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Automakers Challenge CA CO2 Regulation in Court

As expected, the Alliance of Automobile Manufacturers has joined a group of automobile dealers in California’s Central Valley to file suit against California’s new regulation of CO2 emissions. Automakers and dealers filed their challenge in the U.S. District Court in Fresno, California.

The core of their argument is that the new law regulates fuel economy, not CO2 emissions. It goes like this:

  1. CO2 emissions and fuel economy are synonymous.

  2. Federal law grants sole authority to the National Highway Traffic Safety Administration (NHTSA) to set a uniform, national fuel economy standard.

  3. California does not have the right to regulate fuel economy—and so it does not have the right to regulate CO2 emissions.

  4. Regulators need to follow the law.

Hmm, I wonder if they will try to sue Canada. (Earlier post.)

What a waste of money and human energy. Much better to unleash the engineers and some creative product marketers to deliver the solutions that could meet the standards than to resort to hackneyed legal tactics.

The Union of Concerned Scientists has a response to the lawsuit here. UCS also happened today to release its biennial ranking of automakers’s environmental performance. The landing page for the report is here. UCS named Honda the “Greenest Automaker.”


Dave Manelski

It seems like a larger issue here is whether or not CO2 is considered pollution. After all, the court can't, in good conscience, prohibit California from regulating its own pollution. It can prohibit them from setting their own fuel economy standards, but not regulating their own pollution.

Should California win this case, I think it would go a long way in changing the public perception, or at least the court's perception, of CO2 as a pollutant.


I agree with that. As much as I dislike the prospect of all the time that will be involved with this, the arguments and the outcome will be important. But California had better win. :-)

Alex Rau

This is a very complicated dance between the automakers and the state of California. Its true that Congress has the exclusive right to regulate fuel economy, but if you look at the rules, drafted by CARB, the state agency for air resource management, there is not a single mention of fuel economy -- the rules have been entirely drafted in terms of reducing CO2 emissions.

Now, the predominant source of CO2 emissions from tailpipes is directly from combustion of the fuel [meaning that reducing CO2 emissions requires an increase in fuel economy], BUT the link is not exactly one-to-one. For example, improvements to air conditioning systems can reduce CO2 emissions independent of changes to the fuel economy of the car. Furthermore, the rules allow for a limited amount of "trading" of emissions reductions between automakers, thus further delinking CO2 and fuel economy.

So this part of the lawsuit will boil down to a legal interpretation of what exactly the laws state and whether the link between CO2 and fuel economy is "overwhelming" and thus the new rules do contradict the federal government's exclusive authority over fuel economy standards.

It is not at all clear at the moment how the courts will rule -- strong arguments can be made on both sides. It will surely be a lengthy court process dragging over many months. However, the real question is can the automakers afford to lose the lawsuit? If they ultimately lose [which is certainly possible] after another year or more of inaction, the cost of compliance will be that much more.

Clearly the automakers are convinced that they will prevail in court. However, I wouldn't be so sure -- the other main aspect of the lawsuit is, as Dave mentioned, over whether California has the right to regulate CO2 at all under the Clean Air Act, since the EPA under the Bush Administration has repeatedly refused to classify CO2 as a pollutant. This will depend on the results of another lawsuit, initiated by the attorneys general of several states, that aims to force the EPA to declare CO2 a pollutant. The outcome of that lawsuit will be a very political decision that will clearly have a big impact on the auto standards lawsuit as well. So as soon as the political dynamic gets involved, I think it's anybody's guess as to what will happen in the end.

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