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Blocking State Leadership on Global Warming

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Last week, Environmental Protection Agency Administrator Stephen Johnson published the official explanation of his decision to deny a waiver of preemption for California’s program to reduce greenhouse gas emissions from vehicles. This action will undoubtedly set off another round of litigation on top of pending cases challenging the waiver denial—challenges that legal experts believe are likely to prevail.

Johnson’s explanation also comes against the backdrop of congressional hearings and investigations probing how and why Johnson’s decision was made. To congressional critics and unhappy state governors and legislatures, the EPA denial is yet the latest and perhaps most egregious example of backsliding by the Bush administration, which already has a notorious history of foot dragging on global warming.

What’s at stake in the controversy over the waiver denial and why has Johnson’s decision been so bitterly attacked? The concerns raised go to our ability to make progress on global warming when the national government both refuses to act and is blocking states from filling the void. And they also go to the integrity of EPA’s decision-making process and the willingness of its senior leaders to base their actions on well-established policies and precedents as opposed to a political agenda.

We need to start with the California emission standards themselves. They are a cornerstone of California’s ambitious effort to reduce overall greenhouse gas emissions by 20 percent by 2020 —an example of leadership on global warming that has been conspicuously lacking in Washington.

California officials estimate that the standards will reduce emissions of carbon dioxide (CO2, the most prevalent greenhouse gas) by approximately 30 million metric tons in 2020 and over 50 million metric tons in 2030. This equates to an overall 18 percent reduction in CO2 emissions from passenger cars in 2020 and a 27 percent reduction in 2030. The standards are to take effect in the 2009 model year.

EPA’s waiver denial will stop California’s vehicle emission program dead in its tracks. A total of 18 states, representing 45 percent of the nation’s auto market, have adopted or pledged to adopt the California emission standards. Their efforts, too, will be stymied by EPA’s failure to grant the waiver. Instead of implementing the standards, California will spend months fighting EPA’s decision in court. The ultimate outcome may well be to reverse the waiver denial—all three presidential candidates have said they would grant the waiver. But the months of litigation and uncertainty will only delay progress on reducing vehicle CO2 emissions, which is critical in order for California and ultimately the nation to shrink the carbon footprint of the transportation sector.

Adopted in 2004, the California standards have weathered two legal challenges from the auto industry. They were bolstered by the Supreme Court’s 2007 decision in Massachusetts v. EPA that motor vehicle emissions of CO2 are subject to the Clean Air Act and should be reduced unless EPA is unable to conclude that they endanger public health and welfare. The one remaining hurdle before implementing California’s program was obtaining a waiver of preemption from EPA under the Clean Air Act. It was initially expected that the Supreme Court decision would ease the path for the waiver.

Despite the strong case for the waiver presented by California Governor Arnold Schwarzenegger, Johnson sat on the request for two years before denying it on the basis that California’s regulations were not needed to meet "compelling and extraordinary conditions." This is the first time in 38 years that EPA has outright denied a California waiver request.

Johnson’s official explanation of the decision provides plenty of fodder for California and other supporters of the waiver. But equally troubling is the story emerging from documents EPA reluctantly shared with congressional committees investigating the waiver denial. While the facts are still coming to light, it appears that the EPA professional staff forcefully recommended granting the waiver and provided Johnson with extensive briefing materials demonstrating that the waiver was supported by the law, long-standing agency precedent, and court decisions. The staff also warned that the courts would likely overturn a waiver denial. In an unusual step, former George H.W. Bush EPA Administrator William Reilly expressed personal concern to Johnson about denying the waiver.

Johnson claimed that the waiver denial was "his and his alone," but he could not have been unaware of the policy preferences of White House officials. The Bush administration has both resisted federal action to reduce vehicle greenhouse gas emissions, and sought to prevent states from filling the void created by federal inaction. The waiver denial advances that agenda. That Johnson may have consulted with the White House is not surprising but that he would allow a political agenda to trump long-standing and strongly held positions of the EPA professional staff is deeply disappointing in light of his nearly three decades as an EPA career scientist.

The EPA administrator is of course accountable to the president, but his policy discretion must be exercised within the confines of established law and precedent. Administrator Johnson was not writing on a clean slate when he blocked California’s waiver request. The Clean Air Act’s waiver provisions have deep historical roots and EPA has an extensive track-record of granting waivers to California under both Democratic and Republican administrations.

Indeed, legislative history, court decisions and agency practice over 38 years all confirm that California emission standards should receive deference and should be blocked by EPA only in the most extreme cases.

Because of its severe air pollution problems, California began limiting tailpipe emissions of smog-forming pollutants even before the federal Clean Air Act was passed in 1970. Preservation of California’s pioneering role in controlling vehicle pollution was a congressional priority when it authorized EPA to develop a national emission control program for cars and trucks. The legislative history of the original Act recognizes that the nation would benefit from California’s expertise as a "laboratory" for innovative pollution controls, and that California’s "compelling and extraordinary” pollution challenges would justify safeguards more stringent than those imposed at the national level. 1

To protect the industry from a multitude of state requirements, Congress allowed only California to maintain separate emission standards, permitting other states to adopt California’s standards in totality, but not to develop their own. Congress also required California to obtain waivers of preemption under Section 209 of the Act, but gave EPA limited authority to second-guess its judgments about measures necessary to protect Californians.

