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States vs. Federal Government: California's Clean Air Act preemption waiver

Updated: Oct 4, 2022

“The Trump Administration is revoking California’s Federal Waiver on emissions in order to produce far less expensive cars for the consumer, while at the same time making the cars substantially SAFER.”- Donald Trump

For the past few years, the state of California has tried to demonstrate how a state can take action against climate change without waiting for the federal government. The results have not been good. The federal government has relentlessly opposed California’s attempts to steer an independent course despite the state’s long tradition of going above and beyond federal emissions standards. To understand the nature of the standoff, it helps to look to California’s history.

The History of the Waiver

In 1967, California’s then-governor Ronald Reagan create the California Air Resources Board to set emissions standards for the state of California. California also led the nation in mandating that cars install catalytic converters and crankcases, both of which reduce exhaust and pollution that comes from cars. When the amendments to the Clean Air Act passed in 1970, California sought and received a waiver that allowed the state to enforce its own emissions standards that exceeded the national standards. After the Clean Air Act was again amended in 1990, other states were given the option to implement their own standards if they were stricter than the national ones. Since 1990, the EPA has granted waivers to more than a dozen states.

The End of the Waiver

"We embrace federalism and the role of the states, but federalism does not mean that one state can dictate standards for the nation." - EPA Director Andrew Wheeler

In 2019, California’s 50 year-old waiver was revoked by the Trump administration. The EPA director Andrew Wheeler justified this move by claiming that California was unjustly setting national policy by making its own arrangements with car companies, which had agreed to abide by California’s stricter standards in order to sell their cars in a state that would be the fifth-largest economy in the world if it were its own country. Wheeler also blamed California for failing to crack down on air pollution in its cities. While it is true that California has the worst air pollution in the country (something that can be expected given the many dense cities within the state, some of them surrounded by mountains), California has also done more than any other state to reduce its air pollution over the past sixty years. California’s attorney general Xavier Becera responded by suing the EPA, and as of June 2020 the case is pending. Becera has been joined in his suit by the attorneys general of nearly a dozen other states that have similar waivers.

Why California’s Standards Matter

In the lawsuit that Beccera and the other attorneys general filed, they listed in detail the importance of California’s strict environmental standards. According to California’s projections, the standards would reduce carbon emissions by 25.2 million metric tons over the next decade. To put that in perspective, that's equivalent to removing over 1.2 million cars from the roads each year for the next ten years. The standards would also encourage the sale of more than 2 million additional zero-emissions vehicles by 2025. If those standards were eliminated by the federal government, that would result in millions of metric tons of carbon dioxide unnecessarily emitted and millions of zero-emissions cars unsold.

The Department of Justice Fires Back

“This latest attack shows that the White House has its head in the sand when it comes to climate change and serves no purpose other than continued political retribution.” - Gavin Newsom

Not long after California announced that it was suing the EPA, the Department of Justice responded with its own lawsuit, this time targeting California’s cap-and-trade system that was linked with Quebec. Under that system, people in California and Quebec could purchase allowances to emit carbon. If a factory in California came in under their cap, they could trade the right to the remaining emissions to someone in Quebec. The Department of Justice argued that only the federal government could conduct an international agreement like this, and thus California would have to shut down the cap-and-trade program. In July of 2020, a federal court upheld California’s cap-and-trade program.

Federal retaliation has also come in the form of an antitrust investigation into the four automakers (Ford, Honda, Volkswagen, and BMW) that had agreed to abide by California’s stricter emissions standards. The Department of Justice argued in September of 2019 that the deal between the state and the automakers limited consumer choices. Although the investigation was eventually dropped in February of 2020, the Trump administration has not backed away from its threat to punish California in other ways, such as by cutting the state's share of federal highway funding.

Lessons Learned

California has long prided itself on its ability to exceed federal standards on emissions. The past few years have shown the lengths that the federal government is willing to go to bring states into line, even when large automakers are willing to work with those states on stricter emissions standards. This is a concerning development for people who had hoped that states could set their own course in the absence of a federal policy to address climate change. One can reasonably conclude that the private sector is the last remaining place where real solutions to climate change can be found.

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