Visible air pollution, known colloquially as “smog,” is responsible for clouding the horizons of cities all over the world. Smog forms when nitrous oxides react with sunlight, creating airborne particles which contribute to global warming and harm the health of humans, animals, and plant life. Car exhaust is one of the biggest contributors of nitrous oxide, and specific geographic and climate patterns can exacerbate the effects of the resulting smog. With approximately 14.5 million registered vehicles in the state and a climate perfect for harboring air pollution, most Californians have seen the telltale hazy skyline at some point in their life. However, thanks to California’s proactive measures, most people would be shocked to learn that the smog over Los Angeles was once so thick that it was mistaken for a chemical attack. The state has truly been a pioneer in air quality control, ensuring its citizens clean air by consistently and vigorously promoting and enforcing efforts towards reducing air pollution even before it was a federally recognized issue.

One prominent reason for California’s success can be attributed to the state’s unique ability to set emissions standards stricter than those federally mandated. Although other states may choose whether to opt in to California’s standards, California is the only state in the nation which may apply for a waiver of federal preemption to create their own original emissions standards. Two such standards are integral to California’s commitment to reducing air pollutants: the Greenhouse Gas (GHG) program, which aims to reduce GHG emissions to at least 40% below the 1990 level of emissions by 2030, and the Zero-Emission Vehicle (ZEV) program, which requires manufacturers to offer for sale a certain amount of clean vehicles (e.g. full battery electric, hydrogen fuel cell, and plug-in hybrid electric vehicles) based on the automakers overall gasoline and diesel sales within the state.

When the Trump administration announced its intention to revoke California’s waiver for these programs in 2018, citizens were understandably concerned. Gavin Newsom, California’s governor, stated that such actions “could have devastating consequences for our kids’ health and the air we breathe.” Newsom stated further that California “will fight this latest attempt and defend our clean car standards.” One year later President Trump announced via Twitter that he was following through and permanently revoking California’s GHG and ZEV programs. In response, Xavier Becerra, California’s Attorney General, immediately filed a lawsuit challenging the action.

President Trump’s revocation of two of California’s key air pollution control programs is only the first step in his plan to implement the Safer, Affordable, Fuel-Efficient (SAFE) Vehicles Rule. This rule will lower existing federal Corporate Average Fuel Economy (CAFE) standards (which regulate how far vehicles must travel on one gallon of fuel) and tailpipe carbon dioxide emissions standards (which regulate the amount of pollutants emitted by automobiles). By lowering these standards, the SAFE Vehicles rule will allow automakers to produce and sell less environmentally friendly vehicles for Model Years 2021 through 2026. As of March 2020, no final set of federal standards have been announced. However, the latest proposed Model Year standards would require automakers to increase average fleetwide fuel efficiency by only 1.5 percent per year. In comparison, the current standards require almost a five percent annual increase of fleetwide fuel efficiency- small percentages which have significant impacts.

California’s Federal Clean Air Act Exemption

The Federal Clean Air Act (CAA) was enacted in 1963 to combat poor air quality practices in the nation and unify emissions-control standards. Unifying the nation under one set of standards was an important goal; as state’s became more aware of the link between motor vehicles and air pollution, it would become increasingly burdensome for automakers to comply with each state’s individual emissions standards. Through its explicit preemption provision, the Act denied states the ability to implement or enforce separate emissions standards from those set by the federal government. However, due to California’s lengthy history battling air pollution and their unique geographic and climate conditions (which make the State particularly susceptible to smog) Congress created an exclusive exemption for California in 1967 through its waiver application. The waiver application allows the state to apply for a waiver of federal preemption for programs that will be, in the aggregate, at least as protective of public health and welfare as applicable federal standards. Although the statute doesn’t explicitly name California as the only beneficiary to this exemption, the language of the statute only allows a state which had adopted emissions standards for new motor vehicles or new motor vehicle engines prior to March 30, 1966 to apply for a waiver. Because California was the only state to have adopted such standards prior to that date, they are the only state which qualifies for the exemption to create their own differing standards.

Despite the Congressionally recognized and well established need for California to enforce stricter emissions standards than those set nationwide, the Trump administration holds firm that the SAFE Vehicles Rule is necessary for both safety and economic purposes.

