It’s been many years since we’ve convened a waiver hearing in the state of California. This speaks to the importance we attach to this request. We also recognize the participation of other states. This is certainly a very serious undertaking.

—Chris Grundler, Deputy Director EPA Office of Transportation and Air Quality, and presiding officer at the hearing

The California regulation. In 2002, the California Assembly passed AB1493, which called for a reduction in combined greenhouse gas emissions (CO₂, CH₄, N₂O and HFCs) from all vehicular sources (tailpipe, air conditioner) starting in model year 2009.

AB1493 maintains the two categories of light-duty vehicles used in California’s Low Emission Vehicle (LEV) II regulations: PC/LDT1 for passenger cars, and small trucks and SUVs; and LDT2/MDV for large trucks and SUVs. Work trucks are explicitly exempt from the GHG requirement.

AB1493 allows credit trading between the two categories and between manufacturers. It also offers an optional compliance mechanism for alternatively-fueled vehicles, and imposes less stringent requirements for small and intermediate volume manufacturers.

Following the passage of the bill, the issue was turned over to the California Air Resources Board (ARB) to determine the reduction targets, based on the ARB’s analysis of available and near-term technology and cost. After evaluating the options, in 2004 the ARB established limits that will result in approximately a 22% reduction in GHG emissions from new vehicles by 2012, and approximately a 30% reduction by 2016.

The regulatory background. In 1943, Los Angeles experienced its first major smog event. In 1945, the Los Angeles City Health Department established the Bureau of Smoke Control. In 1947, California Governor Earl Warren authorized the creation of air pollution control districts in every county. The Los Angeles County Air Pollution Control District (APCD) became the first of its kind in the state—and in the US.

In 1952, Arie Haagen-Smit, a professor of biochemistry at CalTech, discovered the nature and causes of photochemical smog.

In 1955, the Federal Air Pollution Control Act was passed to support a better understanding of the causes and effects of air pollution. The Los Angeles County Motor Vehicle Control Lab and the State Bureau of Air Sanitation were established. Legislation in 1959 enabled California to develop ambient air standards and controls for motor vehicles. The first ambient air standards were established based on observations of health.

In 1960, the California Motor Vehicle Pollution Control Board was established to test and certify motor vehicle emission control devices, while the Federal Motor Vehicle Act of 1960 provided research to address pollution from motor vehicles.

In 1961, the California Motor Vehicle Pollution Control Board mandated the first automotive emission control technology requirements in California and the nation. The first Federal Clean Air Act was passed in 1963. In 1967, California Governor Ronald Reagan (later US President) created the California Air Resources Board by combining the California Motor Vehicle Pollution Control Board and the Bureau of Air Sanitation and Lab. Professor Haagen-Smit became the first ARB Chairman and the first California Ambient Air Quality Standards were published in 1969.

In 1970, US President Richard Nixon signed a new Federal Clean Air Act (CAA)—which included deadlines for meeting air quality goals—and established by executive order the US Environmental Protection Agency (EPA) to implement the CAA. The CAA was subsequently amended in 1975, 1977, and 1990.

The Federal Clean Air Act reserves the control of emissions from motor vehicles for the federal government—with the exception of California, due to its early activity and special conditions (high density of motor vehicles, topography conducive to pollution formation in heavily populated basins—e.g., Los Angeles and the San Joaquin Valley), and any states that opt for the California regulations. In other words, there are two choices in the US: the federal requirements, and the California requirements.

For California to implement a modification such as that represented by the new CO₂ regulation, it must, by the language of the CAA, request a waiver (Sec. 209 (b)1).  This is the waiver process for which the EPA is now holding hearings. (Over the years, the state has received more than 40 of these from the EPA.) California had originally requested the AB1493 waiver in December 2005.

For the waiver to be granted, the state standard must, according to the CAA, be “at least as protective” of public health and welfare as the applicable Federal standard. This is one of the points that the auto industry, through AAM, is trying to use as an argument for denying the waiver.

The current arguments. As expressed by Catherine Witherspoon, Executive Officer of the California ARB in the hearing yesterday, California’s position is that there are only three issues before the EPA:

• Meeting the “protectiveness” standard;

• California conditions which justify the establishment of state standards;

• Consistency with another section of the CAA—202(a)—regarding the establishment of regulations.

The state contends that the burden is on the opponents, and that the EPA should defer to California’s judgements, based on the state’s history and continued special conditions.

Witherspoon’s testimony yesterday was partially directed at rebutting assertions or challenges raised by the auto industry during the first hearing in Washington. These included contentions that California had been arbitrary and capricious in determining that its standards are at least as protective as applicable federal standards.

To the contention that California should have compared its standards to non-EPA standards—e.g., the fuel economy standards—the state responded that the CAA requires comparison to EPA standards only, and that as yet there are no EPA GHG standards.

Much of the pro-waiver testimony focused on the conditions in California compelling the adoption of the standard, and on the damage that will be caused to the state by the affects of climate change in terms of diminished snow pack for water, rising sea levels, increases in severe wildfires, and worsening smog due to higher temperatures.

California is arguing that it is not required to demonstrate a specific temperature impact (i.e., a reduction in temperatures) based on the implementation of the AB1493 standards. The state cites a 1971 decision by then EPA Administrator Train:

The issue of whether a proposed California requirement is likely to result in only marginal improvement in air quality not commensurate with its cost or is otherwise an arguably unwise exercise of regulatory power is not legally pertinent...

—EPA Administrator Train, 36 Fed. Reg. 17158 (31 August 1971)

California’s stance is that all greenhouse gas emission reductions matter, and that AB1493 is part of a wedge-based strategy (Pacala and Socolow) toward stabilization.

The auto industry, through Steven Douglas of the AAM, argued that the waiver should be denied because:

• California failed to demonstrate that its standards are as protective of human health as are the federal standards (the fuel economy standards).

• Imposition of the regulation would worsen public health. AAM argues that the higher cost of the AB1493-compliant vehicles would push consumers into hanging on to older cars for longer (the jalopy effect) and that the higher fuel economy vehicles resulting from AB 1493 would result in the rebound effect of increasing vehicle miles travelled, thereby worsening the overall pollution situation. (EPA requested that AAM provided the assumptions from which it derived these scenarios.)

• Imposition of the regulation would not make any kind of measurable difference, but would come at great cost.

Next steps. The EPA is accepting written comments on the waiver request through 15 June 2007. (Comments can be submitted and/or seen online at www.regulations.gov, Docket ID No. EPA-HQ-OAR-2006-0173). The agency will then decide on the waiver.

I want to thank all of the political leaders in the Western US and California in carrying the wider appeal. This should be a routine procedure, but we suspect that it may not be...If the waiver is turned down, we have the lawsuit all ready to go.

—Dr. Robert Sawyer, ARB Chairman

Resources:

• Federal Clean Air Act

• Clean Air -- California’s Successes and Future Challenges (ARB)