As Congress emphasized when it amended the Act in 1977, "the underlying intent" of Section 209 is "to afford California the broadest possible discretion in selecting the best means to protect the health of its citizens and the public welfare."2

Over the years, both the courts and EPA itself have repeatedly recognized that California enjoys "the broadest possible discretion in setting regulations that it finds protective of the public health and welfare" and that "Congress intended that the standards of EPA review of the state decision to be a narrow one."3 Indeed, the DC Circuit Court of Appeals has held that California’s regulations, "when presented to the Administrator are presumed to satisfy the waiver requirements and that the burden of proving otherwise is on whoever attacks them."4 Since the Act took effect, EPA has acted on 95 waiver petitions, partially denying only five. The last partial waiver denial was in 1975.

How did Johnson justify departing from nearly four decades of favorable EPA action on waiver requests? The law allows EPA to reject a waiver request if it finds that California does not need its own standards "to meet compelling and extraordinary conditions." Johnson concluded that the risk of global warming to California was insufficient to demonstrate "compelling and extraordinary conditions" because global warming is a national and even international problem that is not unique to California and does not have unusual impacts on the state.

Johnson’s approach flies in the face of EPA’s long-standing policy of examining not whether specific pollutants pose a threat to California residents but instead whether the California motor vehicle program as a whole is needed to meet "compelling and extraordinary conditions."5 Since EPA has repeatedly found that California meets that general test, Johnson should have simply granted the waiver and not conducted an analysis of the implications of CO2 emissions for California. But even applying Johnson’s flawed test, his conclusions simply don’t stand up to scrutiny.

To begin with, Johnson doesn’t (and couldn’t) deny that global warming is well-documented scientifically, poses a serious threat to health and welfare, and is predominantly caused by the combustion of fossil fuels, which emits CO2, a significant portion of which comes from cars and trucks. Nor is there any doubt that California, the nation’s most populous state and one of the world’s largest economies, is a significant contributor to both U.S. and global CO2 emissions from vehicles. Finally, the California waiver request impressively demonstrated the state’s unique vulnerability to global warming. It explained that:

  • Higher temperatures associated with global warming would increase ozone smog levels in California and degrade air quality
  • Heat waves, droughts and increased wildfires would harm California citizens
  • Declining snow packs and early snow melts would reduce water quality and quantity
  • Sea-level rise and salt water intrusions would put at risk the millions of California citizens living on or near the Pacific coast
  • Higher temperatures and reduced water supplies would adversely affect California’s large and important agriculture sector by reducing crop yields, increasing pests and creating competition for scarce water supplies.

Johnson did not deny the magnitude of these consequences, but found that they were "not sufficiently different from conditions in the nation as a whole to justify separate state standards." Thus, Johnson substituted his own judgment for California’s on whether the risks to its citizens from climate change were sufficiently "compelling and extraordinary" to justify state action to reduce emissions.

Under established case law and precedent, this wasn’t Johnson’s judgment to make. The waiver procedure was created in recognition of the need to defer to California’s historical leadership role in limiting emissions and its ability to set cutting-edge standards that the rest of the nation might later follow. As EPA itself said in a 1975 waiver determination, “Congress meant to ensure by the language it adopted that the Federal government would not second-guess the wisdom of state policy. . . . Sponsors of the language eventually adopted referred repeatedly to their intent to make sure that no “Federal bureaucrat” would be able to tell the people of California what auto emission standards were good for them, as long as they were stricter than Federal standards.”6 Yet second-guessing California is exactly what Johnson did, blocking it from exercising the very environmental leadership that Congress wanted to encourage.

The EPA waiver denial is but one move in a larger chess game over the timing and stringency of regulations accelerating the introduction of new vehicle technologies that are more efficient, burn less fuel and emit lower amounts of CO2. This game is taking place in multiple venues, including Congress, the courts and EPA. Whether or not Johnson was directed by the White House to deny the petition, he surely knew that the Bush administration has resisted at every turn the use of existing authority — under the Clean Air Act or otherwise — to control vehicle CO2 emissions.

Indeed, while preventing California from implementing its vehicle standards, Johnson was simultaneously backpedaling on EPA’s previously announced commitment to develop federal CO2 emission standards for vehicles in the aftermath of the Supreme Court’s Massachusetts v EPA decision, which held that CO2 is a "pollutant" subject to the Clean Air Act and that EPA was obligated to regulate vehicle emissions unless it concluded that climate change did not "endanger" the public health and welfare. Originally, EPA planned to meet its obligations under the Supreme Court decision by making an “endangerment finding” and proposing CO2 emission standards for vehicles by the end of 2007. But now there is serious doubt about when, if ever, EPA will comply with the Court’s decision.

The administration’s rationale for delaying these standards—that Congress just increased the so called corporate average fuel economy, or CAFE standards, making CO2 controls for vehicles unnecessary—smacks of the same legal sleight-of-hand as the waiver denial. While the new energy law will strengthen fuel efficiency standards implemented by the Department of Transportation, it does not address EPA’s authority over CO2 emissions (a very different matter from fuel economy) or diminish its obligations under the Supreme Court decision. Yet again, a political agenda and not law and precedent is driving how the agency applies Clean Air Act requirements.

The role of state programs under a comprehensive climate change framework may be a legitimate subject for debate by Congress as it writes legislation. But Johnson’s job wasn’t to make policy judgments that belong to Congress. It was to apply the law. He failed in that responsibility. Although his decision will probably be undone, it will regrettably divert precious time and energy from the urgent task of slowing global warming.

 

Endnotes

1. S. Rep. No. 403, 95th Con. 1sr Sess. 33 (1967)

2. H.R. Rep. No. 294, 95th Cong., 1st Sess. 301-02 (1977)

3. 40 Fed, Reg. 23103 (May 28, 1975).

4. Motor & Equipment Mfrs. Ass’n v. Nichols, 627 F.2s 1095 (DC Cir. 1979).

5. 49 Fed.Reg. 18887 (May 3, 1984).

6. 40 Fed, Reg. 23103 (May 28, 1975).


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