President Trump’s Roll-Back of Clean Air Policies

The Trump administration puts forward several arguments to support its revocation of California’s GHG and ZEV program waiver. First, the Energy Policy and Conservation Act (EPCA) of 1975 explicitly preempts states from adopting or enforcing a law or regulation “related to” fuel economy standards or average fuel economy standards. The Trump administration argues that California’s GHG program and ZEV mandate run afoul of this preemption provision because they set limits on and measure carbon emissions, which is the same method by which fuel economy standards are set and enforced by the National Highway Traffic and Safety Administration (NHTSA).

Second, the Trump administration argues that California does not need its GHG and ZEV standards to meet the “compelling and extraordinary conditions” requirement of the Clean Air Act. It argues that the GHG and ZEV standards address needs that are not particular or unique to California, are not caused by emissions or other factors particular or unique to California, and will not provide any remedy particular or unique to California.

Third, the Trump administration argues that revoking California’s GHG and ZEV standards will improve traffic safety (although an internal email from senior EPA staffers suggests otherwise) and reduce consumer and manufacturing costs. To support this claim, the EPA and U.S. Department of Transportation (DOT) released a study which outlines various potential impacts of the proposed 2021-2026 CAFE standards. The study suggests that lowering emissions standards will save up to one thousand lives annually and, because it’s more expensive to drive less fuel efficient cars, lower fuel efficiency standards will reduce fatal crashes simply because people will be driving fewer miles overall (an idea referred to as “the rebound effect”).

The administration further argues that weakening emissions standards would improve both highway safety and average ownership costs because forcing carmakers to meet tougher standards makes cars more expensive, which leaves consumers more likely to opt out of upgrading their vehicle and continue driving their older, less safe vehicle for longer. The study proposed that average vehicle ownership costs for new vehicles will be reduced by almost 2.5 thousand dollars, and could save manufacturers 252 billion dollars in regulatory costs through model year 2029. They conclude that, overall, there will be no noticeable impact to net emissions of smog-forming or other toxic air pollutants.

California’s Rebuttal

In response to the President Trump’s announcement, California and 22 other states, the District of Columbia, the County of San Francisco, and the cities of Los Angeles and New York have filed suit against Elaine Chao in her official capacity as Secretary of the United States Department of Transportation. The lawsuit requests that the One National Program rule (the first part of the SAFE Vehicles Rule revoking California’s GHG and ZEV program waiver) be declared unlawful and set aside because it exceeds NHTSA authority, contravenes Congressional intent, is arbitrary and capricious, and because NHTSA has failed to conduct the analysis required under the National Environmental Policy Act.

California directly argues against the assertion that the EPCA preempts California’s GHG and ZEV programs. It points out that by the time the EPCA preempted any state laws “relating to” fuel economy standards or average fuel economy standards, the EPA had already issued California a waiver to regulate certain emissions for model years 1977 beyond. Rather than preempt California’s standards, Congress instead directed NHTSA to take California’s standards into account when setting fuel economy standards.

The decision by Congress to take California’s standards into account when setting fuel economy standards figured prominently in two District Court decisions in California and Vermont: Central Valley Chrysler-Jeep, Inc. v. Goldstein (2008) and Green Mountain Chrysler Plymouth Dodge v. Crombie (2007). Both decisions rejected the argument that the EPCA preempts California’s GHG standards and held, in relevant part, that had Congress intended EPCA’s preemption provision to apply to emissions standards for which California has obtained a waiver under the CAA, Congress would not have directed NHTSA to consider such emissions standards. Additionally, the court held in Green Mountain that state law is “not preempted where the required increase in fuel economy is incidental to the state law’s purpose of assuring protection of public health and welfare under the Clean Air Act,” and that “Congress intended California emissions standards for which EPA granted a waiver . . . to constitute ‘other motor vehicle standards of the Government,’ under Section 502 of EPCA.” This ruling, the Court argued, is “entirely consistent with the language of the statutes, the House and Senate reports that accompanied the legislation, and NHTSA’s practice of taking California standards into consideration when setting CAFE standards.” The Trump administration argues that both of these cases incorrectly interpreted EPCA and the relationship between standards adopted under EPCA and the CAA.

California also argues that the U.S. Supreme Court decision Massachusetts v. EPA directly conflicts with the Trump administration’s argument that California’s GHG program is preempted. In that landmark decision, the Court held that greenhouse gas emissions standards under the Clean Air Act do not interfere with NHTSA’s ability to set fuel economy standards under EPCA- it follows that California’s GHG and ZEV program, granted to it through the Clean Air Act’s waiver provision, also do not interfere with NHTSA’s ability to set fuel economy standards.

