozen other states.

Still, should it follow up on its legal threat, the federal agency could be tied up in court for years—well past the approach of those dates—with California Attorney General Xavier Becerra and a number of high-ranking officials in the Golden State and beyond promising to file suit if the EPA tries to revoke the agreement. Any resulting legal fallout would be the first of its kind and have the power to place the country’s most cherished domestic product at the center of a civil policy war whose consequences would be felt far beyond 2025.

Ground Rules

The process for setting future emissions standards began in 2012, when the Obama administration established the current levels.

Citing more than 1,200 pages of technical research, the previous decision called for automakers to nearly double the average fuel economy of their new cars and light trucks by 2025, to 54.5 miles per gallon. (New models are expected to meet fleet-wide average emissions levels of 40 mpg, a standard that will remain in effect through 2021.) Fully implemented, the Obama-era rules were predicted to increase the average overall fuel economy of American vehicles to 36 mpg—up from 24.7 in 2012—by 2025 and lower oil consumption by 12 billion barrels, while cutting carbon dioxide pollution by nearly 6 billion tons over the course of the lifetime of the affected vehicles.

Fully implemented, the Obama-era rules were predicted to increase the average overall fuel economy of American vehicles from 24.7 miles per gallon in 2012 to 36 mpg by 2025.

The official midterm evaluation of the proposal in January 2017 reaffirmed the numbers in one of the outgoing administration’s last decisions. Then-EPA head Gina McCarthy declared at the time that sufficient technological advancements along with a demand for more fuel-efficient vehicles, among other factors, pointed to a still-achievable timetable and even created an environment where automakers were “adopting fuel-efficient technologies at unprecedented rates.”

In his 38-page rebuke of those standards published April 2, EPA director Scott Pruitt argued that both the methods used to first derive them and the arguments later made to justify them were “optimistic or [had] significantly changed and thus no longer represent realistic assumptions.” (Among the questionable factors listed by the director were current fuel prices and unfavorable trends related to the electrification of vehicles.) Last summer, President Donald Trump granted the EPA permission to reassess the January evaluation—which Pruitt also argued was wrongfully rushed through. The idea almost immediately found itself at the center of a legal firestorm, but with the review now officially on the books, the clouds are only starting to gather.

Civil Disputes

EPA Administrator Scott Pruitt

Pruitt’s decision may have been widely expected, but it’s still managed to sow confusion, bringing into question legal boundaries that have gone unchallenged for 40 years.

In the EPA’s official statement on the move, the agency calls out a long-held federal waiver granted to California in the Clean Air Act of 1970, which allows the Golden State to set its own emissions standards.

The rule is now being reexamined, Pruitt said in the release, adding that “corporate federalism doesn’t mean that one state can dictate standards for the rest of the country,” and the “EPA will set a national standard for greenhouse gas emissions.” (The wholehearted embrace of a strong central government is new for Pruitt, who, as Attorney General of Oklahoma, sued the EPA 14 times over what he believed to be federal overreach.)

If the agency pushes to revoke the waiver, it would mark the first time any administration has ever challenged the state’s authority or that of the California Air Resources Board (CARB), the department tasked with creating and enforcing emissions rules there. (In fact, CARB is typically asked to weigh in on any rule changes regarding emissions, along with the National Highway Traffic Safety Administration.)

Reached for comment in the immediate aftermath of the announcement, CARB representative Stanley Young said no details had been shared with the agency and that he had “only seen the press release” issued by the EPA and was not yet privy to any details of the federal plan.

Indeed, aside from listing the specific grievances with the January 2017 evaluation, the decision offers few particulars, including any future emissions goals, only stating that they will be “revised as appropriate.”

Less ambiguity exists in CARB’s plan, with the organization swiftly and subsequently announcing it would continue upholding the Obama-era standards regardless of any new federal input—an act of rebellion quickly endorsed by state officials.

“These standards have been essential to the reduction of dangerous emissions from our cars and trucks that threaten everyone’s right to breathe clean air,” Senator Kamala Harris said in a statement responding to the EPA. “This administration’s decision to place another target on California’s back will be met with a fight.” And the Golden State won’t be alone in its corner.

The Less-Dirty Dozen

At least 12 states have signed on to follow California’s lead in the years since it’s received official permission to write its own emissions rules, including New Jersey, Connecticut, Washington State, Vermont, New York, Maine, Rhode Island, Massachusetts, Oregon, Pennsylvania, Maryland, Delaware, and the District of Colombia.

“We’ve had the California CARB program in place for a while,” said New Jersey Department of Environmental Protection representative, Lawrence Hajna. “I’ve not heard that we have any intent on changing it for any reason; our position has always been that it’s important for us to maintain the standard for overall air quality.”

All told, the CARB allies play a major role in maintaining that quality, wielding both the might of the market and the force of regulatory authority, with the states collectively housing nearly one-third of the country’s automobile purchases.

The strength in numbers only magnifies CARB’s power in the face of any federal legal threat and could also serve to weaken the intended outcome of the revision. Even as some car manufacturers have expressed their “appreciation” of the change, in its wake, the companies could find themselves serving two different American markets, with any hope of streamlining production erring on the side of the higher standards, lest automakers miss out on a sizable portion of car buyers.

While the situation makes for a massive legal showdown, it also works as a particularly good bargaining chip in negotiations that could stymie the need for courtroom drama.

Agreeing to Disagree?

Twelve states follow California's lead on vehicle emissions standards.

In fact, according to a New York Times report, that’s exactly what the warring parties are now discussing.

The talks could not only serve to keep things copasetic among the country and nearly one-third of its states, but also help avoid messy legal battles or the Congressional input that would be needed to officially write California out of the Clean Air Act. (Taking the issue to court could bar the state from enacting certain regulations but would likely leave most of CARB’s authority intact.)

Several potential compromises have purportedly been floated already, including one that would keep the original fuel economy standards through 2025 and allow California to create stricter rules up to 2030, with manufacturers permitted to exploit “more generous loopholes” in order to get there, according to the report.

Still, sources were mixed on how well the talks were going and whether either side was amenable to true change. Regardless of the outcome, however, some form of change is coming—and it will be unprecedented.

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