Waiver of Federal Preemption’s History of Success

The waiver of federal preemption has struck a largely successful balance between California’s need to create stricter emissions standards and the federal government’s aim to relieve automaker’s from burdensome and differing state regulations. Section 177 of the CAA gives all states the freedom to implement Californian or Federal standards, 13 of which choose to follow California’s standards.

After California applies for a waiver, the CAA instructs the Administrator of the EPA to grant the request if California has determined that their standards will be, in the aggregate, at least as protective of public health and welfare as applicable Federal standards.Only if the Administrator finds California’s determination arbitrary and capricious, or unnecessary to meet compelling and extraordinary conditions, may he or she reject California’s waiver request.

It is very rare for the Administrator to deny California’s waiver requests because the “compelling and extraordinary conditions” needed to procure a waiver refer specifically to California’s topographic and climate conditions, as well as its large vehicle population, rather than its measurable level of pollution. For example, if California’s air pollution levels were effectively reduced to zero, yet the state still had a large vehicle population and climate conditions conducive to trapping air pollution, a waiver to continue creating its own emissions standards should still be granted. The special deference given to California based on climate conditions and other factors likely to create serious air pollution problems was considered from very early in the Act’s inception, and was continuously re-emphasized both by the legislature and the judiciary as amendments to the Act were made throughout the years.

For these reasons, waiver requests are virtually never denied, either in part or entirely, and they never expire once granted. Instead, a waiver is indefinite until it is superseded by new waivers which apply for more stringent standards. That’s because, while statutory procedures exist for approving or denying waiver requests at the outset, no statutory authority exists with which to revoke a waiver that has already been granted. One of the most compelling arguments against the Trump administration’s revocation of California’s GHG and ZEV waiver is that there simply exists no statutory procedure which validates his actions. Instead, the Trump administration rests its justifications for revoking the waiver on the authorities cited above.

One reason no statutory procedures exist for revoking previously granted waivers might be because once waivers are granted, they are relied upon by governments and various industries which use those standards to create clean vehicles and develop plans to reduce pollution. California’s ZEV program was first approved in 1990 while its GHG program was implemented in 2009- revoking these programs rolls back over three decades of progress for California and any state which has adopted these programs.

No Final Verdict Means Uncertainty for Automakers

The GHG and ZEV revocation has plunged the auto-making industry into uncertainty, as they rely on these standards well in advance of developing their fleets. Rifts have been formed between companies who either recognize California’s authority to set its own target programs or support the Trump Administration’s proposals. After President Trump’s 2018 proposal to freeze fuel economy standards at 2020 levels, automakers BMW, Honda, Ford, and Volkswagen came to an independent agreement with California to increase fuel economy standards by 3.7 percent year over year between Model Year 2020 and Model Year 2026. This agreement puts these companies on track to achieve the current nationwide fuel economy goals (i.e. on track to achieve the 5% annual increase in fuel efficiency, which will be superseded by the new standard when it is announced) just one year later than the original mandate put into place by the Obama administration. In response to the deal, an antitrust investigation was launched by the U.S. Department of Justice against these automakers, increasing the tension between the automakers who are in favor of stricter emissions standards and the Trump administration.

Conclusion

For now, it remains uncertain whether or not the revocation of California’s GHG and ZEV waiver will stand. California’s lawsuit challenging the action could take years to resolve; additionally, a Presidential election looms close on the horizon, leaving open the possibility that a new administration could withdraw the revocation entirely.

While the Trump administration may have many lofty goals as it relates to rolling back emissions policies for the entire nation, California’s ability to set its own standards is based on solid legal ground. Explicit statutory authority, lengthy Congressional history in favor of the waiver provision, positive judicial interpretations, and a successful history in reducing air pollution in the state all bolster California’s chances that their programs will remain intact. Not to be forgotten is the fact that no statutory procedures exist within the CAA or otherwise for revoking waivers once they have been granted. Regardless, even if there is legally sound basis for revoking California’s waiver, many argue that it would be extremely bad policy to do so.

As this is a case of first impression, the only thing left to do for most, it seems, is wait and see. History is being made, and as California’s Attorney General Xavier Becerra stated, “[California’s Clean Car Standards] not only work, many other states around the country have chosen to adopt them. The Trump Administration, on the other hand, has chosen to side with polluters. We believe we’re on the right side of history.”